Abbott facility, Abbott Nutrition, Abbott Nutrition near monopoly, and Children, breast pump, breast-feeding, contaminated formula, cost caps, falsification of records, HHS, higher infant formula pricing for non-WIC users, hygiene, infant deaths, infant formula, infant formula pricing, infant formula procurement, infant formula rebates, infant formula recall, infant formula state contracts, infants, Michigan, monopoly on state contracts, nanny state, OIG, powdered baby formula, price mark-up, product recall, quality control, Regulation, Special Supplemental Nutrition Program for Women, supply chain tracking, US Congresswoman DeLauro, US FDA, USDA, welfare, welfare cost burden transferred to paying customers, welfare monopoly, welfare state, whistleblower, wholesale costs, WIC
(Click to enlarge) “Figure A.2. Breastfeeding Initiation Rates for 7- to 11-Month-Old Infants, 2014-2020 https://www.fns.usda.gov/sites/default/files/resource-files/WICPC2020-Appendix.pdf
This is about more than baby formula, as can be seen, below. This points to problems associated with the welfare state, which no one wants to talk about. It seems to combine the worst aspects of Soviet-like “communism” with the worst of monopoly capital. In this instance, it calls to mind Upton Sinclair’s “The Jungle”, which dealt with the meat-packing industry in 1906. Similar issues need discussion for medical care, such as apparent transfer of welfare costs to paying customers through both higher prices and taxation. They used to call this robbing Peter to pay Paul. It impacts the middle classes, who struggle to survive without welfare, as well as those eligible for welfare, but who don’t want to accept it.
Below is a mix of relevant information, so it is entitled “notes”. It started off as a question regarding regional disparities in baby formula use vs breast-feeding, but a lot of other information was found along the way. The regional disparities suggested that some socio-economic factors are at play.
Families are still eligible for WIC with earnings at 185% of the poverty level, which accounts for the high percentage of eligible families. WIC buys around half of infant formula, so the high level of infant formula use should come as no surprise. While formula is necessary for some people, and WIC is supposed to encourage breast-feeding, there appears to be little motivation to breast feed for WIC participants, since the baby formula is free. The state contracts are to (a) certain provider (s), which means that if there is a production problem by the contractor then it would particularly impact WIC dependent users. Such has been the case with the Abbott recall.
Abbott appears to have a near monopoly on WIC: “Abbott Nutrition is the exclusive supplier for the majority of state WIC agencies, and this has a serious impact on families served by WIC – over 1.2 million infants served by WIC are limited to specific brands of “contract formula,” like Similac.” (US Congresswoman DeLauro) https://miningawareness.wordpress.com/2022/05/14/delauro-4-months-between-infant-formula-recall-when-fda-first-learned-of-potential-danger-report-shows-falsification-of-records-untested-infant-formula-hiding-information-during-2019-fda-a/
“Infants eligible for and receiving the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) are less likely to ever be breastfed (76.9%) than infants eligible, but not receiving WIC (83.3%), and infants ineligible for WIC (91.6%).”https://www.cdc.gov/breastfeeding/data/facts.html This is “ever” breast fed with the percentage dropping over time. In 2020, by three months only 1/3rd of WIC participants were breast feeding (32.6), which dropped to 1/5th ( 22.1) by 6 months. https://www.fns.usda.gov/sites/default/files/resource-files/WICPC2020-Appendix.pdf
“an indirect effect of the program is slightly higher infant formula prices in supermarkets… in an area where WIC participation is significantly higher than the national average.” https://www.ers.usda.gov/amber-waves/2004/september/sharing-the-economic-burden-who-pays-for-wic-s-infant-formula/
“by channeling large volumes of guaranteed purchases to contract-winning manufacturers, the rebate program had the effect of reducing the number of infant formula manufacturers and lessening competition… the U.S. House of Representatives’ Committee on Appropriations, while acknowledging the revenue to the WIC program generated through the use of infant formula rebates, expressed concern “that since rebates began infant formula costs appear to have risen far greater than inflation, and the number of suppliers has declined” (H.R. 106-157).“ https://www.ers.usda.gov/webdocs/publications/46787/15959_fanrr39-1a_1_.pdf
“WIC supports the purchase of formula for moms and families of young children. Typically, there are rules about what products families can purchase with WIC benefits and what stores can allow. USDA has been working with states to relax those rules to help deal with the impacts of the shortage.” https://www.usda.gov/media/press-releases/2022/05/13/usda-continues-urgent-actions-address-infant-formula-shortage
“In 2014, more than 2.4 million infants (62 percent of all infants) in the United States were eligible for WIC. Eighty percent of eligible infants participated in the program. In comparison, 50 percent of eligible pregnant women were covered”. https://www.fns.usda.gov/wic/wic-eligibility-and-coverage-rates So, around 1.9 million participated.
