Family Economics Review [1977, Number 3]

              HIGHLIGHTS/SUMMER 1977
CLOTHING AND TEXTILE DEVELOPMENTS
BANKRUPTCY
USE OF CREDIT CARDS
FOOD DOLLARS, 1965 AND 1975
Depository
PROPERTY OF THE
LIBRM?Y
~.t.rJ ~ ~ /'j/1
University of Nor:h Car .
at Gre{:ln b olma
v s oro
ARS-NE-36
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 economic 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
Consumer and Food Economics Institute
Agricultural Research Service
U.S. Department of Agriculture
Federal Building
Hyattsville, Md. 20782
NEW DEVELOPMENTS IN CLOTHING AND TEXTILES
by Annette Polyzou
Flammability
Finishes. In April 1977, the Consumer Prod­uct
~afety Commission (CPS9) banned the pro­ductlOn
and sale of children's clothing treated
with the flame-retardant chemical TRIS
(2,3-dibromopropyl) phosphate. Recent studies
indicate that TRIS may be a potential hazard
as a human mutagen and carcinogen.
The CPSC's Bureau of Economic Analysis
(BEA) estimated that at least 40 percent of all
children's sleepwear is treated with TRIS as a
flame retardant. Most TRIS-treated sleepwear
garments are made of 100 percent polyester.
Although all-polyester lmits are treated exclu­sively
with TRIS, some other types of poly­ester
garments are treated with flame-retardant
chemicals other than TRIS. All-acetate and
-triacetate fibers in children's sleepwear, as well
as blends of acetate or triacetate with other
fibers, also contain TRIS. Garments containing
TRIS are manufactured from fibers or fabrics
topically finished with the flame-retardant
chemical. A certain amount of TRIS is there­fore
loosely contained on fibers and can be
absorbed through the skin or ingested by an
infant's sucking on a garment treated with
TRIS.
The BEA estimated that the ban of chil­dren's
clothing treated with TRIS will apply to
approximately 20 million garments, sizes 0-14,
currently in the retail channel as well as about
7 million square yards of TRIS-treated fabric
intended for children's sleepwear. Of the esti­mated
20 million TRIS-treated garments, about
2 to 4 million have already been sold to cus­tomers.
The original ban required retailers to
repurchase from consumers or replace any
TRIS-treated children's wearing apparel, worn
or unworn, that has not been washed. Several
washings may remove as much as 95 percent of
surface TRIS from a garment, thereby substan­tially
reducing the risk of illness from absorp­tion
or ingestion of the chemical. The original
ban also required manufacturers to repurchase
unwashed, TRIS-treated garments from retail­ers.
However, the ban was contested in court,
and as of May 5, 1977 the ban required that
the costs of repurchase must be distributed
among garment manufacturers, fabric or yarn
SUMMER 1977
manufacturers, and TRIS manufacturers. The
ban was still being contested as this issue of
FAMILY ECONOMICS REVIEW went to
press.
Antiblaze-191 produced by Mobile Chemical
Co. ~d Emulsion-212 produced by Apex
Chem1cal Co. are possible flame-retardant
chemical substitutes for TRIS, although, pres­ently,
neither chemical has been tested for car­cinogenicity.
A safer alternative to chemical
flame-retardant additives includes inherently
flame-retardant fabrics. Such fabrics include
(1) cordelan, sold under the brand names of
Matrix, Kohijiun, and Vinal/Vinyon; (2) mod­acrylic,
sold under the brand names of SEF
(Self-Extinguishing Fabric) and Kanechron;
and ( 3) blends of cordelan and modacrylic with
polyester or nylon.
A new flame-retardant finish for cotton­polyester
blends has recently been developed
by Agricultural Research Services's (ARS)
Southern Regional Research Center. No com­mercial
flame-retardant finish presently exists
for common cotton/polyester blends. The new
finish, Thpc-urea-PVBr, consists of the cotton
flame-retardant tetrakis (hydroxymethyl) phos­phonium
chloride reacted with urea (Thpc­urea)
and the polyester flame-retardant poly­vinyl
bromide (PVBr). Fabric treated with the
Thpc-urea-PVBr solution retains more than half
its tearing strength, has a good "hand" or feel,
and also retains its flame resistance after 50
launderings. Additional research is necessary
before the treatment can be made available for
commercial use since fabric treated with
Thpc-urea-PVBr tends to discolor slightly
under certain laundering conditions.
Standards. Current Federal flammability
standards include the CS 191-53 Standard for
the Flammability of Clothing Textiles, the
FF 3-71 Standard for the Flammability of Chil­dren's
Sleepwear, Sizes 0-6X, and the FF 5-74
1 Trade names are used in this publication solely for
the purpose of providing specific information. Mention
of a trade name does not constitute a guarantee or
warranty of the product by the U.S. Department of
Agriculture or an endorsement by the Department over
other products not mentioned.
3
Standard for the Flammability of Children's
Sleepwear, Sizes 7-14. The CS 191-53 standard
has applied to all articles of wearing apparel
since July 1954, excluding interlining fabrics,
hats, gloves, and footwear. This standard was
designed to provide minimum protection by
prohibiting the manufacture or sale of fabrics
and articles of wearing apparel that are highly
flammable. The FF 3-71 and FF 5-74 standards
became effective in July 1972 and May 1975
respectively. Both standards apply to any arti:
cle in the specified sizes worn primarily for
sleeping, such as nightgowns, pajamas, and
robes. Excluded from the standards are diapers
and underwear.
The CPCS is considering the feasibility of
updating the CS 191-53 standard to provide
increased protection from bum injuries related
to all apparel items except shoes. A proposed
General Wearing Apparel Standard would pro­vide
a new test method, the mushroom test
designed to measure the ease of ignition of fab:
ric and the rate of heat transferred from burn­ing
fabric to the body. The mushroom test may
be a better measure of potential bum injury
sustained in real-life situations than the self­extinguishing,
vertical test method, now in
effect for the specific end-use standards, which
measures the rate of flame spread.
The proposed apparel standard would cat­egorize
fabrics into four classes according to
ease of ignition and rate of heat transfer and
would categorize garments into three classes
according to specific measurements.
Class 1 fabrics would include those which
ignite the least easily and/or bum slowly and at
a low temperature. Class 4 would include those
fabrics which ignite the easiest and bum the
fastest and at the highest temperature. Class 4
fabrics would be prohibited from use in wear­ing
apparel except in end-uses approved by the
CPCS.
Class 1 garments would include those which
fit the body loosely, flare away from the body,
and cover most of the body, such as tent
dresses and nightgowns. Class 3 garments
would include tight-fitting garments such as
underwear and swimwear.
A balance of safety would be achieved by
coordinating garment classification with fabric
classification. As an example, garments in
class 1 would be required to be made only
from the fabrics in class 1. The remaining
4
classes of garments would be assigned to specif­ic
classes of fabrics according to designated gar­ment
measurements.
Care Labeling
A trade regulation rule pertaining to the care
labeling of textile wearing apparel was enacted
by the Federal Trade Commission (FTC) in
July of 1972. The rule was designed to help
consumers avoid damage to items through
improper care and to inform consumers of the
care necessary to insure the utility and appear­ance
of textile wearing apparel. Revisions in
the present Care Labeling Rule were proposed
by the FTC in January 1976 in order to give
consumers clearer and more complete care
instructions. The proposed new Care Labeling
Rule retains and clarifies certain aspects and
expands other provisions of the present rule.
