NPR’s Planet Money reports that ” Americans spend less on groceries than they did a few decades ago. That’s partly because of new machines and technology that have made it much cheaper to produce food.”
Exhibit A: Watch the amazing video above showing how technology, automation, and innovation have significantly lowered the costs of producing potato chips at the Herr potato chip factory in Nottingham, Pennsylvania. One example: the company now produces 5-6 tons of potato chips per hour (10,000 to 12,000 pounds), compared to 5-10 pounds of chips per hour when the company first started in the 1940s.
Over the last twenty years, the share of consumer spending on food has fallen from about 13% in 1982 to less than 9% last year, thanks to falling grocery prices that have resulted from advances in technology, more automation, and greater efficiencies in food production and delivery. For example, between 1982 and 2012, the inflation-adjusted prices of many common food items fell (see table below), and many of those declines in price have been significant, by as much as one-quarter or more in the case of chicken legs, pork chops, steak, bananas, lettuce and butter.
Bottom Line: Falling real food prices over time, thanks to innovation and technology, is just one example of how all Americans (especially low-income and middle-income groups) are better off today than in any previous period.