In 2021, 1.5 million infants particpated in WIC: https://fns-prod.azureedge.us/sites/default/files/resource-files/37WIC_Monthly-4.pdf https://www.fns.usda.gov/wic/wic-eligibility-and-coverage-rates
“America’s Infant Formula Crisis and the ‘Resiliency’ Mirage: U.S. policy has exacerbated the problem by depressing potential supply.” By Scott Lincicome, May 11, 2022: https://capitolism.thedispatch.com/p/americas-infant-formula-crisis-and
“Status of Infant Formula Recall – Related Waivers” https://www.fns.usda.gov/wic/infant-formula-waiver-status
USDA March 8, 2022: “The Food and Nutrition Service (FNS) is committed to providing WIC participants with access to a variety of safe and healthy foods, including infant formula. In response to the recall for certain Abbott infant formulas, FNS has strongly encouraged WIC state agencies to take expedient action to ensure that WIC participants can exchange recalled product on hand, and can use WIC benefits in their EBT balance or on paper WIC food instruments to purchase product that has not been recalled.
FNS has offered WIC state agencies the opportunity to request waivers for certain WIC regulations in order to offer maximum flexibility to address this issue. The following waivers have been approved for the states listed under each waiver. States are in the process of reviewing and implementing these flexibilities and will coordinate with their vendors as necessary.” 03/08/2022 https://www.fns.usda.gov/resource/WIC-Infant-Formula-Recall-Waivers
“WIC participants struggle with cost of infant formula, shortages after recall” by: Gabrielle Phifer Posted: Feb 22, 2022 https://www.upmatters.com/news/national/wic-participants-struggle-with-cost-of-infant-formula-shortages-after-recall/
Three member household with income of $42,606 is eligible for WIC. Median individual income (half above and half below) in 2020 was $41,535. (see links further below).
WIC in 2020:
* Seven million women, infants and children were certified to receive WIC benefits in April 2020, a decline of 10.2 percent from April 2018.
* In 2020, the percent of infant participants breastfed after birth was 71.6 percent; 22.1 percent were breastfed at age 6 months.
* More than half (64.3 percent) of participants reported an income below 100 percent of the Federal Poverty Guideline in 2020 compared to 69.5 percent in 2018…” https://www.fns.usda.gov/wic/participant-program-characteristics-2020
“WIC Participation characteristics 2020” summary, report and appendices: https://www.fns.usda.gov/wic/participant-program-characteristics-2020
Differences in Breastfeeding Appear to be driven by culture and access to WIC
“Breastfeeding Disparities Exist.
* Fewer non-Hispanic Black infants (75.5%) are ever breastfed compared with Asian infants (92.4%), non-Hispanic White infants (85.3%) and Hispanic infants (85.0%).3
* Infants eligible for and receiving the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) are less likely to ever be breastfed (76.9%) than infants eligible, but not receiving WIC (83.3%), and infants ineligible for WIC (91.6%).3
* Younger mothers aged 20 to 29 years are less likely to ever breastfeed (81.2%) than mothers aged 30 years or older (85.9%).3” https://www.cdc.gov/breastfeeding/data/facts.html
18.7% of the population is Hispanic (2021). 40.8% of WIC users are Hispanic (2020). Black or African American population is 12.4% of the population and 23.4% of the participants. (They do not distinguish between the original African American population and new migrants from Somalia, etc.) https://www.census.gov/library/stories/2021/08/improved-race-ethnicity-measures-reveal-united-states-population-much-more-multiracial.html
Families are still eligible for WIC with earnings at 185% of the poverty level, which accounts for the high percentage of eligible families. WIC buys around half of infant formula, so the high level of infant formula use should come as no surprise. While infant formula is necessary in some instances, if formula is free, then there’s no motivation to breast feed. There are breast pumps, so the infant not latching on argument doesn’t work. There are refrigerators, which allow storage of breast milk, as well.
“Rebates drive state spending on infant formula but use of non-rebated formula increases state costs. In fiscal year 2004, states paid an average of $0.20 per can for milk-based concentrate formula, a savings of 93 percent off the wholesale price. However, states also allow some use of non-rebated formula that can cost states more than 10 times as much as contract formulas. For example, in 2004, 8 percent of infant formula provided to WIC participants was non-rebated.” https://www.gao.gov/assets/gao-06-380.pdf
“Sharing the Economic Burden: Who Pays for WIC’s Infant Formula
by Victor Oliveira and Mark Prell
Feature: WIC Program
September 01, 2004
Proper nutrition during an infant’s first year is essential for long-term growth and development. Although breastfeeding is the best nutritional method of feeding most babies, not all mothers breastfeed their infants. For these infants, infant formula is a key, or even sole, source of nutrition during their first months of life. Each month, USDA’s Special Supplemental Nutrition Program for Women, Infants, and Children, commonly known as WIC, provides infant formula at no cost to almost 2 million nutritionally at-risk infants in low-income households. In fact, over half of all infant formula sold in the United States is obtained through WIC. But while WIC’s infant formula is free to WIC participants, “there’s no such thing as a free lunch.” Infant formula is no exception to this elementary lesson of economics.