The proposed, revised rule specifies that uni­form
terminology must be employed in care
instructions as adopted by the FTC from the
American Society for Testing and Materials.
In general, washing instructions must dis­close
the method of washing and drying and a
description of temperatures, the use of bleach
and specific type of bleach in instances where
not all commercial bleaches can be used, and
the use of an iron and ironing temperatures.
Drycleaning instructions must disclose the type
of solvent to be used in instances where not all
commercial solvents can be used. Both washing
and drycleaning methods must be disclosed as
alternative care procedures for garments other
than underwear and finished household items
which will not be damaged by either method.
The proposed, revised Care Labeling Rule
expands the present rule's coverage to include
suede and leather apparel, household furnish­ings,
yam, carpets or rugs, and intermediate
components.
Fibers and Processes
Fibers. The current fashion trend toward a
natural look in clothing has placed great
emphasis on the natural fibers of cotton and
wool. Presently, cotton and wool prices are
somewhat above competitive manmade fiber
prices because of the tight supplies of these
natural fibers in relation to demand. Acrylic
~im~ates the natural-fiber look of wool. Acryl­IC
fibers do not felt and are stronger, easier to
FAMILY ECONOMICS REVIEW
care for, softer, and provide more warmth for
less weight than wool fibers. Acrylic has been
in use since 1950 in apparel (mainly sweaters),
blankets, carpets, fleece and furlike fabrics, and
home furnishings. In recent months, acrylic has
accounted for less than 9.0 percent of total
U.S. shipments of manmade fibers; however,
the introduction of two new fibers may
increase the use of acrylic.·
Fina, a 1.2-denier fiber introduced by Mon­santo
Textiles in November 1976, is presently
the finest-denier acrylic produced in the United
States. The development of such a fine-denier
acrylic will enable acrylics to become an all­seasons
product by expanding its market from
mainly fall apparel, carpets, and home furnish­ings
to lighter weight goods such as single,
double, and warp knits and lightweight wovens,
including sheers.
A new acrylic staple, code name ATF-1017,
has recently been developed by Bayer A. G. in
West Germany. The new acrylic is 25 percent
lighter in weight than standard acrylics, absorbs
water rapidly and dries quickly. ATF-1017
fibers can absorb approximately 30 percent by
weight of water as compared with 40 percent
for cotton and wool. In contrast, synthetic
fibers have a much lower absorption capacity-
5 percent for acrylics and polyester and 10 per­cent
for nylon. The new acrylic's drying prop­erties,
tested at 12 minutes, were slightly slow­er
than the 9 minutes recorded for standard
acrylics but much faster than the 30 minutes
recorded for cotton and wool. In addition,
ATF-1017 fibers absorb more moisture than
natural or synthetic fibers before giving the
sensation of dampness. Such qualities lend the
new acrylic fiber to end uses in such areas as
clothing and furnishing fabrics where perspira­tion
absorbency is desirable.
Processes. The demand for leather, used
mainly in outerwear, has also been increased by
the recent trend toward the natural look in
clothing. PolyRetan, a new experimental pro­cess
for producing leather that is drycleanable
by conventional methods and in coin-operated
machines, has recently been developed by
chemists at Agricultural Research Service's
(ARS) Eastern Regional Research Center. Graft
polymerization-a treatment in which leather is
chemically united with a synthetic polymer­and
dyeing, and fat liquoring-a treatment
which lubricates and softens leather-are com-
SUMMER 1977
bined into one step. Also, the synthetic poly­mer,
the dye, and the fat liquor are united with
leather at the molecular level rather than sim­ply
coated, mixed, or impregnated, resulting in
a leather which resists drycleaning solvents as
well as mildew and has excellent strength and
improved stretchability. Such properties lend
the new leather to end-uses in clothing and
upholstery.
ARS's Stored-Product Insects Research and
Development Laboratory at Savannah, Ga., has
recently discovered that an insecticide, consist­ing
of pyrethrins and piperonyl butoxide, can
be used effectively as a mothproofing agent for
woolens. Tests conducted on woolens sprayed
with the insecticide revealed that the wool
cloth was protected from larva of the webbing
clothes moth and the black carpet beetle for a
test period of 6 months. The insecticide has a
low toxicity level to humans and should be
available for public use in the near future.
References
Blum, A., and Ames, B. N. 1977. Flame-retard­ant
additives as possible cancer hazards.
Science 195: 17-23.
Chemical and Engineering News. Bayer
develops low-absorbent acrylic fiber.
Dec. 6, 1976 issue, p. 22.
Consumer Newsweekly. 1977. War against can­cer-
causing chemicals escalates. VI (23):
1-2.
Consumer Product Safety Commission. 1975.
Flammable Fabrics Act, reVIsiOn and
recodification of regulations. Federal Regis­ter
40 FR 250, 59884-59957.
---1977. Children's wearing apparel con­taining
TRIS; interpretation as banned
hazardous substance. Federal Register
42 FR 68, 18850-18854.
---1977. TRIS and fabric, yarn, or fiber
containing TRIS; additional interpretations
as banned hazardous substances. Federal
Register 42 FR 87, 22878.
Reichman, C. 1977. Tris question steers quest
for flame retardants into different direc­tion.
Knitting Times 46 (5): 8-9.
Textile Organon. 1977. Selected U.S. monthly
textile fiber data (table). 48 (4): 56.
U.S. Department of Agriculture. 1976. Easy­care
leather made in new USDA process.
News, October 19 issue, pp. 2995-76.
5
---Agricultural Research Service. 1975.
Flame retardant coming for cotton-poly­ester
blends. Agricultural Research 23 (1):
14.
---Agricultural Research Service. 1976.
Mothproofing woolens. Agricultural
Research 24 (7): 16.
---Agricultural Research Service. 1977.
Drycleaning leather. Agricultural Research
25 (9): 12-13.
---Economic Research Service. 1977.
Cotton and Wool Situation, CSW-19.
Walsky, L. S. 1977. Flammable fabric legisla­tion:
An update. Knitting Times 46 (5):
13-14.
Selected articles from the Daily News Record,
The New York Times, The Wall Street
Journal, and The Washington Post.
BANKRUPTCY AND ITS ALTERNATIVES
by Connie M. Hoerman
Consumer installment debt per capita
increased 55 percent between 1971 and 1976.
For fiscal years 1971 and 1976 the number of
nonbusiness bankruptcy filings increased from
182,249 in 1971 to 211,348 in 1976. Bank­ruptcies
are one indication that families and
individuals are experiencing financial difficul­ties.
These difficulties may stem from inflation,
illness, unemployment, changes in family com­position,
or poor money management. Families
who are having difficulties have several
options: They may seek to solve their problems
through financial counseling or a Wage Earner's
Plan, or they may turn to straight bankruptcy
for relief.
