Poor little rich kids?

Various organizations, led by the School Nutrition Association, were unhappy with my recent post that praised a provision in the new child nutrition law, which requires schools to raise the price they charge students for school lunch. A price increase, the SNA’s spokeswoman Diane Pratt-Heavner posted here, could result in a drop in meal participation: “No one knows how severe the decline in participation will be, and that’s a risky gamble to play with a program that is vital to the nutrition and well being of millions of school children.”

Change can be scary. But upon further reflection, I think the objections to the law are shortsighted. The provision will, over time, bring $2.6 billion to schools to spend on school meals. More important, it’s the right thing to do.

First, the bill doesn’t require schools to immediately raise their prices all at once. Rather, it provides them with a methodology that gradually increases prices with the specific intent of avoiding  price shock that would turn families away. Under the method provided in the bill, many schools may take as many as 25 years to align the prices they charge kids, who technically can afford to buy school lunch, with the amount of money the federal government pays for each meal for a low-income child.

Second, as the SNA notes, a Congressional Budget Office report did predict that increasing paid meal prices to match the federal reimbursement rate would result in a drop in participation in school meals (pdf). But read the fine print and you’ll see that it projects declines of less than $500,000 annually.  That’s $500,000 per year for a program that spends more than $10 billion annually and serves 31 million kids.  Given that the provision will raise $2.6 billion over ten years to improve schools meals, the risk of a very small number of kids leaving the programs seems about as good of a policy tradeoff as one is going to get.

And one more thing: Opponents of the provision assume that kids right at the margin have absolutely no discretionary income and that a price increase of as little as 5 cents, which is what the bill would do, would have major participation impacts. But other research shows that’s not the case. According to a recent article in Grist, researchers found that low-income kids buy so-called competitive foods – the cookies, french fries and other junky food sold outside the lunch line — at about the same rate as higher-income kids. (You can see the full report here.) If they lacked any disposable income, they would not purchase snacks that are not included in the school meal.

During a recession, it is true that a price increase could hurt some kids. But isn’t it more worrisome that our current system had low-income kids subisidizing the meals of well-off kids?  Consider this, there are some major school systems that charge as little as a $1.50 for paid meals for higher-income kids, even though they are getting well over $2 in reimbursement for free-meals.  That means that in areas like Northwest DC, which are extremely affluent, parents making hundreds of thousands of dollars a year are getting meals prices that are artificially low, even as the school system fails to invest that money in balanced meals for low-income kids in the really poor parts of the city.

Where’s the logic, or the justice, in that?

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  1. Posted December 15, 2010 at 1:48 PM | Permalink

    Jane, I haven’t spoken to the authors of the $2.6 billion estimate. Have you? I wonder how they arrived at the estimate, and whether it takes into account potential dropouts. A larger question would be, why would anyone pay more for the generally horrible food schools serve. And don’t say it’s going to get much better with new nutritional standards. They have nothing to do with food quality. The fact is, nobody knows–nor do they have any way of knowing–how many kids will simply stop buying school lunch if prices go up in favor of bringing lunch from home or eating out. And we aren’t talking about just “rich kids” here. The numbers include untold thousands who live at the margins, close to, but not quite, qualifying for reduced-price meals. As the SNA notes, included in the tally are hundreds of thousands of kids in rural and semi-rural areas who hardly fit the description of Volvo-driving families you would portray here.

    Once, again, the middle class is taking it on the chin while the government hands out welfare to millionaires. It’s hard to square.

  2. Posted December 15, 2010 at 2:09 PM | Permalink

    School meal prices, just like restaurant prices, differ greatly from one community to the next, and they should. When setting school meal prices, school boards have to take into account not only the cost of producing the meals in their communities (varying food prices, labor costs, etc), but also the local economic conditions and what families are able and willing to pay. They don’t have the option of setting one price for children from extremely affluent families and another price for those who come from families of four making ends meet on just over $40,793 a year (the threshold for reduced price meal eligibility).