As with other Federal programs, WIC is funded by the U.S. Treasury. Taxpayers alone, however, do not bear the full economic burden of WIC. Infant formula manufacturers provide the State agencies administering the WIC program with rebates of 85 to 98 percent of the wholesale price for each can of formula purchased by WIC participants. These rebates totaled $1.48 billion in fiscal 2002 and supported over a fourth of WIC’s participants.
A recent ERS study of infant formula prices in 47 local areas found that non-WIC households who pay for infant formula out of their own pockets share some of the economic burden as well. The study found that an indirect effect of the program is slightly higher infant formula prices in supermarkets. For example, depending on the brand, feeding an average 3-month-old girl costs between $78 and $92 per month, but monthly costs increase anywhere from $0.32 to $5.26 if the girl’s family lives in an area where WIC participation is significantly higher than the national average. The ERS study focused on retail pricing behavior by supermarkets, setting aside wholesale pricing behavior by infant formula manufacturers.
WIC Serves Almost Half of U.S. Infants
WIC is one of the central components of the Nation’s nutrition assistance system. About half of all infants, a quarter of all children ages 1-4, and a third of all pregnant women participate. Federal program costs were $4.5 billion in fiscal 2003, making WIC the country’s third-largest nutrition assistance program, behind the Food Stamp Program ($23.9 billion) and the National School Lunch Program ($7.2 billion) (see box, “WIC Facts”).
As a supplemental nutrition assistance program, WIC provides vouchers for specific foods that supply target nutrients—specifically protein, iron, vitamins A and C, and calcium—identified as lacking in the diets of low-income pregnant, breastfeeding, and postpartum women and their infants and young children. WIC-approved food categories include milk, eggs, cheese, cereal (hot and cold), infant cereal, juice, peanut butter, dried beans or peas, canned tuna, carrots, and infant formula. WIC infants receive up to thirty-one 13-ounce cans of liquid formula (or its equivalent) per month—an amount that accounts for most infants’ formula needs.
Participants exchange the vouchers for WIC-approved foods at authorized retail outlets, such as supermarkets, small grocery stores, and pharmacies. Retailers submit the vouchers to their bank, which in turn submits them to the WIC State agency to be reimbursed the retail or shelf price of the WIC items.
Formula Manufacturers Offer Big Rebates
WIC was established in the early 1970s. By the mid-1980s, infant formula was accounting for an increasingly large share of total WIC food costs. In an effort to control costs, several States implemented rebate programs with manufacturers of infant formula. As a result of the cost savings from these rebate programs, a Federal law was passed in 1989 requiring WIC State agencies to develop cost-containment systems for the procurement of infant formula.
Most WIC State agencies obtain discounts in the form of manufacturers’ rebates for each can of formula that WIC participants “purchase” (by exchanging vouchers). In return for the rebates, a formula manufacturer receives an exclusive sales arrangement within the State.
That is, WIC participants in the State are given vouchers that can be redeemed only for that brand of formula, making that manufacturer the sole supplier to the WIC market in the State. Each State’s WIC contract is awarded to the manufacturer that bids the lowest net price—wholesale price less the rebate. Thus, the brand of infant formula purchased by WIC participants (the contract brand) can vary from State to State. The State WIC agency bills the contract-winning manufacturer for the rebate specified in the contract. The rebates’ effect on WIC program cost is substantial. In fiscal 2002, it is estimated that infant formula accounted for about 46 percent of total WIC food costs on a pre-rebate basis but only 21 percent on a post-rebate basis.
Rebates per can of formula also vary across States and ranged from 85 to 98 percent of the manufacturer’s wholesale price in fiscal 2000. As a result, the highest net price a manufacturer received for WIC- provided infant formula was only 15 percent of the wholesale price. Net prices in September 2000 ranged from 6.5 cents (per can of milk-based liquid concentrate) in Florida to 44.7 cents in Nebraska and South Dakota. For the U.S. as a whole, net prices averaged 18 cents per can in fiscal 2000.
Both supply-side and demand-side characteristics of the infant formula market help to explain how WIC State agencies can receive such large rebates. On the supply side, the formula market is highly concentrated: in 2000, three companies—Mead Johnson (52 percent), Ross (35 percent), and Carnation (12 percent)—accounted for 99 percent of the infant formula market. A high degree of concentration is often associated with high profit margins, which, in turn, give manufacturers the cushion to offer high rebates. On the demand side, WIC participants purchase over half of all infant formula, assuring large sales for the contract-winning manufacturer. In addition, manufacturers can realize spillover benefits of winning a WIC contract: retailers may devote increased shelf space to the WIC contract brand, which may then lead to increased sales of the brand to non-WIC participants. Sales may also rise if physicians recommend the WIC contract brand to non-WIC mothers. While manufacturers would prefer a higher net price, stipulating a higher net price in a contract bid could jeopardize a formula maker’s chances of winning the contract. Ongoing ERS research is examining factors that affect net formula prices across States.
