Baby Formula Crisis Reveals Urgent Need for People-First Policies

06. 17. 2022

How the baby formula crisis reveals that the fight for direct-cash benefits and against market concentration, are two sides of the same coin.

For the past four months, families across the United States have been struggling to find infant formula–leaving babies hungry and parents desperate. It’s the latest in the barrage of stressors hitting families, especially mothers, who have been grappling with stresses of parenting young children in a continuing pandemic.

Pediatricians are reporting that during a pivotal childhood development stage, the most vulnerable children are the hardest hit: infants with complex medical needs, and those born into low-income and poor families with inflexible work schedules, with limited time and financial resources to scavenge for formula.

Raising children is expensive, the first several years especially so. To support early childhood development and reduce childhood malnutrition, the Special Supplemental Nutrition Assistance Program for Women, Infants, and Children (WIC) provides vouchers for caregivers to purchase foods. The government uses its purchasing power to limit the cost of formula, and in return, WIC families are frequently limited to purchasing a single brand. While supporting the nutrition and health of infants and postpartum parents is necessary, these restrictions on WIC can cause unnecessary hardship for recipient families.

And now, an increasing pool of parents are finding themselves in dire need. Both poor and low-income parents (who are all-too-familiar with the cumbersome and paternalistic brand restrictions on what food they can buy with public benefits), and those parents who despite having relatively more financial resources are also feeling the effects of bad policy choices, highlighting the truth that policies designed to be exclusive are harmful to us all.

What’s most enraging about this crisis is that it was entirely avoidable. We ended up in this crisis because of policies that provided cash-strapped parents with narrow and limited food support, while shaping the conditions for an overly concentrated baby formula market that lacks resilience when put under a bit of stress endangering the lives of millions of babies.

In February, one of the producers Abbott Labs shut down a single manufacturing plant in Michigan following the discovery of deadly bacteria that was linked to the death of at least two infants, stemming from its failure to replace faulty equipment. This is an effect of us allowing an overly concentrated market to develop and calcify. And because the market now consists of just four producers, a single plant going offline effectively cascaded into a nation-wide shortage.

Within a month, parents across America felt the effects of that Michigan plant closure. And, while this shortage continues to impact all caregivers, it is particularly fraught for parents relying on WIC, who account for about half of all formula purchased in the U.S. Though it varies by state, WIC restricts recipients to purchasing a single brand of formula — this allows state governments to secure lower prices through rebates, but also leaves families stranded when that brand is unavailable.

This crisis is the latest devastating, urgent example why we need to demand better policies, ones that prioritize and respond to the needs of people. As we enter year three of a pandemic that has exposed the cracks in our economy — from fractured, insufficient safety nets to repeated shortages due to shocks to our supply chains, and more — our elected officials and policymakers are confronted with a dire need to re-examine policy priorities. Ensuring that children are fed should be an obvious priority.

Despite their well-intentioned focus on serving poor and low-income families, our government programs like WIC — which partners with profit-driven corporations through contracts that prioritize supposed cost-cutting efficiency — need revisiting. It is not just a matter of allowing parents-in-need the dignity to decide what is the best purchase for their family; over the years, these misguided policy choices compounded and put lives at stake.

In increasingly concentrated markets, firms consolidate power and constrain consumer choice and autonomy. We see trends toward higher prices, lower quality products, and less innovation. This trend toward consolidation and concentration exacerbates the policy choices that have handed even more undue power to a handful of corporations that get to decide what is available (or not available) on the grocery store shelves. These profit-driven entities dictate what is worth risking and prioritizing in our markets and in our lives.

Our policies should prioritize providing people, parents — especially the most in need, like poor and low-income families — the autonomy and ability to feed their children. Full stop. As this crisis revealed, access and choice are inextricably tied together. Our economic and social policies play an explicit role in constructing markets, which then has ripple effects on people’s lived experiences of how they negotiate and navigate power and agency in their everyday lives, not just at the grocery aisle but also through their participation in government programs like WIC.

At Economic Security Project, we target policy interventions that could meaningfully impact the lives of Americans. Putting no-strings-attached cash into people’s pockets restores some autonomy in lives that are increasingly subject to the whims of the market; it gives back consumers, families, the power of choice back to their daily lives. On the other side of that equation, we are focused on what has allowed corporations to keep digging deeper into our pockets and accumulate power at the expense of everyday people. To fight for direct cash for families, without also fighting to abate the ill effects of increasing market concentration, would be fighting to reach a standstill.

Learn more about our antimonopoly action work.

Learn more about our fight for a nationwide guaranteed income.