Family Economics Review [1974, Number 1]

              f\ '/ 7· 7 0 8 ~ q 7 4- I
HIGHLIGHTS /WINTER 1974
WHAT PRICE INCREASES MEAN FOR FAMILIES
THE PART OF INCOME THAT GOES FOR FOOD
THE COST OF POULTRY, WHOLE AND PARTS
RENTAL HOUSING IN THE UNITED STATES
COST OF THE LEAN IN GROUND BEEF
MAR 8 1974
447
ARS 62-5
Consumer and Food Economics Institute
Agricultural Research Service
U.S. DEPARTMENT OF AGRICULTURE
FAMILY ECONOMICS REVIEW is a quarterly
report on research of the Consumer and Food
Economics Institute and on information from
other sources relating to ecpnomic aspects of
family living. It is prepared primarily for home
economics agents and home economics
specialists of the Cooperative Extension
Service.
Authors are on the staff of the Consumer and Food
Economics Institute unless otherwise noted.
Editor: Katherine S. Tippett Assistant Editor: Marilyn Doss Ruffin
Consumer and Food Economics Institute
Agricultural Research Service
U.S. Department of Agriculture
- I<' ederal Building
Hyattsville, Md. 20782
WHAT PRICE INCREASES MEAN FOR FAMILIES
by Lucile F. Mork and Frances M. Magrabi
Families are concerned that their dollars do
not stretch as far as they used to. Those with
one or more members now in the labor market
are concerned because additional income from
pay increases does not seem to put them in a
better financial position. Those with fixed
incomes, such as retirement annuities, are con­cerned
because rising prices are not matched by
increases in income. These concerns are
natural. Has income consisting of wages and
salaries kept pace, on the average, with
increasing costs of food, clothing, housing, and
other expenses of family living? And have price
increases seriously eroded the ability of retired
couples on fixed incomes to continue their
planned level of expenditures?
Two Case Studies
To explore the problem of increasing costs
and to see how families have fared during the
last 13 years, we selected two types of
families-a wage-earning family of four with
children of school age, and a retired couple on
a fixed income-established their income and
expenses as of 1961, and projected both
income and expenses forward to 1973 to
m~asure the effects on the family budget of
price and income tax changes during that
period.
Expenditures in 1961 for the case study
families were established at a moderate-cost
level. The USDA food plans and clothing
budgets at the moderate level were used to
determine food and clothing expenditures for a
four-person family (with husband age 30, wife
age 25, a boy age 6, and a girl age 5) and for a
retired couple (both age 65 ). These food and
clothing costs were recomputed each year,
taking into account changes in the age of each
family member. The food costs were updated
using the Cost of Food at Home;1 the clothing
costs were updated based on the annual per­centage
change for clothing in the Consumer
Price Index published by the Bureau of Labor
1 F~r the October 1973 Cost of Food at Home see
p. 22.
WINTER 1974
Statistics. 2 Expenditures for other items of the
family budget were established at the average
for urban families of these two types, based on
data from the 1960-61 survey of CONSUMER
EXPENDITURES AND INCOME, and updated
each year by the percentage change in the
corresponding category in the Consumer Price
Index. This procedure assumes that the families
continued to buy about the same quantity and
quality of items, adjusting only food and
clothing expenditures to meet the changing
needs of family members growing older.
Income taxes-State, Federal, and Social
Security contribution-were computed each
year, using the standard deductions and rates
current in that year. 3
Income for each family was arbitrarily set at
an amount that just covered their total expend­itures
in 1961. The pension for the retired
couple was a fixed amount that did ~ot change ·
over the 13-year period and was assumed to be
their only source of income. For the wage­earning
family, income from wages was
changed each year by the annual percentage
increase of average weekly earnings in private
industry (nonagriculture) as reported by the
U.S. Department of Labor, Bureau of Labor
Statistics. Wages were assumed to be this
family's only source of income in 1961, but
any excess of income over expenditures was
put into a savings account at an interest rate of
4.5 percent. This interest was added to their
income in following years.
The wage-earning family fared well. Under
the assumptions of our analysis, income more
than covered expenditures each year from
1961 through 1973 (see table). I~ the early
years, the diffE)rence was not great and resulted
in only a small savings. For example, in the
second year, 1962, they had an estimated
income of $8,207 and expenses of $8,090, a
difference of about $100. By 1964, the
amount available for saving ($416) was more
2 The Consumer Price Index measures price changes
for goods and services of constant or at least equivalent
quality.
3 In these case studies, Virginia State income tax
rates were used.
3
than double the amount of the previous year
($155), partially due to changes in income tax
rates.
Total projected expenses for the wage­earning
family increased each year because of
pri~e and income tax increases and because
food and clothing requirements increased as
the childten grew older. However, because we
increased their income at the same rate as aver­age
weekly earnings and invested their savings,
Estimated income and expenses from 1961 level projected to 1973
Expenses
Year Income'
I
Savings•
Total Income I Current con- Other
taxes' sumption3
Dollars Dollars Dollars Dollars Dollars Dollars
Four-person family
19616 .......... 0. 7,800 7,781 1,153 6,062 566 19
1962 •••• 0 •• 0 ••••• 8,207 8,090 1,250 6,274 566 117
1963 •••• 0 ••••••• 0 8,457 8,302 1,340 6,396 566 155
1964 ••••••••• 0 •• 0 8,738 8,322 1,253 6,503 566 416
1965 0 ••• 0 •• 0 ••••• 9,113 8,498 1,252 6,680 566 615
1966 •••••• 0 •• 0 •• • 9,500 8,817 1,416 6,835 566 683
1967 ••••• 0. 0. 0 ••• 9,819 9,139 1,482 7,091 566 680
1968 0 •••• 0 ••••••• 10,412 9,830 1,777 7,487 566 582
1969 •••••• 0 ....... 11,095 10,421 2,010 7,845 566 674
1970 0 •• 0 0 •• 0 0. 0 •• 11,590 10,879 2,011 8,302 566 711
1971 ........... 0 •• 12,334 11,225 2,054 8,605 566 1,109
1972 0 ••• 0 0 •••• 0 •• 13,231 11,729 2,214 8,949 566 1,502
19737
••• 0 •••••••• 13,801 12,402 2,528 9,308 566 1,399
Retired couple
19616
•••••••• 0 ••• 4,740 4,729 389 3,823 517 11
1962 ••• 0 0 •••••••• 4,740 4,774 389 3,868 517 -34
1963 • 0 0 ••••••••• 0 4,740 4,821 389 3,915 517 -81
1964 0 0 0 0 ••••••••• 4,740 4,769 319 3,933 517 -29
1965 ••••• 0 0 •••••• 4,740 4,694 213 3,964 517 46
1966 ••••• 0 •• 0 0 0 •• 4,740 4,805 213 4,075 517 -65
1967 • 0 0. 0 •••• 0 •• 0 4,740 4,903 213 4,173 517 -163
1968 • • • • • 0 0 •••• 0. 4,740 5,027 199 4,311 . 517 -287
1969 0 0 ••• 0 •••••• 0 4,740 5,220 196 4,507 517 -480
1970 0 •••••• 0 •• 0 •• 4,740 5,444 194 4,733 517 -704
1971 0 •••••••• 0 ••• 4,740 5,482 149 4,816 517 -742
1972 •• 0 •••••••••• 4,740 5,566 103 4,946 517 -826
19737
••••• 0 •• 0 •• 0 4,740 5,727 103 5,107 517 -987
1 Income arbitrarily set to cover expenses in 1961. For four-person family, income includes wages and interest
on savings from previous years. Wage income updated each year based on percentage change in average weekly
earnings for private industry (nonagriculture), reported by Department of Labor, Bureau of Labor Statistics. For
retired couple, income is from annuity not subject to cost-of-living increases.
2 Includes Federal and Virginia State income taxes computed using standard deductions. Also includes social
~curity contribution for wages in 4-person family.
3 Includes USDA food plans and clothing budgets, moderate level, adjusted each year for changes in ages and
prices. Other 1961 expenditures are averages for the family type from Consumer Expenditures and Income,
Urban U.S., 1960-61, adjusted each year by the Consumer Price Index.
4 Includes personal insurance and gifts and contributions. These expenditures were assumed to remain the
same for each year.
4
5 Equals income minus expenses for the current year.
6 Four-person family consists of husband age 30, wife 25, boy 6, and girl 5; retired couple both age 65.
7 Annual amounts based on a 6-month average in consumer prices and wages.
FAMILY ECONOMICS REVIEW
total income increased by a larger amount than
expenditres. ifference between projected
income and '.Se was about $1,100 for
1971 and $1,500 for 1972. Total income was
projected to exceed expenses by about $1,400
for 1973, based on a 6-month average increase
in consumer prices and wages. The tax estimate
for 1973 includes the new higher rate of con­tribution
for social security.
The budget situation for the retired couple
on a fixed income was not as favorable as for
the wage-earning family. After the first year,
expenditures exceeded income in every year
except one-1965 (see table). A substantial
reduction in their income taxes due to changes
in Federal rates accounted for the slight budget
surplus in that year. Thereafter, although
changes in income tax provisions resulted in
further declines in their Federal income taxes,
increases in consumer prices more than offset
this decline, resulting in a budget deficit each
year. In 1973, the projected difference
between income and expenses amounted to
nearly $1,000, about one-fifth of the retired
couple's income.