WIC Raises Infant Formula Prices Slightly
Each of the three major formula manufacturers sets a national wholesale price schedule for retailers, with price based on the size of the purchase. Thus, wholesale prices for a given brand and amount of formula do not vary by geographic area. Any differences in a brand’s retail prices across major market areas are determined primarily by variation in the retail markup—the difference between the retail price and the wholesale price. Retail prices for a particular brand of infant formula vary significantly across the country. For example, the average retail price of a can of Mead Johnson’s Enfamil milk-based liquid concentrate was $2.56 in supermarkets in Albany, NY, in 2000. In San Diego, CA, the same product sold for $3.59. In addition, in any local market, different manufacturers’ brands of formula sell for different prices. Notably, Carnation brand formula typically sold for less than the brands of Ross and Mead Johnson in 2000, due in part to Carnation’s lower wholesale price.
WIC can be thought of as creating two separate markets for infant formula: the WIC market and the non-WIC market. WIC households obtain formula at no cost and are therefore price insensitive, while non-WIC households must pay for the infant formula they purchase and are relatively price sensitive. Federal regulations prohibit retailers from charging WIC participants more than non-WIC customers. However, in local areas where WIC households make up a large share of the area’s formula-buying households, retailers have an incentive to increase the price for the WIC contract brand of formula. Retailers will then receive a higher reimbursement when the WIC vouchers are submitted to the WIC State agencies. (WIC State agencies have the authority to limit the price that WIC-authorized vendors can charge for the WIC contract brand of formula, thus discouraging retailers from charging exorbitant prices for infant formula.)
An ERS analysis of 47 local areas found that WIC and its infant formula rebate program do affect the retail price of formula. Controlling for other factors—such as wholesale price and household income—a manufacturer’s brand of formula was priced higher if it was the WIC contract brand in an area. For a dozen types of infant formula examined, prices increased up to 6 cents (per 26 ounces reconstituted) for the contract brands.
WIC’s relative size in a local area, as measured by the ratio of WIC to non-WIC formula-fed infants, affected retail prices of contract brands as expected. And, in areas where the relative size of WIC is large, retailers have an incentive to raise the price of noncontract brands of formula as well. Once retailers establish a higher price for the contract brand, some non-WIC households may choose to switch to the noncontract brand, resulting in an increase in demand for the noncontract brand. However, retailers have more incentive to increase the prices of WIC contract brands, as WIC households will not change their purchasing behavior if contract-brand prices rise.
What is the impact of these price effects on the monthly budget of a non-WIC family? The formula needs of infants vary. Parents of a 3-month-old girl typically spend between $78 and $92 per month (in 2000 dollars) for milk-based powder formula, depending on brand. If this family moved from an area where half of all formula-fed infants are in WIC to an area where two-thirds are in WIC, their monthly expenditures for infant formula bought in supermarkets would typically increase. For milk-based formula, the most popular type, expenditure increases ranged from $2.87 to $5.26 per month for contract brands and from $0.32 to $4.52 per month for noncontract brands.
WIC and its infant formula rebate program have been successful in terms of making infant formula available to needy infants at a low monetary cost. With rebates from the formula manufacturers, the cost of the formula to taxpayers is a small fraction of its wholesale price.
However, an indirect effect of the program is higher retail prices for non-WIC consumers of infant formula. WIC and its infant formula rebate program each affect the supermarket price of infant formula, although the estimated impact on a non-WIC family’s monthly expenditures for infant formula is modest. Balancing these modest price effects is the fact that rebates support over one of every four participants in the WIC program, or almost 2 million low-income people per month in fiscal 2003.
WIC is working to increase breastfeeding rates among WIC mothers (see box, “WIC and Breastfeeding Rates”). If successful, these efforts could decrease the ratio of WIC to non-WIC formula-fed infants. With price-insensitive WIC participants making up a smaller component of the infant formula market, WIC’s influence in the retail infant formula market will be lessened, resulting in lower retail prices for both contract and noncontract brands of infant formula for non-WIC consumers.
The mission of the WIC program is to safeguard the health of low-income women, infants, and children up to age 5 who are at nutritional risk, by providing supplemental foods, nutrition education, and referrals to health care and other social services. WIC is based on the premise that early intervention programs during critical times of growth and development can help prevent future medical and developmental problems. Administered by USDA’s Food and Nutrition Service, the program provides grants for supplemental foods, nutrition services, and administration to 88 WIC State agencies, including the 50 States, the District of Columbia, Guam, the U.S. Virgin Islands, American Samoa, the Commonwealth of Puerto Rico, and 33 Indian Tribal Organizations.
