Surge Pricing for Diapers

Low income families pay up to 2x prices on diapers, but new and old technologies are helping

By Luke Tate, Special Assistant to the President for Economic Mobility, White House Domestic Policy Council & Josh Miller, Director of Product Management, White House Office of Digital Strategy

Tomorrow, the President will speak at the SxSW Interactive Festival about civic engagement and technology in the 21st century, calling on all Americans to apply their talents and new technologies to address our country’s biggest challenges. Because you don’t need to move to Washington, or work for the government, to strengthen our nation. All of us can answer the President’s call, and, the private sector is often best-suited to solve civic problems with out-of-the-box solutions. Today, the White House is highlighting such an effort: a cross-sector partnership uniting a decades-old manufacturing company, a new e-commerce upstart, and a nationwide non-profit network to level the playing field for families working to provide their babies with the essentials.

The Problem

Today, one in three American families doesn’t have the diapers they need to keep their babies healthy and happy — in large part because it’s expensive to be poor in the United States of America. Low-income families spend an average of $936 per child on diapers every year — double what some higher-income families pay. That can add up to 14 percent of their income, even before covering other essentials like rent, food, heat, and water.

Thanks to the sudden ubiquity of online shopping, many parents reading this post can flip to a new tab or tap their phone, and with seconds a bulk shipment of diapers is on its way to their door — at a price cheaper than the local corner store or supermarket. But if you don’t have a smartphone or broadband internet, can’t afford the upfront cost of an online subscription, or need to pay in cash, these prices and conveniences aren’t available to you.

As a result, lower-income families often pay higher prices for these basic goods, and share that they sometimes feel pressure to stretch or reuse disposable diapers to make limited resources last. When this happens, babies face risk of infections and even hospitalizations, and the stress can lead to serious mental health challenges for caregivers.

To address this issue, the President’s budget calls for a $10 million investment to test effective ways to get diapers to families in need, and document the health gains that result. But we can’t wait on Congress to act, so the White House called on private and non-profit leaders to explore creative ways they can address this widespread public health problem.

Challenges

Unlike other essentials like food or health insurance, federal assistance isn’t available to help families purchase diapers. In its absence, non-profit organizations across the country are attempting to fill the gap. For example, Covenant House’s New York City shelter for homeless youth provides free diapers to the mothers and babies they serve by purchasing diapers in bulk orders.

Even for non-profits, the costs of diaper purchases are still high, and there are nowhere near enough non-profits providing diapers to address the nationwide need. And when you talk to organizations, like Covenant House or the New Haven’s MOMS Partnership, which also helps young parents with the essentials, they share the following challenges:

1. Community centers that provide diapers to low-income families do not order in enough bulk to achieve the cost savings of true scale;

2. Even if they were able to order in very large quantities, neighborhood locations do not have the storage space necessary to store a large quantity of diapers; and

3. Large diaper orders often take one or two weeks to arrive, making it costly and slow to restock — especially in response to an urgent need.

With these challenges in mind, the White House called on the private sector to explore ways to make it easier and more affordable for local non-profits to provide diapers to the Americans that they serve.

Solutions

In response, the private sector teamed up with the non-profit community to address this need.

First, Jet — an e-commerce company that sells and ships diapers and other goods volunteered to address the storage and shipping challenges by leveraging their nationwide warehouses and logistics network to assist nonprofits in purchasing and receiving diaper orders (typically) within two days, for free. They also committed to sell these diapers with no profit to 501(c)(3) organizations serving families in need.

Additionally, First Quality (the makers of Cuties brand diapers) volunteered to design a new type of packaging, simpler than their market model, with less colored printing and more efficient packing — cutting the cost of manufacturing Cuties, a savings that they can then pass along to non-profits.

The combination of these efforts created the Community Diaper Program, launching today, and available to any 501(c)(3) organization in the United States. Now, any non-profit (whether or not they currently provide diapers to families they serve) will able to purchase diapers as much as 25 percent cheaper than the current available price, with no minimum order and 48 hour shipping. This process addresses head on the storage and timing challenges expressed by non-profits in the field. The National Diaper Bank Network, which nationwide operates over 280 diaper banks (similar to food banks), estimates that their members will order more than 15 million diapers through this program in 2016 alone. Best of all, the Community Diaper Program is sustainable, fiscally and organizationally, and will continue to benefit families for years to come.

Jet.com made this video to discuss why they are answering the call to make diapers more accessible and affordable for everyone.

Today, Huggies announced that they are donating an additional two million free diapers to the National Diaper Bank Network, and will match any public donations (up to one million diapers) provided through their Huggies Rewards program until April 10. This new donation is in addition to the 20 million diapers Huggies has already committed to the NDBN this year. Similarly, The Honest Company will donate up to one million of their diapers to Baby2Baby, among other non-profit organizations. These commitments will help provide access to clean diapers for hundreds of thousands of American families in need.

We the People

We are a country built on the idea that every person deserves a fair shot, yet even basic baby essentials are more expensive for our neighbors working hard to make ends meet. We must do more to afford every American a great start in life — and by investing in early education, summer nutrition assistance, and other essentials of early childhood, President Obama’s budget sets us on that path. But today’s announcements demonstrate the tremendous power of Americans responding to the President’s call to action, and using their talents and expertise to meet the needs of working families. That commitment to civic collaboration and active citizenship will help us solve the challenges of the 21st century, in the land of opportunity for all.

Find out how you can get involved today: