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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
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Title | Family Economics Review [1974, Number 1] |
Date | 1974 |
Contributors (group) |
Institute of Home Economics (U.S.) United States. Agricultural Research Service Consumer and Food Economics Research Division Consumer and Food Economics Institute (U.S.) United States Science and Education Administration United States. Agricultural Research Service United States Agricultural Research Service Family Economics Research Group |
Subject headings | Home economics--Accounting--Periodicals |
Type | Text |
Format | Pamphlets |
Physical description | 8 v. ; $c 27 cm. |
Publisher | Washington, D.C. : U.S. Institute of Home Economics, Agricultural Research Service, U.S. Dept. of Agriculture |
Language | en |
Contributing institution | Martha Blakeney Hodges Special Collections and University Archives, UNCG University Libraries |
Source collection | Government Documents Collection (UNCG University Libraries) |
Rights statement | http://rightsstatements.org/vocab/NoC-US/1.0/ |
Additional rights information | NO COPYRIGHT - UNITED STATES. This item has been determined to be free of copyright restrictions in the United States. The user is responsible for determining actual copyright status for any reuse of the material. |
SUDOC number | A 77.708:974/1 |
Digital publisher | The University of North Carolina at Greensboro, University Libraries, PO Box 26170, Greensboro NC 27402-6170, 336.334.5482 |
Full-text | 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 |
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