To qualify for WIC, a family’s income must be at or below 185 percent of the Poverty Income Guidelines ($34,040 for a family of four in June 2004). Applicants who participate or who have certain family members who participate in the Food Stamp, Medicaid, or Temporary Assistance for Needy Families (TANF) programs are deemed to meet the income eligibility criteria automatically. Applicants must also be nutritionally at risk, as determined by a health professional.
WIC officials recognize the numerous health benefits of breastfeeding. WIC, through its nutrition education and breastfeeding promotion programs, encourages mothers to breastfeed their infants. Breastfeeding women get higher priority for certification into the program than nonbreastfeeding postpartum women, and they are eligible to participate in WIC longer than nonbreastfeeding mothers. Mothers who exclusively breastfeed their infants receive vouchers for more foods and larger quantities for some authorized foods than nonbreastfeeding postpartum women. Breastfeeding mothers can also receive breast pumps and other breastfeeding aids to help support the initiation and continuation of breastfeeding.
Although breastfeeding rates are increasing among women participating in WIC—both while in the hospital immediately after giving birth, and 6 months after giving birth—the rates continue to be lower than those of non-WIC women. Although some have questioned whether WIC provides a disincentive to breastfeeding by supplying free infant formula, the women most likely to participate in WIC, including mothers who are poor and have low education levels, are less likely to breastfeed their children in general.” https://www.ers.usda.gov/amber-waves/2004/september/sharing-the-economic-burden-who-pays-for-wic-s-infant-formula/
“Finding: WIC Program
March 04, 2014
Infant Formula Costs to the WIC Program Fall
by Victor Oliveira and Elizabeth Frazão
USDA’s Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) provides eligible low-income women, infants, and children with a package of supplemental foods, nutrition education, and referrals for health care and other social services. Fiscal year 2013 expenditures for WIC totaled $6.4 billion, making it USDA’s third-largest food and nutrition assistance program. WIC served 8.7 million individuals, including 2 million infants, accounting for over half of all infants in the United States. WIC is funded annually by Congressional appropriations. As a result, the number of people who can be served within a fixed budget depends heavily on the program’s food package costs—including the cost of infant formula.
To reduce costs, Federal law requires that WIC State agencies enter into cost-containment contracts with infant formula manufacturers. Typically, a manufacturer gives the State agency a rebate for each can of formula purchased through the program, in exchange for the exclusive right to have its formula provided to WIC participants in the State. Contracts are awarded to the manufacturer offering the lowest net price (the manufacturer’s wholesale price minus the rebate).
Large rebates in recent years have resulted in low net prices for WIC State agencies, typically less than 15 percent of the wholesale price of infant formula. Although still low, a previous ERS study found that real (inflation-adjusted) net prices for formula under contracts in effect in December 2008 were higher than under previous contracts. The report cautioned that rising real net prices could constrain WIC’s ability to serve all eligible applicants.
However, real net prices did not continue to rise. A follow-up study found that among the 46 WIC State agencies that awarded new rebate contracts after December 2008, nearly all paid lower real net prices under their contracts in effect in February 2013 than under their previous contracts. Real net prices decreased by an average 43 percent, or 23 cents per 26 reconstituted fluid ounces. As a result of the lower net prices, WIC State agencies paid $107 million less for formula under their new contracts over the course of a year (holding retail markups constant).
The decrease in net prices occurred during a period of fewer births, higher breastfeeding rates, and changes in WIC regulations that reduced the average amount of formula provided in the WIC food packages. Due to a shrinking market for their product, formula manufacturers may have chosen to compete more aggressively for WIC contracts to maintain their sales volume by offering lower net prices.” https://www.ers.usda.gov/amber-waves/2014/march/cost-of-infant-formula-to-the-wic-program-falls/
“April 19, 2022
SUBJECT: WIC Policy Memorandum: #2022-5 Publication of the 2022-2023 Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Income Eligibility Guidelines
TO: Regional Directors Special Nutrition Programs WIC State Agency Directors All State Agencies
This policy memorandum transmits the 2022-2023 Income Eligibility Guidelines (IEGs) for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) that were published in the Federal Register on March 29, 2022 at 87 FR 17977.
Section 17(d)(2)(A) of the Child Nutrition Act of 1966, as amended (42 U.S.C. 1786(d)(2)(A)), requires the establishment of income criteria to be used with nutritional risk criteria in determining a person’s eligibility for participation in the WIC Program. Income eligibility for the WIC program is determined using income standards as prescribed under Section 9(b) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1758(b)). The income limit is 185 percent of the Federal poverty guidelines, as adjusted. Section 9(b) also requires that these guidelines be revised annually to reflect changes in the Consumer Price Index. The annual revision for 2022 was published by the Department of Health and Human Services (HHS) at 87 FR 3315, on January 12, 2022. In accordance with the established income guidance, the revised WIC income eligibility guidelines are to be used in conjunction with the WIC regulations at 7 CFR 246.7(d).