Implications
In general, families whose income has kept
pace with average earnings in private industry
should have little difficulty in maintaining and
perhaps slightly improving their level of
expenditures of 13 years ago, provided that
they do not now have additional family
members or extraordinary expenses such as
college expense or large medical bills. Wage­earning
families of the type in this analysis
have undoubtedly made some changes in their
spending patterns in response to changes in the
kind and quality of goods and services available
in the market, changes in the relative prices of
commodities, and the changing needs of
growing children. However, families who feel
that their higher income is not covering their
higher expenses may have moved up in their
scale of living without allowing for the fact
that part of their wage increases must be used
to pay the higher prevailing prices for con­sumer
goods. These families may be buying
more built-in services or operating more cars,
or they may have upgraded their housing.
Families in the United States have come to
accept a rising level of consumption as normal.
WINTER 1974
Thus they come to feel, with some justifi­cation,
that they are not maintaining their level
of living if their consumption does not rise in
the same degree as their neighbors'. It is easy
for families who are experiencing budgeting
problems to lay the blame on higher prices.
However, in order to solve their budgeting
problems, families need to identify accurately
the source of the problem and also state the
problem in a way that suggests possible actions
they might take. The problem may be that
earnings of family members have not kept pace
with average wage increases in their area, that
changes in the size of the family or needs
family members have required greater expend­itures
for various items, that temporarily high
expenses on some items such as housing,
medical care, or education have made it dif­ficult
to keep up the previous level of expend­iture
on other items, or that the family's level
of living has crept up higher than its income
would warrant. Three kinds of action a family
might take include increasing its income,
reducing its scale of living, or adjusting its
budget by decreasing spending on some items
to compensate for necessary increases in other
items.
The purchasing power of families on fixed
incomes, such as the retired couple in our case
study, has i1;1deed been seriously eroded in the
past 13 years, although lower Federal income
tax rates have eased the situation somewhat.
Families starting on retirement in 1961 with an
income j•1st adequate to support a moderate
level of living, would have had to reduce their
expenditures to a level comparable to the low­cost
food plan or to dip into savings accumu­lated
prior to retirement in order to meet the
higher cost of living. If the case study family
had reduced expenses each year starting in
1961 by only 10 percent, they could have built
up some savings that would have enabled them
to continue at the same level of living for
several years beyond 1973.
Families are wise to allow for rising prices
when they develop an income maintenance
plan to support them during periods of reduced
or no earnings, such as unemployment, dis­ability,
or retirement of the breadwinner. A
good income maintenance program is one that
will enable a family to continue at its chosen
level of living during periods of rising prices.
How a family provides for cost of living
5
increases depends on the source of its
maintenance income. Some families are now
aided by provisions for cost-of-living increases
in social security benefits and in some pension
plans. Families relying on income from invest­ments
may want a plan that will provide an
increasing amount of return to cover expend­itures
in future years.
Families who cannot build a cost-of-living
factor into their income plan should recognize
that the cost of a given level of expenditures
will likely increase. They might do well to set
their spending plan at a lower level initially and
avoid forced reductions in later years.
THE PART OF INCOME THAT GOES FOR FOOD
by Betty Peterkin
"Food takes less than 16 percent of after-tax
income in the United States" is a frequently
quoted USDA statistic. Some budget-conscious
families do not see how this can be true, and
their skepticism is justified. Many families do
spend more than 16 percent of their pay for
food. Furthermore, many of them must spend
more than 16 percent if they are to have
nutritious and satisfying meals and snacks to
eat.
The 16 percent figure is the overall pro­portion
of the Nation's disposable personal
income allotted to personal expenditures for
food. Its intended purpose is to show the trend
in the part of the country's income going for
food from one year to the next and from one
decade to the next. For example, according to
these statistics, the percent of income going for
food declined from 20 percent in 1960 to less
than 16 percent in 1973. The figures are
computed from U.S. Department of Commerce
estimates of aggregate national personal con­sumption
expenditures for food and disposable
personal income. These estimates, frequently
referred to as the National Income and Product
Accounts, are developed from business and
government sources, not studies of expend­itures
of individual families. They are the only
nationwide statistics that are reported regularly
from which year-to-year trends in the pro­portion
of income spent for food can be
derived on a continuing basis.
The percent of income going for food, based
on the national accounts, is lower than many
families expect for several reasons:
6
• The "16 percent" has the limitations of
any average figure. lt is computed by
dividing total income into total expend­itures
for food. Totals, of course, include
very wealthy families with incomes many
times those of the average family but with
food expenditures limited by the extent
to which persons can eat more food and
more expensive food. The percent of
income used for food by these wealthy
families is extremely low.
• The accounts include incomes and
expenditures of nonprofit institutions
that spend little, if anything, for food.
• The accounts include, under income,
certain nonmoney income that families do
not count as income, such as the net
rental values of owner-occupied houses
and the value of food and fuel produced
and consumed on farms. (A higher
income, when food expense stays the
same, results in a lower percent of income
for food.)
• The accounts do not include, under food
expense, certain items that some families
include when they budget for food-soap,
paper goods, tobacco, and alcoholic
beverages, for example. {If these items
were included under food in the accounts,
the percent would be higher.)
If 16 percent is not the percent of income
that a family spends for food, what percent is?
The answer depends on many factors-the
makeup of the family, preferences and needs of
family members, the financial assets of the
family, and the demands on those assets.
One way to determine the part of income
that a family might spend for food would be to
look at what part other families of similar size
and income spend. The percent of income on
the average is different for families of different
size and income. Differences can be illustrated
by using income and food expenditure
information from a nationwide study of con­sumer
expenditures made in 1960-61 (see
table 1).
FAMILY ECONOMICS REVIEW
',
,.
I
' I
'J'able 1. -Percent of income spent for food urban families, 1960-61
Annual money income after taxes; ( ) =current dollars'
Family size
I I I
(persons) $2,000 $4,000 $6,000 $10,000 $12,000
I ($3,000) ($6,000) ($9,000) ($15,000) ($18,000)
I Percent Percent Percent Percent Percent
One •••••••••• 0 ••• 27 19 15 11 9
Two ........... . . . 34 24 20 16 15
Three .......... . .. 35 28 23 19 17
Four ••••• 0 0 ••• 0 •• 39 30 25 20 19
Five .............. 43 33 27 22 20
Six or more ........ 49 35 30 25 23
1 Income in 1960-61 estimated in August 1973 dollars by applying the change in the Consumer Price Index,
Bureau of Labor Statistics.
Source: Consumer Expenditures and Income, Urban United States, 1960-61, Supplement 2 - Part A to BLS
Report 237-8, July 1~64. Average expenditures for food at home and away (excluding alcoholic beverages) as a
percent of average money income after taxes plus other money receipts.
Studies of family expenditures, such as this,
have shown consistently that families with high
incomes tend to spend a lower percent of their
incomes for food than families with low
incomes. They also show that large families
generally spend a higher percent for food than
small families. 1 According to table 1, for
example, a three-person family in 1960-61 with
an income of about $12,000 ($18;000 in terms
of 1973 dollars) spent 17 percent of its income
for food, while the same size family with a
·$3,000 income spent 35 percent. Families of 6
or more persons spent on the average, 30 per­cent
of a $9,000 income (expressed in current
dollars) for food; single persons living alone
spent 15 percent of a similar $9,000 income.
The percentages in table 1 do not take into
account changes in food consumption patterns
and income levels since the time of the study.
Changes have, of course, occured. 2 According
to the national accounts data (used in deriving
the 16 percent figure), total iricomes in the
country have increased more than total food
expenditures since 1960. Therefore, the
expected direction of change in percentages of
income going for food would be lower, rather
1 Data from USDA's Household Food Consumption
Survey, Spring 1965, showed that the percent of
income for purchased food used in a week also differed
widely depending on differences in the size and income
of the household.
2 A consumer expenditure survey, now underway,
will provide more up-to-date expenditure information
for families of different size and income.
WINTER 1974
than higher percentages than those shown in
the table.
Another w~y to determine a reasonable per­cent
of income that a family might spend for
food is to start with that family's food budget.
Estimate the amount of money that t_he family
has been using to provide family members with
nutritious, satisfying meals and snacks. Then
figure the percent of the family's income this
food budget represents.
The amount to budget for food for a family
can also be estimated from the cost of food at
home for one of the three USDA food plans­low-
cost, moderate-cost, and liberal.3 The food
plans consist of nutritionally good diets that
reflect eating patterns of low-income, middle­income,
and high-income families. Costs for the
food plans cover food for all meals and snacks
and assume that all food is eaten at home or
carried from home in packed lunches and the
like. If family members buy some meals and
snacks away from home, the cost would
probably be higher.
Table 2 shows the percent of given incomes
that would have been spent for food in August
1973 by families following the low-cost plan. It
illustrates the differences in the percent of
given incomes required to provide a diet of
3 See page 22 for costs for the low-cost, moderate­cost,
and liberal food plans. A fourth plan, the
economy plan, costing about one-fifth less than the
low-cost plan, is a guide for families that have little
money for food.
7
Table 2.-Percent of income required for low-cost food plan U.S. average, August 1973'
Family size
and composition
Annual money income after taxes
$3,000 I $6,000 I $10,000 I $15,000 l $20,000
Percent Percent Percent Percent Percent
Couple, 20 to 35 years
Couple, 55 to 75 years
Three, couple and •
9 to 12 year-old boy
Four, couple and two
3 to 6-year-olds . ...... .
Four, couple and 9 to 12
year-olds, boy and girl ...
Four, couple and two
teenage boys . . . . . . .. - .
Five, couple and one
3 to 6-year-olds, 9 to 12-
year-old boy and girl ....
Six, couple and two
3 to 6-year-olds, 9 to 12-
year-old boy and girl .. ..
42 21
35 17
59 29
61 31
71 35
83 42
81 40
88 44
13 8 6
10 7 5
18 12 9
18 12 9
21 14 11
25 17 12
24 16 12
26 18 13
1 Cost of food in the low-cost food plan, August 1973 times 12 as a percent of given income a year. Cost of
food assumes that all food is eaten "lt home or carried from home in packed lunches and the like. Excludes cost of
nonfood items bought at the store--such as paper goods, soaps, tobacco, and alcoholic beverages. Costs for this
plan and moderate-cost and liberal plans for October are shown on page 22.
equal quality for families of different size and
composition. For example, three families, each
with four persons and each with incomes of
$10,000 after taxes, would need to spend
different percentages of their income for the
low-cost plan, because it generally costs less to
feed younger children than older ones: 18
percent for a couple with two age 3 to
6-year-olds; 21 percent for a couple with two
age 9 to 12-year-olds; and 25 percent for a
couple with two teenage boys.
Obviously some families with incomes as
high as $20,000 would choose more expensive
fare than represented by the low-cost plan. On
the other hand, many families with incomes of
$3,000 would not be able to afford to spend as
high a percent of their income for food as
required for the low-cost plan. Such families
may need to follow the less expensive economy
food plan, or they may be eligible for
assistance through Federal food programs, such
as the Food Stamp Program, the Food
Distribution Program, and the Child Nutrition
Program.
Any method used to determine the percent
of income going for food that takes into
account family size, composition, and income
\vill produce widely varying estimates. Neither
a figure of 16 percent of income or any other
single percent is a reasonable guide for all
families in budgeting for food. Families need to
take their own circumstances into account
when trying to determine what proportion of
income to spend for food.
THE COST OF POULTRY, WHOLE AND PARTS
by Betty Peterkin
Chicken, even at prices twice as high as last
year, remains one of the best buys at the meat
counter. However, not all packages of chicken
are equally good buys. You would generally
expect to pay more per pound for the meatier
8
parts of the chicken-the leg or breast-than for
the whole bird. In addition, you may pay an
extra 20 to 30 cents a pound for the con·
venience of having only legs or breasts.
Table 1 can be used to estimate the added ·
FAMILY ECONOMICS REVIE~
cost, if any, of using chicken parts rather than
the whole chicken. 1 For example, the table
shows that breast halves with ribs at 97 cents a
potmd, drumsticks and thighs at 78 cents a
pound, dru.nsticks at 75 cents a pound, thighs
at 81 cents a pound, and wings at 59 cents a
pound provide as much meat for the money as
1 Revision of similar table first published in FER,
September 1969.
whole chicken, ready-to-cook at 73 cents a
pound. Any amount above these prices for
parts-when ready-to-cook whole chicken is 73
cents-:pays for the convenience of having the
parts of the chicken.
The table car.. also be used to determine
·which of several chicken parts is the best buy.
For example, prices of drumsticks and thighs
might be compared as follows: Locate the store
price of drumsticks ($0.96) in the column
Table 1. -Price per pound of whole chicken, ready-to-cook, and of chicken parts that provide
equal amounts of cooked chicken meat for the money'
If the price Chicken parts are an equally good buy if the price per pound is-per
pound of
whole fryers, Breast half Drumstick
ready-to-cook, is- l and Drumstick Thigh Wing
With rib Without rib thigh
I, Cents Cents Cents Cents Cents Cents Cents
31 ......... 0 ••••• 41 42 33 32 35 25
33 •• •• • •••• 0 •••• 44 45 35 34 37 27
35 .............. 46 48 38 36 39 28
37 .............. 49 50 40 38 41 30
39 • 0 •• 0 •• 0 • • ••• 0 52 53 42 40 43 31
41 • •• 0 •••• 0 ••••• 54 56 44 42 46 33
43 ............... 57 59 46 44 48 35
45 • • •• 0 ••••••••• 59 61 48 46 50 36
47 •• •• 0. 0 ••••••• 62 64 50 48 52 38
49 ••••••• 0 •• •• •• 65 67 53 50 55 39
51 •••••• 0 ••••••• 67 70 55 53 57 41
53 •••• 0 . 0. 0 .... 0 0 70 72 57 55 59 43
55 •• • • • • 0 •• 0 • • • • 73 75 59 57 61 44
57 .............. 75 78 61 59 63 46
59 . .... . .. ..... 0 0 78 80 63 61 66 48
61 . .......... . .. 81 83 66 63 68 49
63 ..... 0 0 •••••••• 83 86 68 65 70 51
65 . ............. 86 89 70 67 72 52
67 ..... 0 ••••••••• 89 91 72 69 75 54
69 .. ....... .... . 91 94 74 71 77 56
71 • •• • •• 0 ••••••• 94 97 76 73 79 57
73 • 0 ••••••••• • 0. 97 100 78 75 81 59
75 ........... ... 99 102 81 77 84 60
77 • • ••••••• 0 •••• 102 105 83 79 86 62
79 ••••••• 0 .. . .... 104 108 85... 81 88 64
81 . . ............ 107 110 87 83 90 65
83 • 0 •• •• 0 0 •••• 0. 110 113 89 85 92 67
85 • 0 ••••••••• 0 •• 112 116 91 88 95 69
87 •••••• • 0 0 ••••• 0 115 119 93 90 97 70
89 0 •••••••• 0 •••• 118 121 96 92 99 72
1 Based on yields of cooked chicken meat with skin (only 1/2 skin on wings and backs included), from frying
chic~ens, ready to cook, that weighed about 2 3/4 pounds.
WINTER 1974 9
headed "Drumstick." Compare the price in the
"Thigh" column on the same line ($1.04) to
the store price of thighs. If the store price is
lower than $1.04, thighs are the better buy; if
the store price is higher than $1.04, drumsticks
are the better buy.
Table 2 shows the price per pound of
whole turkey, ready-to-cook, and of turkey
parts and turkey products providing equal
amounts of cooked turkey meat for the same
amount of money. This table, first published in
FAMILY ECONOMICS REVIEW, December
1~71, is expanded here to include higher I
pr1ces.
Prices in both tables 1 and 2 can be used
with prices in local stores to find the best buys
in chicken and turkey.
Table 2.-Price per pound of whole turkey, ready-to-cook, and of turkey parts and turkey
products providing equal amounts of cooked turkey meat for the money 1
If the price Turkey parts and products are an equally good buy if the price per pound is-per
pound Turkey roasts Turkey Gravy
of whole Breast, Boned with with
turkey, Breast Leg whole Drum- Thigh Wing turkey, gravy,' turkey,'
ready-to- quarter quarter or half stick Ready- Cooked 3 canned canned canned
cook is- to-cook' or frozen or frozen
Cents Cents Cents Cents Cents Cents Cents Cents Cents Cents Cents Cents
51 • 0 ••• ••••• 57 55 65 52 62 47 89 117 115 45 19
53 .......... 60 57 68 54 65 49 93 122 119 46 20
55 •••• 0 0 •••• 62 59 70 56 67 51 96 126 124 48 21
57 •...•••• 0. 64 61 73 58 70 53 100 131 128 50 21
59 ••••••• 0 •• 66 63 75 60 72 55 103 136 133 52 22
61 ••• 0 •••• 0. 69 66 78 63 75 56 107 140 137 53 23
63 ••• 0. 0 • ••• 71 68 80 65 77 58 110 145 142 55 24
65 .......... 73 70 83 67 80 60 114 150 146 57 24
67 •• 0 ••••••• 75 72 85 69 82 62 117 154 151 59 25
69 •••••• 0 0 •• 78 74 88 71 85 64 121 159 155 60 26
71 0 ••••••• •• 80 76 91 73 87 66 124 163 160 62 27
73 ••••••••• 0 82 78 93 75 89 68 128 168 164 64 27
75 .......... 84 81 96 77 92 69 131 172 169 66 28
77 .......... 87 83 98 79 94 71 135 177 173 67 29
79 .......... 89 85 101 81 97 73 138 182 178 69 30
81 .......... 91 87 103 83 99 75 142 186 182 71 30
83 •••• 0. 0 ••• 93 89 106 85 102 77 145 191 187 73 31
85 • 0 •••••••• 96 91 108 87 104 79 149 196 191 74 32
87 ••• 0 0 • •••• 98 94 111 89 107 80 152 200 196 76 33
89 .......... 100 96 113 91 109 82 156 205 200 78 33
91 .......... 102 98 116 93 111 84 159 209 205 80 34
93 .......... 105 100 119 95 114 86 163 214 209 81 35
95 .......... 107 102 121 97 115 88 166 218 214 83 36
97 ••• 0 •• •••• 109 104 124 99 119 90 170 223 218 85 36
99 .......... 111 106 126 101 121 92 173 228 223 87 37 .....
