The economics behind Brazil’s addiction to junk food

Thousands of men and women walk up and down the streets in Brazil. They carry with them various items ranging from Kit-Kats to pudding. They collectively make up the workforce of Nestlé. Working for nearly $200 a month these vendors bring supplies directly to consumers. They part of a larger problem in Brazil, one that carries economic roots and is affecting the health of men, women, and children nationwide.

As the growth of sales for companies like Nestlé slows down in wealthy countries, they have since turned their attention to isolated areas in regions within Latin America, Asia and Africa to help make up for the loss in profits. The result is a loss of traditional diets in favor of Western processed food and drink. Years ago people in these countries were underweight, now they are obese and more importantly malnourished.

In 1980, 7% of Brazil was considered obese. That number has since doubled to over 18%. This is directly attributed to the availability of packaged foods. From 2011 to 2016, packaged food sales grew by 25 percent worldwide compared to only 10 in the U.S. Even scarier is the sales of soft drinks which in Latin America have doubled and have since overtaken the North American region in sales.

Not only are companies like Coca-Cola and Nestlé finding bigger footing in Brazil, but they are making their influence on local agriculture as well. What were once fields strewn with vegetables have since been replaced with soybeans, corn and sugar. These vegetables make up the bulk of ingredients found in processed foods. As with such companies like Dominoes are reaping the rewards who in 2016 added 1,281 stores, all but 171 were built overseas.

So how did the problem become so bad? Brazil has always suffered from economic disparity. People lacked jobs and the jobs they did have did not pay well enough to sustain a healthy live. Big box companies have since capitalized by not only offering jobs, but providing cheap sources of food that claim to pack all the necessary ingredients. However, the problem runs much deeper than that.

Seeing the problem early, Brazilian politicians aimed to pass legislation in 2010 that would limit the amount of junk food ads displayed to young people. The measures were quickly swift aside by Brazilian food and beverage companies. The remaining legislation that is left is currently being debated over.

Before corporate contributions were banned by the Supreme Court in 2015, politicians saw $158 million dollars donated to the National Congress all from food companies just one year prior in 2014. Coca-Cola was among one of the larger donators with $6.4 million dollars. McDonald’s added another half million to the present $112 million donated by meat giant JBS.

As the last line of defense between a health crisis and the future of its people is debated, thousands of vendors are now living much more fulfilling lives on part of companies like Nestlé. Where the country of Brazil was unable to provide for its people before, big companies are now allowing them to live their dreams. In the New York Times article from which this information is cited, a woman was able to purchase a new refrigerator, television, and stove off of her $185 a month salary. She has since started saving money for a new home.

Nestlé is not helping its salespeople, but their consumers as well. Their over 700,000 direct customers have an entire month to pay for their purchases which allows them to consistently satisfy their eating habits. The company also offers 800 products, many of which are part of new initiatives to limit high salt, sugar, and trans-fat properties. While these initiatives help the consumers, they do more on part of Nestlé. Government aid is delivered at the end of the month and most consumers find themselves over indulging knowing that a check will be sent to them shortly. More so, while these companies boast loads of vitamins their chemical properties leave much to be desired.

Encircling this entire problem is the violence that plagues the streets of Brazil. Parents and children fearful of rampant gang violence have since elected to spend the majority of their time indoors. The ability to have food delivered only keeps them further from the outside. With no exercise in sight, many children fall victim to obesity at a young age.

Brazil now finds themselves in another hole. How do they protect their people from future health issues while still allowing them to live these newfound lives.

California’s housing crisis: What gives?

It’s no new news that California is experiencing a housing crisis. Just how bad the crisis is might surprise you.

The San Jose Mercury News published an in-depth investigation into the current crisis and finally answered the question: “What gives?” and most importantly “What’s next?”

Home ownership in California is at an all-time low since World War II. The average home price is 2.5 times higher than the average price nationally. With a median cost of around $437,000 more and more people are choosing to rent instead of buy.

While renting may seem like the better option it still takes a toll on residents as nearly 70 percent of poor Californians see most of their paychecks go to constantly rising rent. Couple the cost of rent with student loan debt and you have a crisis.

It can be said that while rent is infinitely more expensive in California than other places, residents are still getting paid more. This is indeed true, however, hidden within the truth is the fact that income has not kept pace with rising home costs.

This large income inequality has led many to move out of California, namely those living on the poverty line. From 2000-2015 800,000 residents have moved out of California to other states including Texas. The average income for the thousands that left in 2007 was $50,000.

Those who choose to tough it out and stay in California often become homeless. Between 2015 and 2016, California saw an uptick in homelessness of about 2,400 people. Housing data website, Zillow estimates that a 5% rent increase in Los Angeles would result in an additional 2,000 homeless people. So far rent has increased 4%.

The study found that such a crisis has large repercussions on the economy as a whole. The McKinsey Global Institute found such crisis cost the economy between $143 billion and $233 billion annually.

So how can California fix its problem before the bubble bursts? The state will once again tackle its long-awaited housing package again this month. While help may be on the way it won’t fix the problem entirely. According to the Legislative Analysts Office, helping the 1.7 million poorest residents would cost around $15 billion at the very least. The Los Angeles times estimates that of the three bills being considered only 25% of that estimation would be provided.