WIC State agencies may implement the revised IEGs concurrently with the implementation of IEGs under the Medicaid Program. State agencies that do not coordinate implementation with the Medicaid program must implement the revised WIC IEGs no later than July 1, 2022.
WIC State agencies must ensure that Management Information Systems incorporate the 2022-2023 changes accordingly. https://www.census.gov/library/publications/2021/demo/p60-273.html
Three member household with income of $42,606 is eligible for WIC. Median income (half above and half below) in 2020 was $41,535.
* Median household income was $67,521 in 2020, a decrease of 2.9 percent from the 2019 median of $69,560 (Figure 1 and Table A-1). This is the first statistically significant decline in median household income since 2011.
* The 2020 real median incomes of family households and nonfamily households decreased 3.2 percent and 3.1 percent from their respective 2019 estimates (Figure 1 and Table A-1).
* The 2020 real median household incomes of non-Hispanic Whites, Asians, and Hispanics decreased from their 2019 medians, while the changes for Black households was not statistically different (Figure 1 and Table A-1).
* In 2020, real median household incomes decreased 3.2 percent in the Midwest and 2.3 percent in the South and the West from their 2019 medians. The change for the Northeast was not statistically significant (Figure 1 and Table A-1).
* The real median earnings of all workers aged 15 and over with earnings decreased 1.2 percent between 2019 and 2020 from $42,065 to $41,535 (Figure 4 and Table A-6).
* The total number of those who worked full-time, year-round declined 13.7 million between 2019 and 2020. The number of female full-time, year-round workers decreased by about 6.2 million, while the decrease for their male counterparts was approximately 7.5 million (Figure 6 and Table A-7).
* In 2020, real median earnings of those who worked full-time, year-round increased 6.9 percent from their 2019 estimate. Median earnings of men ($61,417) and women ($50,982) who worked full-time, year-round increased by 5.6 percent and 6.5 percent, respectively (Figure 4 and Table A-6).
* The official poverty rate in 2020 was 11.4 percent, up 1.0 percentage point from 10.5 percent in 2019. This is the first increase in poverty after five consecutive annual declines (Figure 8 and Table B-4).
* In 2020, there were 37.2 million people in poverty, approximately 3.3 million more than in 2019 (Figure 8 and Table B-1).
* Between 2019 and 2020, the poverty rate increased for non-Hispanic Whites and Hispanics. Among non-Hispanic Whites, 8.2 percent were in poverty in 2020, while Hispanics had a poverty rate of 17.0 percent. Among the major racial groups examined in this report, Blacks had the highest poverty rate (19.5 percent), but did not experience a significant change from 2019. The poverty rate for Asians (8.1 percent) in 2020 was not statistically different from 2019 (Figure 9 and Table B-1).
* Poverty rates for people under the age of 18 increased from 14.4 percent in 2019 to 16.1 percent in 2020. Poverty rates also increased for people aged 18 to 64 from 9.4 percent in 2019 to 10.4 percent in 2020. The poverty rate for people aged 65 and older was 9.0 percent in 2020, not statistically different from 2019 (Figure 9 and Table B-1).
* Between 2019 and 2020, poverty rates increased for married-couple families and families with a female householder. The poverty rate for married-couple families increased from 4.0 percent in 2019 to 4.7 percent in 2020. For families with a female householder, the poverty rate increased from 22.2 percent to 23.4 percent. The poverty rate for families with a male householder was 11.4 percent in 2020, not statistically different from 2019 (Figure 12 and Table B-2).“ https://www.census.gov/library/publications/2021/demo/p60-273.html
WIC participant appendices https://fns-prod.azureedge.us/sites/default/files/resource-files/WICPC2020-Appendix.pdf
[ UPDATE NOTE: WIC is supposed to be nutritionally “at risk” individuals: https://www.fns.usda.gov/wic/wic-eligibility-requirements https://www.fns.usda.gov/wic/nutrition-risk-criteria
Examples: list here includes too fat, too skinny, teenage pregnancy (17 years old or less), smoker, alcohol, illegal drugs, diabetes, alongside non lifestyle related illnesses. While some diabetes is genetic in origin, some is due, or mostly due, to obesity itself: https://www.health.state.mn.us/docs/people/wic/localagency/program/mom/exhbts/ex6/6a.pdf
Apparently, WIC is a subsidy to the tobacco, alcohol, and illegal drug industries because money that could be spent on food or formula is spent on cigarettes, alcohol, illegal drugs. Prior to welfare, drinking was frowned upon because parents bought alcohol instead of food for their families. Slightly over half of the population is eligible and roughly half of baby formula is purchased through WIC. If WIC exists it should be simply based on poverty, which does make individuals “nutritionally at risk”. These other criteria appear to unfairly punish those who make efforts to live healthily. ]
“Why Do Mothers Stop Breastfeeding Early?