1 Based on yields of cooked turkey meat excluding skin, medium to large birds.
2 Roast, as purchased, includes 15 percent skin or fat.
3 Roast, as purchased, has no more than one-fourth inch skin and fat on any part of surface.
4 Assumes 35 percent cooked boned turkey, minimum required for product labeled "Turkey with Gravy."
5 Assumes 15 percent cooked boned turkey, minimum required for product labeled "Gravy with Turkey."
10 FAMILY ECONOMICS REVIEI
RENTAL HOUSING IN THE UNITED STATES
by Lucie G. Krassa
Although most U.S. families are home­owners,
rental housing is an important and a
necessary alternative shelter. The availability of
rental housing at reasonable prices and of
various types suitable for families of different
sizes and life styles is important for family
welfare.
In 1970, 24 million households (37 percent
of all households) lived in rented housing.
Young families (husband under 25, wife
present), one-person households under 65, and
households with a female head under 65 were
more likely to be renters than homeowners
(74, 66, and 57 percent, respectively). Some
households rent because they cannot find suit­able
housing to buy or cannot afford to buy;
others rent by choice. Households living in
rented housing are likely to have lower incomes
than households living in owner-occupied
housing. In 1969, the median income of house­holds
in rented housing was $6,300, compared
with a median income of $9,700 for those in
owner-occupied housing. Many renters do not
need the greater amount of space usually avail­able
in owner-occupied housing-a median of
5.6 rooms compared with 4.0 rooms in renter­occupied
units. In 1970, more than half the
households in rented housing consisted of one
or two persons.
A greater percentage of renters lived in
multifamily housing in 1970 (36 percent) than
in 1960 (26 percent). 1 In 1970, most renters in
housing built between 1960 and 1970 lived in
multifamily structures. The growing con­centration
of the population in metropolitan
areas, rising land costs, and the changing age
composition of the population have con­tributed
to the declining percentage of renters
in structures with one to four units.
Quality of Rental Housing
The quality of renter-occupied units
improved considerably between 1960 and 1970
when measured by · several criteria. For
example, in 1970, 91 percent of all units had
1 Multifamily structures are those with five or more
units. One-family structures may be detached or
attached to one or more houses.
WINTER 1974
one or more complete bathrooms, compared
with 79 percent in 1960. Newer units (those 10
years old or less) accounted for 22 percent of
the total in 1970 and 16 percent in 1960. Also,
there were fewer persons per room in 1970
than in 1960-the median was 0.6 and 0.7
persons per room, respectively.
Availability and Cost of Rental Housing
The availability of rental housing depends on
the demand for apartments and other housing
suitable for rent and their supply. The demand
for rental units is affected by the rate of house­hold
formation, the composition of the
population, and the demand for owner­occupied
units. The supply of rental housing
depends on the stock of housing resulting from
the volume of residential construction in
preceding periods and trends in home­ownership.
In 1971 and 1972, annual starts of
housing units in all types of structures were
higher than ever before (see table). The
increase of units in multifamily structures is
especially important for the supply of rental
housing, as most new rental housing is in multi­family
structures. They provided about 95
percent of all privately owned rental units
completed in 1971 and 1972. In spite of this
building boom, rental vacancy rates, which are
some indication of the number of choices avail­able
to families looking for rental housing, have
remained at much lower levels than in the early
and mid-1960's. 2
In the second quarter of 1973, 5.8 percent
of all rental units in the United States were
vacant and available for rent. The comparable
figure 10 years earlier was 8.2 percent. A
relatively low vacancy rate exists in all four
regions and in both metropolitan and non­metropolitan
areas. In the second quarter of
1973, the vacancy rate in the Northeast was
particularly low-3.7 percent-in line with a
trend persisting over many years. The rate in
the South was 7.2 percent-higher than in any
other region. The differences in these vacancy
2 The vacancy rate is computed by dividing the
number of vacant units for rent by the sum of the
renter-occupied units, vacant units rented but not yet
occupied, and the vacant units for rent.
11
rates reflect many factors, including building
costs and a higher percentage of households
eligible for subsidized housing in the South
cpmpared with the Northeast and, therefore, a
greater number of hd.using starts in the South.
- About 4 7 percent of all rental units vacant
in 1972 had been built in 1939 or earlier. The
vacancy rate for these units was 5.5 percent,
compared with an 8.5 percent rate for units
built in 1960 or later. Older rental units usually
have fewer facilities than newer units and are
generally less desirable. Therefore, they rent at
a lower cost. Cheaper rental units are generally
more in demand than more expensive ones;
thus, the lower vacancy rate for the older units.
The fact, however, that almost half of the
rental units vacant and available are more than
30 years old reduces the choices for families
who wish newer units.
In the last few years the availability of rental
housing has been affected by the conversion of
some existing rental buildings into con­dominil!
ins. Some renters have been forced to
choose oetween buying the unit in which they
are living or finding new rental housing at
another location. In addition, new multifamily
housing is including more units that are
planned as condominiums or cooperatives. In
the first quarter of 1973, about 10 percent of
all privately owned and not federally sub­sip.
ized multifamily units completed were to be
used as condominiums or cooperatives rather
than as rental housing.
Rents have risen in recent years, along with
other categories of family consumption. The
rise, however, has been less than that for home­ownership.
The Consumer Price Index for rent
in September 1973 was 125.4 (1967=100),
compared with an Index of 149.2 for home­ownership.
3 Households whose income has not
kept up with increases in living costs and who
do not already own may be priced out of the
market. Those who do own their homes have
had to face especially large increases in
property taxes and in expenses for main­tenance
and repairs (price index of 152.7 and
153.9, respectively, in September 1973). Both
are items that are always included in rent.
More than half of all vacant rental units in
3The index for homeownership includes home
purchase, mortgage interest, taxes, insurance, and
maintenance and repairs.
12
1972 were in multifamily buildings, and the
median rent asked for them was $131 per
month.4 This was more than for units in
structures with one unit and for those in
structures with two to four units ($68 and $90
per month, respectively), chiefly because
vacancies in multifamily buildings are likely to
be in newer buildings. The median rent asked
per month for new unfurnished apartments in
multifamily buildings built in 1972 without
Federal subsidy was $191, up from $186 for
those completed in 1971. Newer units are
likely to have. more conveniences than older
units, and this is reflected in the rental cost.
About 57 percent of the apartments completed
in 1971 had two or more bedrooms; 56 percent
had air conditioning included in the rent ( 30
percent had air conditioning available at extra
cost); and 71 percent had swimming pools
included in the rent. ·
Subsidized Housing
Public housing and private housing sub­sidized
by the Government provide a way for
low- and moderate-income families tq obtain
better housing than they would otherwise be
able to afford. 5 In 1970, housing units built
with Government subsidies and housing that
was publicly owned increased substantially­both
in the number of units and in the per­centage
of total housing units started (see
table). The increases in public and subsidized
housing were in response to legislation passed
in 1968 and 1970. Since 1970, however, when
the share of subsidized housing and public
housing in total multifamily starts reached a
high of 45 percent, there have been major cut­backs
in subsidized and public starts. Early in
1973, a moratorium was announced on all new
commitments under subsidy programs pending
investigation of the costs of the programs and
their effectiveness. This suspension was
partially lifted in the President's housing
message of September 19, 1973, which
announced that 150,000 subsidized new rental
units for low-income persons would be started
in fiscal year 1974.
Most of the units built under subsidized and
4 Rental costs given here do not always include
utilities.
5 Multifamily subsidized housing is available for
renting or for ownership by cooperatives.
FAMILY ECONOMICS REVIEW
··'
New housing units started 1968 to 1973
All structures (1 unit or more) Multifamily structures (5 units or more)
Year
All starts I Public and private All starts Public and private
subsidized starts 1 subsidized starts 1
Thousand Thousand Percent Thousand Thousand Percent
1968 •••• 0 •••• 0 •• 1,545.4 165.5 11 549.7 136.4 25
1969 • • •••• 0 •• 0 •• 1,499.5 199.9 13 590.1 138.8 24
1970 •••••• 0 ••••• 1,469.0 429.8 29 558.0 253.8 45
1971 •••••• 0 ••••• 2,084.5 4(l0.0 21 798.5 218.3 27
1972 ••• 0 • •• 0 • • • 0 2,378.5 332.3 14 917.0 154.6 17
1973
1st quarter ...... 487.9 55.3 11 200.7 23.8 12
2nd quarter 0. 0 •• 643.0 60.5 9 236.4 28.1 12
3rd quarter' ..... 546.8 32.9 6 208.4 17.8 9
1 Includes low-rent public housing and units in privately owned housing assisted by various Government
subsidy programs. Includes subsidy programs administered by the Farmers Home Administration.