Financial Counseling
The major purpose of a financial counselor is
to help family money managers obtain a realis­tic
picture of their financial situation and to
suggest ways to deal with problem areas before
bankruptcy becomes the only alternative. Non­profit
consumer credit counseling services can
be found in many major cities; and financial
counseling is also offered by many local social
service agencies, banks, and credit unions. Debt
adjusters or debt poolers can be mistaken for
financial counselors, but they are actually in
business to make a profit from other people's
debt. Their policies and practices can lead to
abuse, and their services have been outlawed in
26 States and regulated in 15. Debt adjusters or
debt poolers will always require that the con-
6
sumer pay money to them for the repayment
of debts, whereas a financial counseling service
may or may not handle money for the consum­er.
By asking to see a detailed accounting of
how his money will be used to pay creditors
and of the amount of money the company will
keep for its services and expenses, the consum­er
will have some idea of the company's
method of operation.
Families who are being threatened by repos­session
of the family car, foreclosure of the
mortgage on the house, garnishment of wages,
or endless calls and letters from creditors may
wish to consider filing for relief under Wage
Earner's plans or straight bankruptcy.
Wage Earner's Plans
Chapter XIII of the Bankruptcy Act, also
known as Wage Earner's Plans, was passed by
Congress in 1938 as an amendment to the
Bankruptcy Act. It allows the debtor to pay
off his debts from his regular paycheck while
being protected by the bankruptcy court from
lawsuits, garnishment of wages or other assets,
repossession or interference with his property,
or harrassment. Within the past two decades,
filings under the Wage Earner's Plans have
amounted to about 17 percent of all nonbusi­ness
bankruptcy filings. In fiscal year 197 6
there were over 33,000 filings.
Only wage earners or other persons regularly
employed are eligible to file for relief. Also, the
debtor's finances must be at a level such that
FAMILY ECONOMICS REVIEW
debts can be paid off within a reasonable
amount of time. In general, the debtor's essen­tial
living expenses (food, clothing, transporta­tion,
medical, and so forth) must not exceed
approximately 75 percent of his take-home pay
per month, so that about 25 percent can be
turned over to a trustee appointed by the court
for the repayment of debts. If the debtor can
pay off his debts within approximately 3 years,
the plan is generally considered feasible.
A Wage Earner's Plan is an answer for the
family who has gotten behind in its credit pay­ments
and who merely needs a little time and
freedom from pressure by creditors to get back
on its feet. If most of a debtor's obligations are
for secured loans rather than unsecured loans,
he will probably fare much better under the
Wage Earner's Plan, if he can qualify, than
under straight bankruptcy. Secured loans are
generally for such items as vehicles, furniture,
or appliances on which the creditor holds a
conditional sales contract, chattel mortgage, or
security agreement. A debtor could lose these
secured items after a straight bankruptcy:
whereas, he can keep them after successfully
paying off the debt under the Wage Earner's
Plan.
The cost of the Wage Earner's Plan includes
court costs, trustee's fees and costs, and attor­ney's
fees. Court costs include a $30 filing fee
and 1 percent of all monies paid to the trustee.
The court establishes the trustee's fee, which
may not exceed 5 percent of all monies paid to
him by the debtor; and the trustee is granted
an allowance for his costs, also not to exceed
5 percent. The trustee is paid from the money
available to pay creditors.
For persons using an attorney's services, the
fee runs at approximately $300 and can be
paid in installments along with the other credi­tors.
"How-to" books are available for persons
wishing to file their own Wage Earner's Plan,
and the necessary forms can be purchased from
some stationary stores that stock legal forms.
However, many debtors prefer to consult a law­yer,
since accuracy in completing the forms is
very important and since a lawyer may know
of provisions that could save the debtor
money. Local Legal Aid Societies may be of
help to low-income debtors, and some experi­enced
financial counselors may be able to
handle simple Wage Earner or bankruptcy
cases.
SUMMER 1977
Approximately half of the people who file
under the Wage Earner Plans do not complete
their plans as originally proposed. Some per­sons
cannot tolerate the restrictions imposed
by the Wage Earner's Plan, such as not being
able to incur new debts without the permission
of the court and turning over a large part of
their check each payday for the trustee to dis­tribute.
Bankruptcy
Bankruptcy is available to burdened debtors
through long-established Federal Laws and is
provided for by the U.S. Constitution (Article I,
Section 8, Clause 4). In fiscal year 1976 over
200,000 nonbusiness bankruptcies were filed in
the United States. Most bankruptcies are volun­tary-
only about 1,000 involuntary bankrupti­cies
are filed each year.
In going bankrupt a debtor turns over all his
nonexempt property to the court so that it can
be sold and the proceeds distributed among his
creditors. Often there is little money to distrib­ute,
since a debtor's most necessary and major
possessions are usually exempt-the equity in
his home, the car he drives to work, the tools
of his trade, home furnishings, clothing, life
insurance policies, and some savings. State laws
determine exactly which items are exempt.
Debts that cannot be discharged in bankruptcy
include certain taxes and wages owed, money
or property obtained by fraud, and alimony or
child support.
A $50 filing fee must be paid before a bank­rupt
can receive a discharge. Attorney's fees in
a bankruptcy case usually run from $200 to
$500 and are often required to be paid in
advance. As with the Wage Earner's Plan, the
debtor may be able to file the petition and
prepare the necessary forms himself, thus sav­ing
the cost of an attorney.
Even if a secured debt is discharged through
bankruptcy, the debtor may still lose the secur­ed
item. The mortgage on his house can be
foreclosed and his car and furniture repossess­ed,
if he is still making payments on them,
unless the bankrupt works out repayment
arrangements with the creditors holding his
secured loans. Straight bankruptcy can help
persons whose debt is mostly unsecured, partic­ularly
people with high medical and hospital
bills.
7
After bankruptcy a debtor may find that his
credit rating is much better than it was before
bankruptcy, even though his record of bank­ruptcy
will follow him for years. Creditors are
often happy to lend to a recent bankrupt since
they know he may have extra cash on hand
now that he has fewer debts and they know he
cannot go bankrupt for another 6 years. For
these reasons, a recent bankrupt must be par­ticularly
cautious about taking on any new
debt. If he gets into debt trouble within
6 years, the Wage Earner's Plan is still available
to him and can be used as often as necessary.
Persons desiring more information on bank­ruptcy
and the Wage Earner's Plan should con­sult
a lawyer, Legal Aid Society, or credit
counseling service. Fact sheets on these two
subjects can be obtained by sending a request
to the Administrative Office of the United
States Courts, Bankruptcy Division, Supreme
Court Building, Washington, D.C. 20544.
References
Administrative Office of the United States
Courts, Bankruptcy Division. Bankruptcy
filings by class. (Fact sheet, 2 pp.)
---Some general information concerning
bankruptcy. (Fact sheet, 7 pp.)
---Some general information concerning
the Wage Earner's Plan under Chapter XII
of the Bankruptcy Act. (Fact sheet, 6 pp.)
Board of Governors of the Federal Reserve
System. 1974. Installment credit (table).
Federal Reserve Bulletin 60 (2) A54.
---1977. Consumer installment credit
(table). Federal Reserve Bulletin 63 (2):
A42.
Changing Times. 1975. What happens if you go
bankrupt. 29 (6): 39-42.
U.S. Department of Labor, Bureau of Labor
Standards. 1967. [Currently the Bureau of
Employment Standards.] Summary of
State laws prohibiting or regulating the
business of debt pooling. (Fact sheet,
15 pp.) Addendum 1969.