Sixty percent of mothers do not breastfeed for as long as they intend to.4 How long a mother breastfeeds her baby (duration) is influenced by many factors including:
* Issues with lactation and latching.4
* Concerns about infant nutrition and weight.4
* Mother’s concern about taking medications while breastfeeding.4
* Unsupportive work policies and lack of parental leave.5
* Cultural norms and lack of family support.5
* Unsupportive hospital practices and policies.6 “ https://www.cdc.gov/breastfeeding/data/facts.html
“Breast-feeding and pumping: 7 tips for success
Breast-feeding is a commitment. If you’re pumping, follow simple tips for maintaining your milk supply, from pumping often to drinking plenty of fluids”. By Mayo Clinic Staff https://www.mayoclinic.org/healthy-lifestyle/infant-and-toddler-health/in-depth/breastfeeding/art-20048312
WIC participants Breast Pump: https://wicbreastfeeding.fns.usda.gov/finding-breast-pump
“If the WIC program were replaced by an income transfer to poor consumers, manufacturers would set a single price for all consumers. The aggregate demand curve would be more elastic than the one they current face for just the wealthier group. Thus, the prices paid by wealthier parents would fall and that paid by poorer parents would rise (from zero). For the same government expenditure, poor parents would be happier but would spend less on infant formula than under the current WIC program. See: ”WIC Contract Spillover Effects” By Rui Huang* and Jeffrey M. Perloff** August, 2007 https://are.berkeley.edu/~jperloff/PDF/WIC.pdf
“Letter to State Directors Regarding Infant Formula
May 13, 2022
Dear State Health Commissioner:
On behalf of the United States Department of Agriculture (USDA), Food and Nutrition Service (FNS), I am writing to address the Abbott formula recall and its impact on the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). Over the last several months, we have worked closely with WIC state agencies to ensure that they have the information and flexibility necessary to respond to this unprecedented situation. USDA is acutely aware that the ongoing recall has left many parents and caregivers concerned about access to formula and how they will feed their babies.
Today, I am writing to reiterate the flexibilities that USDA has made available to all WIC state agencies and to urge all states to take additional action to make it easier for families to get the formula they need.
On Feb. 18, 2022, FNS issued recall-specific guidance to allow state agencies to take expedient action to ensure that WIC participants could exchange recalled product on hand, and use WIC benefits in their Electronic Benefits Transfer (EBT) balance or on paper WIC food instruments to purchase product that has not been recalled. State agencies should work with legal counsel, procurement offices, and infant formula rebate contractors to:
1. Determine products that may be substituted for recalled products (e.g., an identical product that has not been recalled or a different physical form or container size of the same product, a different contract brand product, or a noncontract brand product).
2. Develop processes for ensuring that all WIC participants can receive enough infant formula that has not been recalled (i.e., either by exchanging recalled product on hand, using WIC benefits to purchase product that has not been recalled, or obtaining product that has not been recalled through the state agency’s home delivery or direct distribution system).
3. Communicate relevant information to WIC local agencies and clinics, participants, health care providers, and vendors.
The guidance also outlined the process to request waivers. To date, USDA has issued more than 200 regulatory waivers to WIC state agencies to allow maximum flexibility to respond to the recall. We have processed these waiver requests within two days, most within a workday. However, we continue to hear reports of WIC participants who are unable to purchase infant formula available on store shelves. In some situations, this is due to regulatory requirements that some state agencies have not requested to waive. Therefore, we request that you immediately review the actions your state agency has taken, including waivers requested (see WIC Infant Formula Recall Waivers), and ensure that the appropriate flexibilities are implemented in order to meet the needs of your WIC participants. The most commonly requested waivers are:
* Maximum Monthly Allowance: A waiver to provide administrative flexibility to exceed the MMA (and to issue multiple container sizes and physical forms) for infants in food packages I and II. (Note: waivers related to food package III are also being considered, on a case-by-case basis.) We believe that this waiver is a critical source of flexibility in all states as both retailers and manufacturers work to manage nationwide changes in supply, and we request that each state agency review policies to ensure full flexibility.
* Medical Documentation: A waiver to provide administrative flexibility to allow for the issuance of noncontract brand infant formula without medical documentation for infants in food packages I and II.
* Vendor Exchanges: A waiver to allow WIC authorized vendors to treat WIC participants like all other customers when they exchange recalled product at the store.
Additionally, we ask that you review your WIC state agency’s policies and procedures related to minimum stocking requirements (MSR) for WIC authorized vendors (i.e., retail stores). All WIC state agencies should be working proactively and collaboratively with WIC authorized vendors during this unprecedented time, not unduly penalizing them as they work to keep up with demand in the face of shortages. Therefore, we request that your WIC state agency update its WIC MSR to remove requirements related to infant formula, if possible and in consultation with legal counsel, and/or forgo periodic assessments of vendor compliance with MSR until formula supply has normalized. Our hope is that removing this requirement in all states will facilitate improved distribution of available formula. More information about the flexibilities available to WIC state agencies related to MSR can be found in the Vendor Management & Food Delivery Handbook.