2 Preliminary.
Source: U.S. Department of Commerce, Bureau of the Census, Construction Reports, Housing Starts, C20-73-9,
p. 3. U. S. Department of Housing and Urban Development, .Subsidized Housing Production, June 1, September
7, and November 7, 1973.
public housing programs are in urban areas and
are administered by the U.S. Department of
Housing and Urban Development. The number
of new rental units in rural areas under
programs administered by the Farmers Home
Administration of the U.S. Department of
Agriculture is small compared with those in
urban areas, but the number has increased over
the past few years.
Tenants living in rental housing covered by a
subsidy program are generally required to pay
not more than one-fourth of their income as
rent. The owner of the property must be a non­profit
organization, a cooperative, or a limited­dividend
corporation. Mortgage assistance to
the owners makes it possible to charge reduced
rents. Under another program, the tenants
themselves receive supplements from the
Government that enables them to pay full rent.
Tenants in public housing pay a maximum
of 25 percent of income for rent. The median
rent, including utilities, for families moving
into public housing between October 1, 1970,
and September 30, 1971, was $48.
Sources: U.S. Department of Commerce, Bureau of
the Census, 1970 CENSUS OF HOUSING; U.S
CENSUS OF HOUSING 1960; CONSTRUCTION
REPORTS, NEW ONE-FAMILY HOMES SOLD AND
FOR SALE, C 25; CURRENT HOUSING REPORTS,
HOUSING VACANCIES, H-111; CURRENT
HOUSING REPORTS, MARKET ABSORPTION OF
APARTMENTS, H-130. U.S. Department of Housing
and Urban Development, 1971 HUD STATISTICAL
YEARBOOK. Miles, B. L., and Robinson, T. R.,
Residential Construction Boom, 1970-73, SURVEY
OF CURRENT BUSINESS, pp. 14-22, May 1973.
COST OF THE LEAN IN GROUND BEEF
by Cynthia Cromwell
Ground beef is recognized as one of the best
buys at the meat counter. How good a buy it is
may depend on which type of ground beef­"
regular," "lean," "extra lean," or other-is
selected.
Your decision to purchase a certain ground
beef may be based on several factors-what the
recipe calls for, appearance, taste preference,
WINTER 1974
special diet requirements, price, the cut of beef
it comes from, and the amount of lean meat
you get for your money. Many experts believe
that the proportion of lean in ground beef is a
more important factor than whether or not the
beef comes from a tender cut, because grinding
the meat tenderizes it_ Furthermore, the
amount of lean in a pound of ground beef is an
13
indication of the amount of protein it contains;
i.e., the more lean, the more protein. Many
people buy "lean" and "extra lean" ground
beef thinking that they get a better buy in lean
meat and protein. However, the price you pay
for " lean" and "extra lean" is higher than the
price you pay for "regular"-usually so much
higher that "regular" ground beef gives you
more lean, and therefore more protein, for
yoirr money.
You can com pare the cost of lean from
various forms of ground beef as follows: First,
Cost per po;u_nd of lean from ground beef at various prices per pound
with specified percents of lean
Price Percent of ground beef that is Jean 1
per pound of
ground beef 71 I 73 I 75 I 77 I 79 I 81 I 83 I 85 I 87 I 89 I 91
Cents Cents Cents Cents Cents Cents Cents Cents Cents Cents Cents Cents
81 ..... . . . .. . 114 111 108 105 103 100 98 95 93 91 89
83 ..... . ..... 117 114 111 108 105 102 100 98 95 93 91
85 ... .. . .... . 120 116 113 110 108 105 102 100 98 96 93
87 ......... . . 122 119 116 113 110 107 105 102 100 98 96
89 . .. .. ...... 125 122 . 119 116 113 110 107 105 102 100 98
91 ........ . .. 128 125 121 118 115 112 110 107 105 102 100
93 . .... .. .. . . 131 127 124 121 118 115 112 109 107 104 102
95 ........... 134 130 127 123 120 117 114 112 109 107 104
97 .... . ...... 137 133 129 126 123 120 117 114 111 109 107
99 .... . . . .... 139 136 132 129 125 122 119 116 114 111 109
101 .... .. .... 142 138 135 131 128 125 122 119 116 113 111
103 .. ..... . .. 145 141 137 134 130 127 124 121 118 116 113
105 .... . .. .. . 148 144 140 136 133 130 127 124 121 118 115
107 .......... 151 147 143 139 135 132 129 126 123 120 118
109 . ... ...... 154 149 145 142 138 135 131 128 125 122 120
111 .. . ... . ... 156 152 148 144 141 137 134 131 128 125 122
113 .... . ... . . 159 155 151 147 143 140 136 133 130 127 124
115 .......... 162 158 153 149 146 142 139 135 132 129 126
117 . ..... ... . 165 160 156 152 148 144 141 138 134 131 129
119 . ......... 168 163 159 155 151 147 143 140 137 134 131
121 . ... .. .... 170 166 161 157 153 149 146 142 139 136 133
123 . . . .. . .... 173 168 164 160 156 152 148 145 141 138 135
125 .. . .. . .... 176 171 167 162 158 154 151 147 144 140 137
127 .. ........ 179 174 169 165 161 157 153 149 146 143 140
129 ....... . .. 182 177 172 168 163 159 155 152 148 145 142
131 .... .. .... 185 179 175 170 166 162 158 154 151 147 144
133 . . ..... . .. 187 182 177 173 168 164 160 156 153 149 146
135 .......... 190 185 180 175 171 167 163 159 155 152 148
137 . . .. . ..... 193 188 183 178 173 169 165 161 157 154 151
139 ......... . 196 190 185 181 176 172 167 164 160 156 153
141 .......... 199 193 188 183 178 174 170 166 162 158 155
143 .. . . .. . . .. 201 196 191 186 181 177 172 168 164 161 157
145 .. ... ..... 204 199 193 188 184 179 175 171 167 163 159
147 .......... 207 201 196 191 186 181 177 173 169 165 162
149 ....... . .. 210 204 199 194 189 184 180 175 171 167 164
1 Ask the butcher what percent of lean is in "regular," "lean," "extra Jean," and any other types of ground
beef he sells. In the Washington, D.C. area, "regular" was found to contain between 70 and 75 percent lean;
"lean," 75 and 80 percent; and "extra lean," 80 and 85 percent.
14 FAMILY ECONOMICS REVIEW
ask the butcher what the percent of lean is in
the different types of ground beef he offers.
(The store probably has certain percents of
lean it trys to conform to.) Then divide the
price per pound of each type by the percent of
lean it contains. For example, from ''regular"
ground beef priced at $1.05 a pound and con­taining
7 5 percent lean, the cost per pound of
the lean portion is $1.40, or $1.05 divided by
$0.75. Similarly, from "lean" ground beef
priced at $1.29 a pound and containing 80
percent lean, the cost per pound of the lean
portion is $1.61, or $1.29 divided by $0.80.
Therefore, the "regular" ground beef, costing
$1.40 per pound of lean, is the better buy in
lean meat. In the Washington, D.C., area,
"regular" ground beef was found to be con­sistently
less expensive as a source of lean and
of protein than "lean" or "extra lean."
If you are concerned about the amount of
fat in ground beef, then you may decide to
purchase the "lean" ground beef at the higher
price. In the example above, you will pay 21
cents more per pound of lean meat for the
advantage of having 5 percent less total fat in
the pound of ground meat you buy.
You can also make these comparisons by
using the table on page 14, where the cost of a
pound of lean is shown for ground beef with
specified percents of lean at different prices per
pound of the ground beef.
To find the cost of a pound of lean for a
package of ground beef, locate the column
headed by the percent of lean the butcher tells
you the ground beef contains (or the nearest
percent shown). Move your finger down the
column until it is opposite the price per pound
of the ground beef. The cost shown there is the
cost per pound of lean from that type of
ground beef. Repeat this procedure for each
type of ground beef that you are interested in.
Then compare these costs per pound of lean
and make your decision.
There are regulations covering the pre­paration
of beef that. is ground and packaged in
a Federal- or State-ins~cted plant. A product
labeled as "ground beef" !'RUSt be ground beef
with no extra fat, water, exterrders, or binders
added. Seasonings may be added, as long as
they are identified on the label. "Hamburger"
is ground beef to which seasonings and p1eces
of beef fat may be added while the meat is
being ground. No added water, extenders, or
binders are permitted. Ground beef must con­tain
a minimum of 70 percent lean meat per
pound of ground meat.
The grindin-g and labeling done in the super­market,
however, may not have to conform to
these or any other definitions. Supermarkets
can prepare and label their ground beef
according to their own preferences.
In an attempt to set some guidelines, the
National Live Stock and Meat Board recom­mends:
(1) that standards for all ground beef
be decided by lean-to-fat content and that this
quality be shown on the label as "NOT LESS
THAN X% LEAN" and (2) in no case should
the lean content of ground beef ever be less
than 7 0 percent.