THE MANAGEMENT AND USE OF CREDIT CARDS
by Connie M. Hoerman
Over 300 million credit cards are in use in
the United States today ( 4). 1 They are offered
by banks, credit card companies, department
stores, oil companies, airlines, and other mer­chants.
Most can be used either as 30-day
accounts or as revolving credit.
Bank credit cards are the fastest growing
type of credit card today. Bank credit cards
offer flexibility to the consumer for charging a
wide variety of merchandise and services from
many businesses on a single card. Many mer­chants
welcome bank credit cards because the
store is immediately reimbursed for the charg­ed
purchases by the issuing bank. Two years
ago only 10 of the largest 100 department
1 Numbers in parentheses refer to References at the
end of this article.
8
stores accepted bank credit cards, whereas 23
did in the last part of 1976 (2). Merchants
must pay the card issuer a certain percentage of
purchases charged on bank cards as a service
fee, and some department stores not accepting
bank credit cards may feel that they can profit
more by issuing their own store credit card.
At the end of 1976, over $11 billion was
outstanding on bank credit card accounts, and
over $19 billion was outstanding on consumer
installment credit owed to retailers, of which
an estimated three-fourths was attributable to
credit cards (1 ). These amounts do not include
noninstallment credit outstanding on 30-day
charge accounts.
Approximately 80 percent of married
Americans in a nationwide survey conducted in .
197 3 said they had some type of credit cards
(7). Over two-thirds of those surveyed felt
FAMILY ECONOMICS REVIEW
credit cards made it too easy to buy items on
impulse. The persons surveyed also indicated
that credit cards were "useful in emergencies,"
"good when traveling," "quick credit indentifi­cation,"
and "safer than carrying cash"; sug­gesting
that credit cards are thought of as a
convenience rather than as a form of debt.
Costs of Credit Card Accounts
By offering credit card services to its
customers, a retail establishment increases its
operating expenses and hopes to cover these
expenses through finance charges received from
the cardholders. Since net profit yields on cred­it
card accounts are often low or nonexistent,
some economists fear the additional costs of
offering credit cards are borne by all custom­ers,
includine: those who always pay cash. One
right of cash customers was maintained by the
Federal Fair Credit Billing Act, which became
effective in 1975 and included a provision that
a bank card issuer could not restrict a seller
from offering discounts for cash (5). Some
credit card companies, such as American
Express, Diners Club, and Carte Blanche,
charge a yearly membership fee to help defray
their expenses, and one New York bank
charges customers 50 cents per month when
they pay their bill in full (3). On the other
hand, a few credit card services now offer a 1
or 2 percent rebate on all purchases charged
regardless of whether the customer pays his
account in full or in installments ( 6).
Most credit card accounts not paid in full by
the end of the billing period will incur a
finance charge. The Federal Truth in Lending
laws require that the consumer's monthly bill­ing
statement include the dollar finance charge
and the annual percentage rate. State laws
determine maximum rates of interest. The
usual rates charged on credit card accounts are
18 percent on amounts under $500 and 12 per­cent
on amounts over $500, although certain
States require variations to these amounts.
The annual percentage rate is only one indi­cation
of cost. Another determinant of how
much a credit card account will cost is the
method by which the finance charge is comput­ed.
Although many methods exist, the two
methods used most frequently are (1) previous
balance less payments and credits (used mostly
by oil companies and small department stores)
SUMMER 1977
and (2) average daily balance (used mostly by
bank credit card companies and major depart­ment
stores). These two methods of computing
finance charges are compared below using the
following hypothetical record of purchases and
payments. A monthly interest rate of 1.5 per­cent
(18 percent per year) is assumed.
Date Payments Purchases Balance
June 1 $200
10 $100 100
20 $200 300
30 300
Previous balance less payments and credits.
With this method the $100 payment is sub­tracted
from the $200 balance of the previous
month. The unpaid balance of $100 is multi­plied
by the monthly rate of 1.5 percent, which
results in a finance charge of $1.50.
Average daily balance. The computation of
the finance charge under the average daily
balance method is somewhat more complicated
since every transaction and every day in the
period can be taken into account. The usual
method of computing the average daily balance
is to sum the account balance at the end of
each day in the period, and divide by the num­ber
of days in the period. There is, however,
considerable variation depending on whether
new purchases charged to the account during
the current billing period are included in the
daily balances.
If current purchases are included, the hypo­thetical
account shown above has a balance of
$200 for the first 10 days, $100 for the second
10 days, and $300 for the third 10 days. The
sum of the daily balances is $6,000 (200 X 10
+ 100 X 10 + 300 X 10}, which when divided
by the 30 days in the period results in an
average daily balance of $200. This balance
($200) multiplied by the monthly rate (1.5
percent) results in a finance charge of $3.00.
If current purchases are excluded in comput­ing
the average daily balance, this account has a
balance of $200 for 10 days and $100 for 20
days, resulting in an average balance of
$133.33 ($4,000 + 30 days). The finance
charge would be $133.33 times 1.5 percent or
$2.00.
9
In these examples, the finance charges com­puted
under the average daily balance methods
are greater than those computed under the pre­vious
balance method, and this would be true
in most cases. The average daily balance may
not be as advantageous to the consumer as
some methods, but it is the most fair to both
creditor and debtor, since the consumer pays
for the exact amount of the credit he receives.
Managing Credit Card Accounts
By taking advantage of the features of his
credit cards, a consumer can minimize the cost
of his accounts and maximize his spending
power. A consumer who always just makes the
minimum payment required and who keeps a
constantly high credit balance may find the
accumulated finance charges on his account to
be almost as costly as his purchases. Managing
an account in such a manner would result in
the account never being fully paid up.
By watching an account's closing date, a
consumer can extend the time between a pur­chase
and the payment. Purchases made before
the closing date will show up on the next bill,
but purchases made just after the closing date
won't show up until the second bill follows.
Generally consumers have 25 to 30 days from
the closing date to pay their bills. Persons who
wait until almost the last day to pay get an
additional "free ride," but if time is not allow­ed
for postal handling and company processing,
the delay may cost more than the possible sav­ings.
A consumer who expects to pay a finance
charge computed under an average daily
balance method will pay less by minimizing the
number of days his purchases are on the
account.
Paying bills in person instead of by mail can
save delays and postage, but not if additional
money is spent in travel to the bank or on
additional impulse items when visiting the
store. Lumping purchases onto one card rather
than spreading them among many cards can
save money in more than just postage and mini­mum
finance charges. Most credit cards have a
breakpoint such as $500 at which the interest
rate becomes lower. If a consumer were to
charge $800 in one month and have the entire
amount on one card, he would be charged a
lower rate of interest on the amount over $500
than if he had spread $800 worth of purchases
on several cards.
10
Most credit cardholders have more than one
card and could use a system to make sure all
bills get paid on time. A common method to
handle bill paying is: Save credit slips received
at the time of purchase to compare with the
monthly billing statement and check for errors;
place bills to be paid in a spot where they will
not be forgotten and mark their due date on a
calendar; specify a certain day to pay bills,
such as the day a bill is received or the day a
paycheck arrives; and save paid bills for future
reference.