I recognize there are many uncertainties with this evolving situation and our nation’s infant formula supply. USDA is committed to continuing to meet with key stakeholders (e.g., formula manufacturers and vendor organizations) and providing technical assistance to and between WIC state agencies on issues as they arise. Next week, I’d like to invite you to a listening session with your fellow State Health Commissioners to hear about your specific challenges and promising practices to better inform potential solutions that will ensure that WIC participants receive the program’s important benefits. More details will follow on this opportunity.
I deeply appreciate your WIC staff’s work in response to the recall over the past several months and look forward to your continued efforts to ensure your WIC state agency is taking full advantage of the flexibilities USDA has made available. Please direct your WIC state agency to submit any waiver requests or additional technical assistance needs to its respective FNS regional office as soon as possible. I look forward to our continued partnership as we work together in support of the WIC Program.
Stacy Dean Deputy Under Secretary Food, Nutrition, and Consumer Services U.S. Department of Agriculture
“Potential Effect on Wholesale Prices. Because retailers establish a commodity’s retail price based on a number of factors, including its wholesale cost, factors affecting the wholesale price of infant formula may also affect the retail price of formula. By moving a large number of low-income consumers from the out-of-pocket segment of the infant formula market into the WIC-funded segment of the market, WIC may make it profitable for manufacturers to raise the wholesale price of formula for two possible reasons. First, the remaining higher income consumers of formula in the non-WIC market are less sensitive to price changes.1 Second, the presence of large numbers of price-insensitive customers resulting from the WIC program (since WIC produces a “customer that is essentially unconcerned with the price he or she is paying” for formula) may have “kept the competitive focus of the infant formula companies on promotion rather than pricing” (Post and Wubbenhorst, 1989).
A separate influence on wholesale prices due specifically to the rebate program might occur if, by channeling large volumes of guaranteed purchases to contract-winning manufacturers, the rebate program had the effect of reducing the number of infant formula manufacturers and lessening competition. In addition, the amount of the rebates paid by infant formula manufacturers are another possible influence on wholesale prices. If manufacturers change wholesale prices in response to the payment of rebates, then (holding the retail markup constant) retail prices would be affected in turn (for further discussion, see the 1998 U.S. General Accounting Office report GAO/RCED-98-146).
Potential Effect on Retail Markup.
WIC and its infant formula rebate program may also affect retail prices directly, independent of any effects on wholesale prices. WIC may make it profitable for retailers to raise infant formula retail prices, for given wholesale prices, for reasons similar to those cited above for wholesale price—removing certain low-income consumers from the out-of-pocket market and converting them into price-insensitive consumers supported by WIC. In addition, the rebate program’s feature of sole-source procurement of infant formula can affect retail prices. For example, retailers may increase the retail price of the WIC contract-winning brand of formula because WIC recipients are required to purchase the contract brand of formula. Retailers also may increase the retail price of the contract brand even more if demand for the brand increases in the non-WIC market segment. This increase in demand could occur if retailers increase the contract brand’s shelf space in stores or if physicians or hospitals are more likely to recommend the contract brand to their non-WIC patients (U.S. General Accounting Office (GAO), 1998). While the level of infant formula rebates may potentially affect whole-sale prices, it is thought that rebates do not affect the establishment of retail prices, for given wholesale prices, since manufacturers—not retailers—pay the rebates.
In recent years, Congress has expressed an interest in the possible effects of WIC’s rebate program on non-WIC consumers. In response to a request by the U.S. House of Representatives’ Committee on the Budget, the U.S. General Accounting Office in 1998 analyzed several issues related to infant formula rebates including how prices in the infant formula market changed after the introduction of the rebate program (U.S. GAO, 1998). Because data on retail prices were not readily available, the GAO study focused solely on wholesale prices. In May 1999, the U.S. House of Representatives’ Committee on Appropriations, while acknowledging the revenue to the WIC program generated through the use of infant formula rebates, expressed concern “that since rebates began infant formula costs appear to have risen far greater than inflation, and the number of suppliers has declined” (H.R. 106-157).
In October 2000, Congress directed USDA’s Economic Research Service (ERS) to
(1) report on the number of infant formula suppliers in each State or major marketing area; and
(2) compare the cost of infant formula that is included in the WIC rebate program versus the cost of formula that is not included in the WIC rebate program (H.R. 106-948). In November 2001, ERS delivered a final Report to Congress that specifically addressed the two issues mandated by Congress (Oliveira et al., 2001).” https://www.ers.usda.gov/webdocs/publications/46787/15959_fanrr39-1a_1_.pdf?v=5729.7