CONSUMER PRODUCT SAFETY COMMISSION
Consumer product safety is the function of a
new, independent Federal agency that was
established by the Consumer Product Safety
Act of 1972 and that became operational in
the spring of 1973. The Consumer Product
Safety Commission is empowered to develop
and enforce uniform safety standards and to
ban hazardous products. The new Commission
is responsible for regulating a wide variety of
consumer products, including toys and
thousands of household products not covered
under previous laws. Specifically, the Com­mission
will
WINTER 1974
• protect the public against m]uries asso­ciated
with consumer products;
• develop uniform standards for consumer
products;
• assist consumers in evaluating the
comparative safety of products;
• mmuniZe conflicting State and local
regulations;
• promote research and investigations into
tlie causes and prevention of product­related
deaths, illnesses, and injuries.
The basis for all Commission activities will
15
be data on product-related injuries and deaths.
From these data will come analyses and an
effort to encourage action by the industrial and
business communities. If they fail to act or if
their actions are not adequate or universally
adhered to, the regulatory authority of the
Commission will be brought into play.
The Commission may require industry to
maintain specific records, make reports, and
provide needed information. It also is author­ized
to conduct hearings and inquiries, and it
can require the attendance and testimony of
witnesses and the providing of relevant
evidence.
The public; industry and business; and
Federal, State, and local governmental agencies
will be given full opportunity to participate in
the development of product safety standards.
One way is through representation on a 15-
member Product Safety Advisory Council that
will meet at least four times a year to advise
the Commission. Additionally, any interested
person or organization can petition the Com­mission
to issue, revoke, or amend a product
safety rule.
Regulation of "consumer products" by the
Commission does not include motor vehicles,
pesticides, aircraft, firearms, boats, or tobacco
products. Regulation of these items is left to
other agencies. The -egulation of foods, human
and veterinary medicines, cosmetics, medical
devices, biologicals, and radiation remains with
the Food and Drug Administration (FDA).
The Consumer Product Safety Commission
is located at Washington, D.C. 20207.
Source: Jensen, M. W., and Folkes, T. M., A New
Era in Consumer Safety. FDA CONSUMER, pp. 10-13,
February 1973.
SURVIVOR'S PENSIONS
A survivor's annuity-monthly payments to
a spouse of a deceased active or retired
worker-may be an important part of a family's
retirement planning. In 1971, however, only 19
percent of the 21 million workers covered by a
private pension plan 1 were in a plan with an
automatic survivor's benefit. This excludes
plans with survivor's options in which a
survivor is entitled to benefits only if the
worker elects before retirement to have a
portion of his pension continued to his spouse
after his death. Such plans are not a completely
satisfactory means of providing income
protection for survivors because the worker is
often unwilling to take the option since his
retirement benefit is then reduced.
Automatic survivor's pensions were most
likely to be provided by plans covering workers
in manufacturing, communications and public
utilties, and transportation (24 percent); ar.d
workers in finance, insurance, and real estate
(15 percent). Survivor's pensions were rare in
1 Includes private pension pl~ns covering 26 or more
active and retired workers. Financial data for these
plans must be filed with the U.S. Department of Labor
under the Welfare and Pension Plan Disclosure Act.
Plans reported under this act cover two-thirds of all
workers in private plans. Most workers in pension plans
not included here belong to plans not reported under
the act (chiefly small plans and plans of nonprofit
organizations) or to profit-sharing plans.
16
mining, constuction, wholesale and retail
trade, and services. Survivor's pensions were
seldom provided by plans covering less than
1,000 workers. In plans with 100,000 or more
participants, however, automatic survivor's
benefits were present in plans that covered
almost half of the workers.
In private pension plans with a survivor's
benefit, the benefit almost always was payable
to survivors of active workers and usually to
survivors of retirees as well. The proportion of
the worker's pension payable to survivors
ranged from 30 to 100 percent. About 4
workers in 10 were in plans that would pay 50
percent of the worker's pension to the survivor;
another 3 were in plans paying 51 to 54
percent. Plans that paid benefits only to
survivors of active workers tended to be more
generous than t~ose paying benefits to
survivors of both active and retired workers.
Some plans limited payments to survivors of
male participants. A few of these plans,
however, modified this exclusion to permit
payments to "dependent" widowers-that is,
men whose wives contributed more than 50
percent of total household income. Most plans
were designed to aid the surviving spouse.
HowE:ver, some provided the regular survivor's
pension to minor children in the absence of a
surviving spouse, others paid benefits to the
FAMILY ECONOMICS REVIEW
spouse and to mjnor children; and still others
gave preference, to minor children over the
surviving spouse. Provisions for minor children
were included in plans covering more than
one-fourth of the workers with such pensions.
Most of the pension plans with survivor's
benefits were aimed at protecting survivors of
long term workers. Four of five workers
covered by such plans had to satisfy minimum
age and length of service requirements before
their survivors would be eligible for a benefit.
In plans covering about 70 percent of the
workers, the amount of the benefit could be
reduced because of the age or other character­istics
of the survivor.
Source: Hodgens, E. L., Survivor's Pensions: An
Emerging Employee Benefit. MONTHLY LABOR
REVIEW, pp. 31-34, July 1973.
PENSION PROVISIONS AFFECTING THE EMPLOYMENT
OF OLDER WORKERS
Most private pension plans place conditions
on the worker's right to retire on a full
pension. Age and length of service require­ments
assure that the prospective retiree has
made a substantial contribution to the business
involved. Some.private pension plans also have
provisions that may force older workers to
retire or that limit their employment
opportunities after retirement. To determine
the prevalence of such provisions the U.S.
Department of Labor studied the pension plans
covered under the Welfare and Pension Plans
Disclosure Act in 1971. This act requires com­panies
with private pension plans covering 26
or more active and retired workers to file
financial data with the U.S. Department of
Labor. In 1971, the act covered p~ans
employing 21 million workers, over two-thirds
of all workers in private plans. Workers in
pension plans not covered by the act and there­fore
not covered in this study generally ~e
enrolled in small plans covering less than 26
workers, in plans of nonprofit organizations, or
in profit-sharing plans. Most workers studied
belonged to one of a few large plans; over half
were in the 2 percent of plans covering 10,000
or more workers. Nearly four ~f five plans
studied covered fewer than 1,000 workers;
these accounted for only 16 percent of all
workers studied.
Mandatory and Early Retirement Provisions
Mandatory retirement provisions, which
stipulate that a worker must leave his job at a
given retirement age regardless of his health or
wishes, provide employers with a tactful way
to remove older workers and advance the
young. In 1971, 58 percent of the workers in
WINTER 1974
private plans studied were covered by plans
that had mandatory retirement provisions. The
majority of these were "compulsory"­stipulating
that a worker must retire at a given
age unless his employer grants him permission
to continue working. Some workers' were
covered by, "automatic" retirement provisions
that compel all workers, without exception, to
retire upon reaching a specified age. A few
plans had both provisions, with automatic
retirement usually applicable 3 to 5 years after
the compulsory age when the employee has
been granted permission to continue working.
The prevalance of mandatory retirement
provisions differed by industry, ranging from
73 percent in communications and public
utilities to only 3 percent in contract con­struction.
E1;lflY retirement provisions strive to tailor
retirement to the desires and capabilities of the
individual worker by allowing eligible workers
to retire voluntarily with an immediate reduced
lifetime benefit. These provisions covered 92
percent of the workers under the pension plans
studied. Some plans also have special early
retirement provisions that provide benefits for
workers who have been forced to retire because
of "special circumstances," such as long term
layoff or terminatiou because of plant closing.
Also, special retirement provisions may allow
older workers who have not reached normal
retirement age and who can no longer cope
with the physical or mental demands of the
job, or those who rossess obsolete skills, to
retire. Special early retirement provisions
covered 17 percent of the workers studied.
Despite the benefits to workers from regular
and special early retirement provisions, these
rules may have built-in pressures that place
17
workers in an unfavorable employment
situation. For example, some employers may
try to persuade older workers to retire early
during periods of high unemployment and
technological change. Also, employers who
assume the expense of an accelerated early
retirement program are unlikely to be inter­ested
in hiring older workers.
Benefit Restrictions
Some provisions in private pension plans
may limit the employment opportunities of
older workers by restricting their benefits. For
example, some plans do not credit service after
retirement age, others restrict the age at which
newly hired workers may join a pension plan,
and others restrict employment after
retirement.
About 65 percent of the workers studied
were in plans limiting the amount of service
credited after the normal retirement age. In
most plans workers could receive no credit for
service after normal retirement age; in other
plans workers could receive credit for a limited
number of years. A few plans credited only the
amount of additional service necessary for a
minimum pension. Such restrictions limit the
pension that any worker can earn, and may
also exclude newly hired older workers from
participating in plans or discourage the employ­ment
of older applicants. For example, workers
hired after age 50 are implicitly excluded from
participating in a plan that requires 15 years of
service to qualify for a benefit and that denies
credit for service after age 65 . .