Many sources suggest that a consumer have a
list of all his credit card account numbers and
company addresses and telephone numbers in
case his cards are lost or stolen. Most com­panies
inform their cardholders what to do
when their card is missing, and some provide
postage-paid cards or toll-free telephone num­bers
for this purpose. Cardholders may be
liable for up to $50 in unauthorized charg_es
made on their card unless they notify the com­pany
immediately when their card has been
lost or stolen.
For a consumer who has many credit cards,
the loss of a wallet or purse could mean much
time spent in notifying all the credit card
issuers affected. For this reason, credit card ser­vices
now exist so that all companies would be
notified of lost credit cards through just one
phone call from the consumer to the credit
card service. For a fee, such services not only
handle notification for and replacement of lost
or stolen cards for their members but also can
offer emergency cash and airline tickets for
stranded travellers, change-of-address services,
and fraud warning labels to be affixed to credit
cards as a deterrent against unauthorized per­sons
using the cards.
Credit card companies are required to notify
customers as to what action to take in case of
billing errors. Procedures to handle billing mis­takes
are outlined in the Federal Fair Credit
Billing Act so that disputes may be settled
promptly and fairly. Deadlines and other speci­fications
pertaining to errors can vary from
State to State.
Cash Loans on Credit Card Accounts
A recent innovation is the use of credit cards
to obtain cash in the form of a loan or advance.
Cardholders present their cards at designated
FAMILY ECONOMICS REVIEW
locations, such as banks or airports, and charge
the cash they receive much the same as they
would charge merchandise in a department
store. The credit conditions for a cash advance
are generally different from those for purchas­ing
merchandise, usually with the finance
charges beginning the day the cash advance is.
made. Also, any payments the customer makes
to his account are first applied to cash advances
and finance charges and then to charges for
merchandise or services. On some accounts a
processing fee is charged for each cash advance,
and some companies require that cash be loan­ed
only in certain increments, such as $100.
Conditions for both cash and sales charges will
vary among credit card companies and among
issuers of the same credit card.
References
(1) Board of Governors of the Federal Reserve
System. 1977. Consumer installment
credit (table). Federal Reserve Bulletin
63 (2): A42.
(2) Business Week. 1976. Bank cards push for
the big stores. 2451: 107-108.
(3) Consumer Reports. 1976. Citibank finds a
penny it forgot to pinch. 41 (7): 375.
( 4) Consumers Research Magazine. 1976. Buy­ing
on credit. 59: 41.
(5) Family Economics Review. Fair Credit
Billing Act. Fall1975 issue, p. 36.
(6) Forbes. 1976. The new zig and zag in
credit card marketing. 117: 50.
(7) Hawes, D. K., Blackwell, R. D., and Talar­zyk,
W. W. 1976-77. Attitudes toward
use of credit cards: Do men and women
differ? Baylor Business Studies 110:
57-71. (Waco, Texas: Baylor University.)
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:
• YOU CAN PROTECT YOUR HOME FROM TERMITES. (Stock No. 001-001-00420-1)
1976. 60 cents.
• YOUR WOOD CAN LAST FOR CENTURIES. (Stock No. 001-001-00419-7) 1976. $1.00.
Single copies of the following are available free from the U.S. Department of Agriculture. Please
address your request to the office indicated.
From Office of Communication, Washington, D.C. 20250:
• FREEZING COMBINATION MAIN DISHES. G 40. Revised June 1976.
• SELECTING AND GROWING HOUSE PLANTS. G 82. Reprinted September 1976.
• SHRUBS, VINES, AND TREES: FOR SUMMER COLOR. G 181. Revised March 1977.
• HOW TO USE USDA GRADES IN BUYING FOOD. G 196. Revised March 1977.
• DRYING FOODS AT HOME. G 217. January 1977.
• AVERAGE WEIGHT OF A MEASURED CUP OF VARIOUS FOODS. HERR 41. March
1977.
From Food and Nutrition Service, Washington, D.C. 20250:
• PUBLICATIONS OF THE FOOD AND NUTRITION SERVICE. FNS 11. Revised Febru­ary
1977.
• FOOD BUYING GUIDE FOR CHILD CARE CENTERS. FNS 108. Revised February
1977.
SUMMER 1977 11
HOW FOOD DOLLARS WERE DIVIDED, 1965 AND 1975
by Cynthia OomweY and Richard Kerr
There appear to be many reasons why
consumers may have altered their food pur­chasing
patterns over the past 10 years:
Increases in food prices, new products on the
market, larger number of families receiving
food stamps and other food assistance, and
shifts in the makeup of the population. A
study of two annual consumer expenditure sur­veys
conducted by SUPERMARKETING1
magazine indicates, however, that Americans
allocated their food dollars among major cat­egories
of food in much the same way in 1975
as they did in 1965. This was true whether the
share of the food market was compared when
foods were categorized by the basic four food
groups or by degree of processing of the food.
In each survey, consumption-whether at
farm level or by institutions, restaurants,
government, or households-was included in
terms of retail store valuation. Excluded were
those portions of a commodity which were
used commercially in making some other prod­ucts,
such as the portion of flour output which
was used in baked goods reported. Also exclud­ed
were infant formula and alcoholic beverages.
Basic Four Food Groups
In the first comparison all food, whether
fresh, processed, or ready-to-eat, was sorted
into the basic four food groups and the "other
foods" group as specified in The Daily Food
Guide, USDA Leaflet 424 (table 1). Foods that
did not fall clearly into one of these groups
were included in either the mixtures or acces­sories
group. In both 1965 and 1975 consum­ers
allocated the largest share of their food
money for meat and alternates-more than
twice as much as the next highest group. They
spent $37-$38 of every $100 for meat, poultry,
eggs, dry beans and peas, and nuts; $17-$18 for
vegetables and fruit; $12-$13 for milk and
1 Formerly called Food Topics. Basic data from 19th
Annual Study : What Consumers Spend, Food Topics,
September 1966; and 29th Annual Consumer Expendi­tures
Study, Supermarketing, September 1976.
12
dairy products, such as cheese and ice cream;
and $6-$7 for flour and those cereals and
breads believed to be whole grain, enriched, or
fortified. A little over $12 went for "other
foods"--"Tefined and unenriched bakery prod­ucts,
butter, margarine, oils, sugar, sirups, and
molasses, for example. About $7-$8 per $100
was spent on accessories such as coffee, tea,
soft drinks, seasonings, and the like.
Foods bought as commercially prepared
mixtures (that contained foods from two or
more of the Daily Food Guide groups) claimed
less than $5 per $100 in 1965 and less than $6
in 1975. This group includes frozen dinners,
meat and poultry pies, breaded fish sticks and
shrimp, and frozen, canned, and dried soups. It
contains other mixtures, such as jellies and
jams and fruit drinks that have fruit and sugar
in them, and pudding mixes and breakfast
drinks that contain milk, sugar, and other
foods. This mixtures group does not include
mixtures that are identified in the guide as a
part of a group, such as ice cream in the milk
group and ready-to-eat cereals that contain
sugar in the bread-cereal group. The continued
relative unimportance of mixtures that cut
across food groups offsets to some extent the
concern of some people that the use of ready­prepared
and partly prepared mixtures makes
the Daily Food Guide inappropriate as a tool
for food selection.