    When prices increase, even gradually, many students start packing a lunch or taking their $2+ and buying off the super value meal at the nearby fast food joint. Even USDA has found that “All else equal, students who were not income-eligible for free or reduced-price meals were less likely to participate in the program when the full price of the meal was higher (pg 116 http://www.mathematica-mpr.com/publications/pdfs/SNDAvol2.pdf).

    We learned this lesson in the 1980s after Congress cut funding for school meals programs, forcing districts to raise prices. Janet Poppendieck cites (See p 72-73 of “Free for All”) that as a result of this legislation, “Nearly 2,700 schools dropped out of the program, and as lunch prices jumped in schools across the nation, participation by full price students declined from 15.3 million in 1979 to 11.2 million in 1983.”

    The Center for Budget and Policy Priorities also states that “In order to make sound decisions about meal pricing, school officials need more information. (They do not have opportunities to raise and lower prices to measure the resulting effects.) To remedy this information gap, USDA could publish and analyze existing meal price data for all districts. Examining what comparable districts are doing would help districts set prices above a federally required minimum while maintaining adequate participation.”

    We haven’t even seen the new nutrition standards that school meal programs will have to meet under the Healthy, Hunger-Free Kids Act, and we don’t know how these changes will affect participation (remember, even Jaime Oliver and Ann Cooper have struggled with declining participation when healthy changes were implemented in their cafeterias). Why are we proceeding with mandating price increases, regardless of local economies, when we don’t even have data to inform this decision?

    Thanks again Jane for bringing up this topic, because meal prices, and the impact they can have on the integrity of the school lunch and breakfast programs, are a major concern for school nutrition professionals.

    Diane Pratt-Heavner
    School Nutrition Association

  3. Posted December 15, 2010 at 6:36 PM | Permalink

    Hi Ed,
    Thanks for this and your second note. I’m sort of surprised that you are so dead-set against this provision. More money for school lunch is good for a program that is literally starved for funds. And I find it curious that people think that slow increases over time will push out so many kids. According to the USDA, only five percent of children who pay “full” price for their lunch come from families with incomes between 185 and 200 percent of the poverty level. In contrast, about 60 percent of these children come from families with incomes over 300 percent of the poverty line -about $66,000 for a family of four. That’s not hundreds of thousands of dollars, you’re right. But there’s an extra nickel in there to support an important federal program.

    In reference to your other points.
    –The CBO might not be clairvoyant. But neither is the School Nutrition Association. And school districts don’t universally oppose the provision. There are various school districts, such as the Arkansas SNA, that publicly support the provision.
    –And as for the raising the prices across the country, they will increase gradually over time so, until it reaches the federal reimbursement rate, it won’t necessarily be the same in Huntington and New York. And, if school boards really don’t want to raise prices, they are permitted, under the provision, to find other ways to match the federal money. They can get it from the state, fundraising — anything but a la carte sales. I know, none of that is easy either, but there are options.

  4. Posted December 15, 2010 at 6:36 PM | Permalink

    Thanks for the comments. Interesting points. But I think it’s misleading to say that the prices would have to be the same everywhere. There’s nothing in the law that requires New York City and Huntington, WV, to have the same meal prices. The bill simply says that schools can’t have lower meal prices for higher-income kids than they receive in reimbursements for low-income kids.

    Also, as for the conventional wisdom that good food costs more, sure it does. But what we’re seeing here, at least at this early early stage, is that the biggest costs are trained staff, new equipment — both one-time costs. The differences could be made up if the USDA were to upgrade the commodity program and offer more raw/fresh/unprocessed products to schools instead of the usual nuggets.

    More on that later as the reporting continues here in Huntington.

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    […] This post was mentioned on Twitter by Mark Bittman, Meredith Modzelewski, Tom Laskawy, jane_black, Kim Severson and others. Kim Severson said: RT @jane_black: Poor little rich kids? Opposition to paid-meal hike in the new school lunch bill is flawed. http://ow.ly/3pGQ2 […]

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  • About Me

    Jane BlackI am a Washington, D.C.-based food writer who covers food politics, trends and sustainability issues. My work appears in the Washington Post, (where I was a staff writer), the New York Times, Saveur, New York magazine and other publications. On this site, you will find my blog and links to my written work and my Washington Post columns.