In 1971, 64 percent of the workers with
private pension coverage were in plans which
set maximum age limits for workers to join the
plan. About two-thirds of these were in plans
in which the maximum age limit was implied,
rather than explicit, by the relationships among
age and service requirements, by provisions
limiting the amount of service credited to a
· worker after normal retirement age, and by
mandatory retirement provisions.
Once a worker has retired, he may be dis­couraged
from seeking other employment by
proVIsiOns of his pension plan-provisions
possibly intended to keep retired workers from
reentering the labor market and competing
with young workers for available jobs and to
keep them from working for a competing firm.
Some restriction on postretirement employ­ment
was found in plans covering 40 percent of
the workers studied.
Source: Davis, H. E., Pension Provisions Affecting
the Employment of Older Workers. MONTHLY
LABOR REVIEW, pp. 41-45, April 1973.
USE OF BANK CREDIT CARD AND CHECK CREDIT PLANS
Bank credit cards and check credit plans are
two relatively recent sources of consumer
credit. Knowledge of the availability of these
credit sources can help families make decisions
about their financial management.
At the end of 1972, 6 of every 10
commercial banks in the United States
provided credit card services to their cus­tomers,
and 1 in 10 operated a check credit
plan. The amount of credit that banks
advanced under these programs came to $12.6
billion during 1972-about a fifth of the total
consumer installment credit extended by
commercial banks.
Between 1967 and 1972 these two types of
plans expanded more rapidly than other kinds
of credit plans with which they competed, such
as travel and entertainment credit cards, oil
company credit cards, and retail charge
18
accounts. This growth reflects the fact that
most types of retailers (with the exception of
large department stores and supermarkets) have
supplemented or replaced their own credit
plans with bank credit card plans.
Over the same 5-year period, bank credit
card and check credit plans increased in
importance relative to all kinds of consumer
installment credit offered by commercial
banks. The two plans together rose from 9
percent of total bank installment credit
extensions in 1967 to more than 20 percent in
1972. This change reflects, in part, the
substitution of the bank card and check credit
for certain types of installment loans, partie·
ularly personal loans or furniture and appliance
loans.
With the growth in bank credit card and
check credit plans, consumers have assumed
FAMILY ECONOMICS REVIEW
more control over the management of their
debt. Both types of plans provide prearranged
revolving credit instantly available to the
borrower and, within broad limits set by the
bank, both allow the borrower to decide upon
the pattern of debt repayment. In many
instances, consumers use the bank credit cards
as a convenient substitute for cash or checks in
transactions. About one-third of all bank credit
card accounts are, in fact, repaid 'Yithin the
interest-free period.
Credit card plans are now available in almost
all localities of the country. All States and 75
percent of all counties have banks with plans.
Coverage varies considerably among States,
however. In nearly a third of the States, plans
are available in most counties, while in other
States as few as one-fifth of the counties have
plans.
Only one-fifth of all cr· ... nties have banks
offering check credit plans. These are located
mostly in the Northeast and Far West.
Source: Seiders, D., Credit Card and Check Credit
Plans at Commercial Banks. FEDERAL RESERVE
BULLETIN, pp. 646-653, September 1973.
BLS BUDGET COST ESTIMATES - AUTUMN 1972
For an Urban Family of Four
The Bureau of Labor Statistics' three
hypothetical budgets for a family of four
ranged from $7,386 a year at the lower level to
$11,446 at the intermediate level and $16,558
at the higher level in autumn 1972 (see table).
The intermediate and higher budgets were
about 4 percent above the budgets for autumn
1971. The increase for the lower budget was
smaller-2.4 percent-reflecting changes in
Federal income tax regulations that reduced
the amount of taxes in the lower budget. The
costs are for an urban family of four: a
38-year-old husband, his wife who is not
employed, a boy of 13, and a girl of 8. The
budgets do not represent how families of this
type actually spend their money. Rather, they
reflect the assumptions made about the manner
of living at each of the three levels.
The consumption items-food, housing,
clothing, transportation, medical care, and
other family consumption-came to 82 percent
of the total budget at the lower level, 79
percent at the intermediate level, and 75
percent at the higher level. The remainder
covered gifts and contributions, occupational
expenses, life insurance, and social security and
personal income taxes.
Total budget costs were 10 percent higher in
metropolitan areas than in nonmetropolitan
urban areas (places with 2,500 to 50,000
Annual budgets at 3 levels of living, urban United States, autumn 1972
For a 4-person family For a retired couple
Component
Lower Inter- Higher Lower Inter- Higher
I mediate mediate
I Total budget ........... $7,386 $11,446 $16,558 $3,442 $4,967 $7,689
Total family consumption .... 6,029 9,013 12,462 3,294 4,661 6,842
Food ................... 2,058 2,673 3,370 989 1,328 1,671
Housing ................ 1,554 2,810 4,234 1,209 1,745 2,730
Transportation ........... 546 979 1,270 230 448 811
Clothing ................ 667 956 1,400 172 289 445
P!!rsonal care ............. 197 261 370 101 148 217
Medical care ............. 629 632 659 432 434 437
Other family consumption .. 378 702 1,159 161 269 531
)ther items ............... 365 576 967 148 298 584
raxes . ................... 992 1,857 3,129 -- 8 263
Social security and disability 397 482 482 --- --- --
Personal income taxes ...... 595 1,375 2,647 -- 8 263
rrNTER 1974 19
inhabitants) for the lower budget, 15 percent
higher for the intermediate budget, and 22
percent higher for the higher budget. The
budget levels were lowest in small cities in the
South. The area indexes, representing dif­ferences
in budget costs for equivalent levels of
living, reflect not only differences among the
areas in price levels, but also regional variations
in consumption patterns, differences in climate
and type of transportation facilities, and taxes.
For a Retired Couple
The average cost of the lower budget for a
retired couple was $3,442, the cost at the
intermediate level was $4,967; and at the
higher level, $7,689 (see table). The retired
couple is defined as a husband age 65 or over
and his wife. They are assumed to be
self-supporting and living in their own home in
an urban area; they are in reasonably good
health and able to take care of themselves. The
budgets illustrate three different levels of living
for this couple and provide for different
specified types and amounts of goods and
services. The budgets represent an estimate of
the total cost of these goods and services and
are not based on actual expenditures by
families.
The 1972 budget totals represent increases
over the 1971 budgets of 3.7 percent at the
lower level, 4.0 percent at the intermediate
level, and 3.3 percent at the higher level. For
the higher budget, price increases were partially
offset by a decline in average income tax
payments. There were no taxes in the lower
budget, and taxes were paid at the intermediate
level in only a small number of areas.
For each of the three budgets the costs in
metropolitan areas were substantially higher
than in nonmetropolitan urban areas-13, 21,
and 25 percent, respectively.
Sources: Brackett, J., Urban Family Budgets
Updated to Autumn 1972, MONTHLY LABOR
REVIEW, pp. 70-76, August 1973. U.S. Department of
Labor, Bureau of Labor Statistics, Three Budgets for a
Retired Couple, Autumn 1972, NEWS, USDL release
73-367, August 10, 1973.
SOME NEW USDA PUBLICATIONS
(Please give your ZIP code in your return address when you order these)
The following are for sale by the Superintendent of Documents, U.S. Government Printing
Office, Washington, D.C. 20402:
• QUANTITY RECIPES FOR CHILD CARE CENTERS. (Set of file cards) FNS-86. May
1973. $4.05 per set.
• FOOD AND YOUR WEIGHT. G 74. Revised July 1973. 35 cents.
• COMO COMPRAR PRODUCTOS LACTEOS (How to Buy Dairy Products.-Spanish)
G 201-S. August 1973. 25 cents.
• BUYING A NEW SEWING MACHINE. PA-1044. May 1973. 25 cents.
• USED SEWING MACHINES-A GOOD BUY. PA-1045. June 1973. 25 cents.
Single copies of the following are available free from the U.S. Department of Agriculture. Please
address your request to the office indicated.
20
From Office of Communication, Washington, D.C. 20250:
• HOME CARE OF PURCHASED FROZEN FOODS. G 69. Revised July 1973.
From Information Division, Office of Management Services, Washington, D.C. 20250:
• MEN'S ATTITUDES TOWARD COTTON AND OTHER FIBERS IN SELECTED
CLOTHING ITEMS. MRR 1012. October 1973.
From Forest Service, Southern Forest Station, T-10210 Federal Building, 701 Loyola Avenue,
New Orleans, La. 70113:
• FINDING AND KEEPING A HEALTHY HOUSE. SO-l. 1973.
FAMILY ECONOM1CS REVIEW
ORDERING PUBLICATIONS FROM THE GOVERNMENT PRINTING OFFICE
The GPO main facility in Washington, D.C.,
has a backlog of unfilled orders resulting from
an unprecedented volume of mail. One way to
speed up delivery of the publications that
you-or the people you serve-want, is to use
the GPO field bookstore nearest you when you
order. These bookstores carry almost all of the
popular titles carried by the main Washington
bookstore and offer all of the same services.
Including a self-addressed mailing label with
your order can cut 2 to 3 days off delivery
time. Remember to include full payment with
each order.