Degree of Processing
Because supermarkets now display many
more processed and "convenience" foods than
several years ago, the assumption is sometimes
made that the U.S. diet is fast approaching a
diet of highly processed foods. However, when
the share of food dollars was compared for
foods organized by four degree-of-processing
categories, plus an accessories group, minimal
change was found between 1965 and 1975
(table 2). There was almost no change in the
amount allotted to fresh, unprocessed foods;
cured, frozen, canned, dried, or refined foods
with little change; mixes and mixtures, ready­to-
eat or ready-to-heat; and accessories. One
category, modified foods with minor ingredient
FAMILY ECONOMICS REVIEW
added, showed an 11 percent increase in the
share of food dollars allotted between 1965
and 197 5-mostly because of increases for pro­cess
cheese and ready-to-eat cereal.
Fresh, unprocessed foods continue to be
highly popular. They accounted for 46 percent
of the food dollars spent in 1961? and again in
1975. This was more thap twice as much as any
other of the degree-of-processing categories.
The Department's Economic Research Ser­vice
also conducted a study using data from
SUPERMARKETING magazine. They found
similarity in 1952, 1971, and 1975 in the share
of food dollars going to processed versus
unprocessed foods. 2
2 USDA, Economic Research Service, National Food
Situation, NFS-159, p. 34, Mar. 1977.
Table 1. Share of food dollars by
Individual Food Items
The small change between 1965 and 1975 in
the way consumers divided their food money
among categories of foods masks changes for
some individual food items. Some took a sub­stantially
greater or lesser share of food dollars
in 1975 than they did in 1965 (table 3). For
example, the shares going to presweetened
cocoa and to process cheese increased more
than 100 percent; oils and sugar, about 60 per­cent;
and margarine and ready-to-eat cereal,
40-45 percent. The shares for frozen plate din­ners,
entrees, and soups, and fresh vegetables
(excluding potatoes) each increased about
20-25 percent. However, less than $1 for every
$100 worth of food was allocated for each of
these foods and, therefore, the substantial per­centage
increases for these individual foods had
only a small impact on their group or category.
Daily Food Guide groups, 1975 and 1965
Share of each $100 Change from
Food group 1 worth of food 2 1965 to 1975
1975 1965
Dollars Percent
Total 100.00 100.00
Milk 12.09 12.99 - 7
Meat and alternates 37.29 37.65 - 1
Vegetable-fruit 17.80 17.32 + 3
Bread-cereal 6. 77 7.09 - 5
Other foods 12.62 12.47 + 1
Mixtures from 2 or
more groups 3 5.74 4.84 +19
Accessories 4 7.69 7.64 + 1
lFoods are sorted by food group as specified in The Daily Food Guide, USDA Leaflet 424, insofar
as possible.
2All consumption--whether at farm level or by institutions, restaurants, government, or house­holds--
is given in terms of retail store valuation. Excluded are_ those portions of a comm~dity
used commercially in making some other products, such as the port1on of flour output used 1n
baked goods reported as consumed. Also excluded are infant fo~ulas ~nd al7oholic beverages.
3Frozen prepared foods such as dinners and meat and poultry p1es; f1sh st7cks and breaded .
shrimp; frozen, canned, and dried soups; jellies, jams, and preserves; pu~d1ng_and custard m1xes;
toppings; sauces and gravy mixes; dry potato mixes; canned ~n~ frozen fru1t dr1nks; prepared food
drinks breakfast drinks; other new food products not class1f1ed.
4coffee, tea, cocoa; soft drinks; leavening agents, flavorings, condiments.
Source: Food Topias, 19th Annual Study: What Consumers Spend, September 1966 issue; and Super­marketing
(formerly called Food Topias), 29th Annual Consumer Expenditures Study, September 1976
issue.
SUMMER 1977 13
Table 2. Share of food dollars by degree of processing, 1975 and 1965
Processing 1
Share of each $100
worth of food 2
1975 1965
Dollars
Change from
1965 to 1975
Peraent
Total ... . ......... .. ....... . .. . .. ... . . .... . 100.00 100. 00
Fresh, unprocessed ... . .. . .. .. ...... . .. . . .
(Milk, cream; meat , poult ry, seafood,
nuts, eggs; vegetables and frui t )
Cured, frozen, canned, dried, or refined
with little change . . ... ... .. . ... ... .... .
(Evaporated and dry milk , natural,
cottage, and pot cheese; cured pork
and fish, bacon, frozen and canned
meat, poultry, seafood--not breaded,
canned and dry beans and peas; frozen,
canned, and dry vegetables; frozen and
dried fruits; flour, meal , hot cereals,
rice, macaroni products, infant
cereals; fats , oils, sugar, sirup,
molasses)
Modified, with sugar or other minor
ingredient added . . . . .... . ..... ... . . .. .. .
(Condensed milk, process cheese;
frankfurters, cold cuts, other
sausage products, peanut butter;
canned fruit, frozen fries and other
potato products, olives, pickles,
relish; cereals, ready-to-eat)
Mixes and mixtures, ready- to-eat or
ready-to-heat .. . .... . . .. . . . .. .. . .. .. . . . .
(Ice cream, ready whipped topping;
frozen dinners, meat and poultry pies,
soups, etc., baby meat and combinations,
fish sticks, and breaded shrimp; i nstant
potato mixes, chips; canned soups; bread
and rolls, crackers, biscuits, cookies,
tidbits, frozen and ready-to-eat sweet
bakery goods, prepared cake and other
mixes; salad dressings, jams, jellies ,
preserves, candy, gelatin desserts
and puddings, frosting mixes, soup
mixes, toppings, gravy mixes, fruit
drinks, breakfast drinks; all other
new products not classified)
Accessories .. . ..... . . . .. .. . . . .. . . . . ... . . .
(Coffee, tea, cocoa; soft drinks;
leavening agents, flavorings,
condiments)
45 . 75 46. 35 - 1
17 . 31 17.43 - 1
9.27 8.35 +11
19.98 20 . 23 - 1
7.69 7.64 + 1
1Foods were arbitrarily classified into 4 categories by degree of processing.
2All consumption--whether at farm level or by institutions, restaurants, government, or house­holds--
is given in terms of retail store valuation. Excluded are those portions of a commodity
used commercially in making some other products, such as the portion of flour output used in baked
goods reported as consumed. Also excluded are infant formulas and alcoholic beverages.
Source: Food Topiaa, 19th Annual Study: What Consumers Spend, September 1966 issue; and Super­marketing
(formerly called Food Topias), 29th Annual Consumer Expenditures Study, September 1976
issue.
14 FAMILY ECONOMICS REVIEW
Table 3. Share of food dollars in 1975, and percent change from 1965 for
selected foods
Food
Presweetened cocoa ................ .
Process cheese .................... .
Oils ...... ........................ .
Sugar ............................. .
Margarine ......................... .
Cereal, ready-to-eat .............. .
Natural cheese ............... . .... .
Dry milk ............. .... ......... .
Salad dressings ................... .
Plate dinners, entrees, soups,
frozen ........................... .
Rice .............................. .
Juices, frozen .................... .
Potato chips ...................... .
Fresh vegetables, not potatoes .... .
Condensed milk .................... .
Lard .............................. .
Cream, fresh ...................... .
Butter ............................ .
Evaporated milk ................... .
Cornmeal, hominy ....... . .......... .
Dry beans , peas ................... .
Sweet bakery goods, ready-to-eat .. .
Eggs, shell ....................... .
Potatoes, fresh ................... .
Pork and beans, canned ....... .. ... .
Flour .............. .. ........ · ·. · · ·
Ice cream ......................... .
Share of each
$100 worth of
food, 1975 1
Dollars
0.11
.96
.42
1. 54
.93
1.00
.86
.09
.58
1. 34
.25
.58
1.11
7.74
.01
.15
.26
. 71
. 24
.11
.34
1. 89
2.16
1. 29
.18
.37
1. 62
Change from
1965 to 1975
Percent
+120
+113
+ 62
+ 62
+ 45
+ 41
+ 32
+ 29
+ 29
+ 26
+ 25
+ 21
+ 21
+ 20
- 67
- 55
- 46
- 43
- 31
- 27
- 26
- 24
- 23
- 19
- 18
- 16
- 16
lAll consumption--whether at farm level or by institutions, restaurants,
government, or households--is given in terms of retail store valuation.
Excluded are those portions of a commodity used commercially in making some
other products, such as the portion of flour output used in baked goods
reported as consumed. Also excluded are infant formulas and alcoholic
beverages.
Source: Food Topics, 19th Annual Study: What Consumers Spend, September
1966 issue; and Supermarketing (formerly called Food Topics), 29th Annual
Consumer Expenditures Study, September 1976 issue.
SUMMER 1977 15
Fresh vegetables accounted for almost 40
percent of the vegetable-fruit group, so the
20-percent increase between 1965 and 1975 in
the share of food dollars for fresh vegetables
had considerable influence on change in the
total vegetable-fruit group in table 1.
Food with large decreases in 1975 in their
share of food dollars included condensed milk,
down 67 percent; lard and fresh cream, each
down about 50 percent; butter, down 43 per­cent;
cornmeal and hominy, dry beans and
peas, ready-to-eat sweet bakery goods, and eggs
in the shell, each down about 25 percent. As
most of these individual food items also took
less than 1 percent of the 1975 market, their
decrease had little impact on their respective
food group.
Limitations of Study
These comparisons were estimated for the
country as a whole. Families of certain sizes or
at certain economic levels may have changed
their food purchasing patterns in various
ways-some more and some less than these
averages indicate. For example, one family may
have shifted almost entirely from fresh foods
to highly processed ones, while another may
have shifted from processed to fresh ones.
Answers to questions about how individuals
and households have modified their food con­sumption
since 1965 will be answered by the
1977-78 Nationwide Food Consumption Sur­vey
now in progress.
The comparisons were for the share of con­sumption
in terms of money value of foods at
the time. Prices for most foods increased
between 1965 and 1975 but not uniformly.
Therefore, changes, or lack of them, were part­ly
due to changes in the amount of the food
used and partly due to the changes in relative
prices.
In Conclusion
This study shows that U.S. consumers allo­cated
their food dollars in 1975 much as they
did in 1965. They continued to allot well over
one-third to meat and meat alternates in 1975.
They showed a slight tendency toward a lower
allocation of funds for the milk and bread and
cereal groups, offset by increases for prepared
and partly prepared mixtures. Consumers also
continued to show a preference for fresh
foods-milk, meat, poultry, seafood, nuts, eggs,
vegetables, and fruit-allocating almost half of
their food money to these foods.
FARM POPULATION OF THE UNITED STATES: 1976
Approximately 8% million persons, or 3.9
percent of the total U.S. population, lived on
farms in April 1976.1 Continuing a long-term
downward trend, the 1976 estimate was about
600,000 or 6.9 percent smaller than in 1975,
and almost 1.5 million or 15 percent lower
than in 1970. The average annual decline in the
total farm population between 1970 and 1976
was 2. 7 percent; however, the rate of loss dif­fered
significantly between white and black
1 Figures are based on the definition of "farm" used
from 1960 to 1975 by the U.S. Department of Agricul­ture
and the U.S. Department of Commerce.
16
farm residents-2.2 and 9.2 percent,
respectively.
Since 1970, the number of farm children
under 14 years of age has dropped by a third,
and their proportion of all farm people has
declined from 26 to 20 percent. During this
same period the number of farm persons 14
years old and over decreased only 9 percent.
Much of the decline in children since 1970 can
be attributed to the sharp drop in the birth rate.
Source: U.S. Department of Commerce, Bureau of
the Census. 1977. Current Population Reports, Series
Census-ERS P-27, No. 48.
FAMILY ECONOMICS REVIEW
RETIREMENT HISTORY STUDY
To assess the Social Security program's pro­visions
for retired workers and to learn about
patterns of retirement and the relationship of
retirement to other changes that take place
among persons in their sixties, the Social
Security Administration (SSA) is conducting a
10-year longitudinal study of the retirement
process. This article summarizes, from publish­ed
SSA reports, the kind of information being
collected and gives a few preliminary findings
from the early years.
In spring of 1969, the first data were collect­ed
from 11,153 persons who were born
between 1905 and 1911 (persons aged 58 to 63
in 1969). Subsequent data collections were at
2-year intervals and will continue until the
respondents reach the 68 to 73-year age group.
After 10 years the sample size is expected to be
about 50 percent of the original because of
death, respondent movement, or dropout. The
sample selected for the study includes married
men, and men and women who were not mar­ried
at the time of the initial sampling. Married
women were excluded because preliminary
interviews found most married women of this
generation identify their retirement with their
husbands' retirement.
Characteristics in 1969
Work life. The study defined retirement as
the stoppage of work by persons past age 55 or
60. The respondents were asked to define their
work status as completely retired, partly retir­ed,
or not retired. In 1969, 17 percent of t?e
entire sample described themselves as com­pletely
retired and 9 percent said they were
partly retired. Women were more likely not to
be working (42 percent) than were men (16
percent). Married men were more likely to be
working full time than men with no wives pres­ent-
77 percent of the men with wives in the
household were working full time as compared
with only 59 percent of the men with no wives
present.
Twenty-two percent of the workers in the
sample in 1969 reported earnings at the rate of
at least $10,000 a year; 7 percent were earning
less than $2,500. Of the working women,
SUMMER 1977
4 percent were earning at the rate of $10,000
or more at the time of the survey; 24 percent
earned less than $2,500.
Health. Data on the health status of respond­ents
were obtained by self-assessment, that is,
how respondents rated their health compared
with other persons in their same age group.
Also, respondents were asked about their work
and mobility limitations, expenditures and
insurance for health care, and need for medical
attention. Sixty-nine percent of those who
reported themselves as completely retired in
1969 left their last jobs because of poor health.
Of those reported as partly retired, 49 percent
cited health as the reason. Three-fourths of the
respondents considered themselves as healthy
as or healthier than other people their age (see
table). More than three-fifths of the married
men and the unmarried women reported no
physical or job-related disabilities in 1969.
Only about half of the men without spouses
reported no disabilities.
The deterioration of health that comes with
the aging process may change the expenditures
for medical care of persons in the sample.
Medical insurance plans and benefits often
stop, become limited, or cost more to continue
after retirement. Not only the changes in
expenditures for medical care due to anticipat­ed
poorer health, but also the shifts in the man­ner
of paying for medical services and the
extent to which current public health insurance
programs (Medicare) are meeting the financial
as well as medical needs of older persons will
be observed in the Retirement History Study
(RHS).