Following is a list of GPO field bookstores:
ALABAMA GEORGIA MISSOURI
Birmingham Bookstore Atlanta Bookstore Kansas City Bookstore
Room 102A Room 100 Room 135
2121 Eighth Avenue North Federal Building Federal Office Building
Birmingham, Ala. 35203 275 Peachtree Street NE. 601 East 12th Street
Atlanta, Ga. 30303 Kansas City, Mo. 64106
CALIFORNIA NEW YORK
Los Angeles Bookstore ILLINOIS New York Bookstore
Room 1015 Chicago Bookstore Room 110
Federal Office Building Room 1463-14th Floor 26 Federal Plaza
300 North Los Angeles Street Everett McKinley New York, N.Y. 10007
Los Angeles, Calif. 90012 Dirksen Bldg.
San Francisco Bookstore
219 South Dearborn Street OHIO
Room 1023
Chicago, Ill. 60604 Canton Bookstore
Federal Office Building Federal Office Building
~50 Golden Gate Avenue
201 Cleveland Avenue SW.
San Francisco, Calif. 94102 MASSACHUSETTS Canton, Ohio 44 702
Boston Bookstore
Room G25 PENNSYLVANIA
OLORADO John F. Kennedy Philadelphia Bookstore
enver Bookstore Federal Bldg. Main Lobby
Room 1421 Sundbury Street U.S. Post Office
Federal Bldg., Boston, Mass. 02203 9th and Chestnut Streets
U.S. Courthouse Philadelphia, Pa. 19107
1961 Stout Street
Denver, Colo. 80202 MICHIGAN TEXAS
Detroit Bookstore Dallas Bookstore
Pueblo Bookstore Room 229 Room 1C46
PDDC Federal Building Federal Bldg.-U.S. Courthouse
P.O. Box 713 231 W. Lafayette Blvd. 1100 Commerce Street
Pueblo, Colo. 81001 Detroit, Mich. 48226 Dallas, Tex. 75202
WINTER 1974 21
COST OF FOOD AT HOME
Cost of Food at Home, 1 Estimated for Food Plans at Three Cost L~vels,
October 1973, U.S. Average
-
Cost for 1 week Cost for 1 month
Sex-age groups2
Low-cost Moderate- Liberal Low-cost Moderate
plan cost plan plan plan cost plan
Dollars Dollars Dollars Dollars Dollars
FAMILIES
Family of 2 :
20 to 35 years 3
••• •••• 0 •• 0. 23.80 30.40 37.00 103.00 131.60
55 to 75 years3
•• 0 0 •••••• 0. 19.50 25 .50 30.20 84.30 110.30
Family of 4:
Preschool children• ......... 34.50 44.00 53.20 149.30 190.50
School children 5
••••••••. 0. 39.90 51.30 62.60 173.00 222.10
INDIVIDUALS6
Children, under 1 year ........ 4.60 5.80 6.40 19.90 25.00
1 to 3 years ....... ..... ... 5.90 7.40 8.90 25.50 32.00
3 to 6 years ............... 7.00 9.00 10.70 30.20 38.90
6 to 9 years ...... . .... .. .. 8.50 10.90 13.60 36.70 47.10
Girls, 9 to 12 years ...... . .... 9.60 12.50 14.60 41.70 54.30
12 to 15 years ......... .. .. 10.50 13.90 16.80 45.70 60.00
15 to 20 years ..... .... .... 10.80 13.80 16.30 46.80 59.60
Boys, 9 to 12 years ••••••• 0 •• 9.80 12.80 15.40 42.70 55.40
12 to 15 years ............. 11.50 15.30 18.10 49.60 66.10
15 to 20 years ...... ... . .. . . 13.30 17.00 20.40 57.70 73.60
Women, 20 to 35 years ....... 10.00 12.80 15.30 43.50 55.60
35 to 55 years .. . .......... 9.60 12.40 14.80 41.80 53.80
55 to 75 years ............. 8.10 10.70 12.60 35.20 46.30
7 5 years and over • 0 0 •• 0 0. 0. 7.40 9.40 11.50 31.90 40;90
Pregnant .... 0. 0 •••••••• 11.90 15.00 17.60 51.50 64.80
Nursing ....... .... .. ..... 13.70 17.10 19.90 59.40 74.20
Men, 20-35 years ............ 11.60 14.80 18.30 50.10 64.00
35 to 55 years ............. 10.70 13.80 16.70 46.60 59.60
-
55 to 75 years ............. 9.60 12.50 14.90 41.40 54.00
75 years and over 0 • •• •• 0 • • • 8.90 12.00 14.40 38.70 52.10
Liberal
plan
Dollars
160.40
131.50
230.70
271.10
27.80
38.40
46.50
58.70
63.30
72.60
70.80
66.60
78.30
88.50
66.50
64.20
54.80
49.90
76.30
86.30
79.30
72.30
64.70
62.40
1 These estimates were computed from quantities in food plans published in Family Economics Review, October
1964. The costs of the food plans were first estimated by using the average price per pound of each food group
paid by urban survey families at three selected income levels in 1965. These prices were adjusted to current levels
by use of Retail Food Prices by Cities released periodically by the Bureau of Labor Statistics.
2 Age groups include the persons of the first age listed up to but not including those of the second age listed.
3 Ten percent added for family size adjustment.
4 Man and woman, 20-35 years; children, 1-3 and 3-6 years.
5 Man and woman, 20-35; child, 6-9 and boy 9-12 years.
6 The costs given are for individuals in 4-person families. For individuals in other size families, the following
adjustments are suggested: 1-person-20 percent; 2-person-add 10 percent; 3-person-add 5 percent;
5-person-subtract 5 percent; 6-or-more-person-subtract 10 percent.
22 FAMILY ECONOMICS REVIEW
CONSUMER PRICES
Consumer Price Index for Urban Wage Earners and Clerical Workers
(1967 = 100)
Group Oct. 1973 I Sept. 1973 I Aug. 1973 I Oct. 1972
All items . ......... ........... .
Food ...................... .
Food at home ........ ...... .
Food away from home ....... .
Housing .................... .
Shelter ................... .
Rent ................... .
Homeownership .......... .
Fuel and utilities ........... .
Fuel oil and coal ....... ... .
Gas and electricity . . ....... .
Household furnishings and
operations ............... .
Apparel and upkeep ...... .. .. .
Men's and boys' .... . ....... .
Women's and girls' .......... .
Footwear ................. .
Transportation .............. .
Private ........ . .......... .
Public .................... .
Health and recreation ......... .
Medical care . . . ............ .
Personal care . ............. .
Reading and recreation ..... .. .
Other goods and services . ... . .
136.6
148.4
148.7
147.7
138.1
144.7
125.9
151.5
128.6
141.1
127.4
126.7
129.6
128.3
131.4
132.0
125.0
122.9
145.2
132.1
140.6
127.3
127.2
130.3
Source: U.S. Department of Labor, Bureau of Labor Statistics.
135.5
148.3
149.2
145.1
136.6
142.9
125.4
149.2
126.8
133.6
126.5
126.1
128.3
127.3
129.5
131.3
123.9
121.6
145.5
131.1
138.3
126.3
126.8
129.9
.
135.1
149.4
151.3
142.4
135.2
141.1
125.0
147.0
126.3
132.8
125.8
125.3
126.5
126.3
126.0
130.6
124.5
122.3
144.9
130.5
137.6
125.7
126.1
129.4
Index of Prices Paid by Farmers for Family Living Items
(1967 = 100)
I Item Nov. Oct. Sept. Aug. July ...
1973 1973 1973 1973 1973
All items .................... 146 142 142 141 138
Food and tobacco ........... ... --- 146 --- --
Clothing • 0 •••• 0 ••• 0 0 •• 0. 0 0 --- --- 148 --- ---
Household operation ......... --- --- 149 --- --
Household furnishings ........ --- -- 127 --- ---
Building materials, house ..... . --- -- 159 --- ---
Source : U.S. Department of Agriculture, Statistical Reporting Service.
WINTER 1974
June
1973
138
138
144
127
125
156
126.6
124.9
122.8
132.8
130.4
136.0
120.3
141.8
120.6
118.1
120.9
121.8
124.3
123.8
125.9
126.5
121.2
118.8
144.1
127.2
133.9
120.8
124.0
126.4
Nov.
1972
127
---
---
---
---
---
23
What Price Increases Mean for Families
Lucile F. Mork and Frances M. Magrabi
The Part of Income That Goes for Food
Betty Peterkin
CONTENTS
Page
3
6
The Cost of Poultry, Whole and Parts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Betty Peterkin
Rental Housing in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Lucie G. Krassa
Cost of the Lean in Ground Beef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Cynthia Cromwell
Consumer Product Safety Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Survivor's Pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Pension Provisions Affecting the Employment of Older Workers . . . . . . . . . . . . . . . . . . . . . 17
Use of Bank Credit Card and Check Credit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
BLS Budget Cost Estimates-Autumn 1972 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Ordering Publications from the Government Printing Office . . . . . . . . . . . . . . . . . . . . . . . . 21
Regular Features
Some New USDA Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Cost of Food at Home . . . . . . . . . . . . . . \ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Consumer Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
24 FAMILY ECONOMICS REVIEW