Living arrangements. Ninety-seven percent
of the sample lived in houses or apartments in
1969. The rest lived in hotels, rooming houses,
or trailers. About 9 percent lived on farms. A
small percentage at ages 58 to 63 had their
housing paid for, all or in part, by other family
members. More than half of the respondents
lived alone (or with spouse only in the case of
married men); about one-third of those with
children reported any living in the household.
The nonmarried women tended to have more
17
rooms per person in the household than the
other groups. This can be explained in part by
the number of widows (64 percent of the
women on the panel), many of whom were liv­ing
in the family house.
As respondents age, the various components
of housing status such as space requirements,
mobility of older persons, and companionship
needs can be expected to change. To study
these changes, respondents have been asked to
report on the employment of outside house­hold
help, the presence of elderly parents or
other relatives or nonrelated persons in the
household, whether any support is given to or
received from relatives, and the degree of com­munication
between respondent and relatives
outside the household.
Expenditures. Differences in spending pat­terns
associated with income level have been
revealed in many cross-sectional surveys. How­ever,
the longitudinal data of the Retirement
History Study should provide a clearer picture
of the changes in spending patterns, as persons
go from preretirement to retirement and
experience changes in income and activity.
Monitoring expenses, along with the personal
information gathered in the study over the
10-year period, will also provide information
on the style of living outside of working life in
the later years and may lead toward improved
social welfare programs for the Nation's older
population.
Expenditures for housing, which include
taxes, insurance, and utilities, may cause finan­cial
strain because of diminished and possibly
fixed incomes and rising prices. Market values
are increasing rapidly, which means that an
owned home in retirement can be a greater
financial asset than anticipated when purchas­ed.
However, higher taxes, which come with
increased market value, may counterbalance
the financial advantage of homeownership in
the retirement years. An evaluation of the
extent to which home ownership is an invest­ment
and the extent to which it is a financial
burden in later years may be possible through
the RHS.
Food expenditures generally show little
immediate response to changes in income,
although some "luxury" foods are usually cut
out as income declines. Another factor affect­ing
food expenditures in retirement may be a
reduction in food purchased at work. Food
Health self-assessment of persons 58 to 63 years old in 1969
Item
Self-reported health status:
Better than others of same age
Same as others of same age
Worse than others of same age
Don't know
Work limitations:
No limitations
Mobility limitation only
Work limitation
Spouse present
Men
35
42
19
3
63
4
33
No spouse present
Pereent
Men
28
41
27
4
53
2
44
Women
35
39
20
5
61
3
36
Source: Motley, O.K. 1972. Health in the years before retirement.
Soeial Seeurity Bulletin 35 (12): 18-36. U.S. Department of Health,
Education, and Welfare, Social Security Administration.
18 FAMILY ECONOMICS REVIEW
purchased for use at home generally costs less
than food purchased away from home; as more
meals are prepared at home and as lower calor­ic
needs of older, less active persons are taken
into account, per person food costs may
decrease. On the other hand, if dining out
becomes a leisure-time activity, food costs may
increase.
Transportation costs · can be expected to
change with the retirement process since there
are no longer costs of commuting to and from
work. However, with the retirement process
may come new transportation needs and costs.
Recreational travel may be an added compo­nent
of transportation expense, particularly
among higher income groups. A change of
locale (moving to a new area) may affect trans­portation
costs. Finally, declining mobility that
comes with the aging process will change the
transportation needs of this group.
Changes in 1973
Over the 4-year period from 1969 to 1973,
the proportion of men working declined from
84 percent to 47 percent. Among the women
interviewed, only 33 percent were working in
1973 compared with 58 percent in 1969. Two
percent of the respondents were not working in
1969 but were reported working in 1973. Near­ly
one-fifth of the full-time workers switched
to part-time during this 4-year period. Cessa­tion
of work was accompanied by a reduction
in total income of about 40 to 45 percent,
measured in constant dollars, over the 4-year
period. 1 This meant that the purchasing power
of retirees interviewed in 1973 was barely over
half their purchasing power in the 4 years earli­er.
Nonmarried men were much better off
before they stopped working than nonmarried
women, but afterward the incomes of both
groups were approximately the same.
A much larger proportion of women than
men moved to a different housing unit between
1969 and 1973. Thirty percent of the men's
households and 40 percent of the women's
households included an adult relative in 1969.
This had dropped to 8 percent and 23 percent,
respectively, by 1973. Sixteen percent of the
nonmarried men had married by 1973; few
women had.
1 Based on the total income for the years immediate­ly
prior to reporting periods.
Sources: U.S. Department of Health, Education, and
Welfare; Social Security Administration, Social Securi­ty
Bulletins: Bond, K., 1976, Retirement History
Study's first four years: Work, health, and living
arrangements, 39 (12): 3-14, 40; Fox, A., 1976, Work
status and income change, 1968-72: Retirement His­tory
Study preview, 39 (12): 15-31; Irelan, L. M., 1972,
Retirement History Study: Introduction, 35 (11): 3·8.
Irelan, L. M., Motley, D. K., Murray, J., Schwab,' K.,
and Sherman, S. R., 1976, Almost 65: Baseline data
from the Retirement History Study, U.S. Dept.· Health,
Ed., and Welfare, Social Security Admin., 165 pp.
SOCIAL WELFARE EXPENDITURES,
FISCAL YEAR 1976
Expenditures under public social welfare
programs during fiscal year 1976 rose 15.7 per­cent
or $45 billion, down moderately from the
19.7 percent increase and record dollar advance
of $4 7 billion recorded a year earlier. As in
1975, two major factors in the abnormally high
rate of increase were the continued efforts of
the Government to cope with the 1974-75
recession and the continuing inflation. Benefits
for the needy and the unemployed expanded
SUMMER 1977
further, while higher prices triggered cost-of­living
adjustments in cash benefits and added
to the cost of providing social welfare services.
Expenditures for social insurance programs
(OASDHI-old-age, survivors, disability, and
health insurance; railroad and public employee
retirement; unemployment insurance; and
workmen's compensation) accounted for 44
percent of the total bill for social welfare. Aid
to education accounted for 26 percent, and
19
Social welfare expenditures, fiscal year 1976
Million Percent
Percent
Program
dollars distribution increase,
1975-76
Total social welfare 331,366 100 15.7
Social insurance 146,592 44 19.2
Public aid 48,946 15 20.2
Health and medical programs 19,193 6 10.1
Veterans' programs 19,006 6 11.7
Education 86,426 26 10.9
Housing 3,127 1 5.4
Other1 8,076 2 7.2
1Housing, vocational rehabilitation, institutional care, child nutrition,
child welfare, and special programs.
Source: Skolnik, A.M., and Sophie, R.D. 1977. Social Welfare expendi­tures,
fiscal year 1976. Social Security Bulletin 40 (1): 3-19. U.S.
Department of Health, Education, and Welfare; Social Security Administra­tion.
public aid (public assistance, supplemental
security income, food stamps, and emergency
employment and manpower training program)
for 15 percent (see table).
The largest growth between 1975 and 1976
was for unemployment insurance and employ­ment
security programs: an increase of 43 per­cent.
Public aid programs rose 20 percent
during the year. Increases in unemployment
insurance and public aid were directly affected
by the 1974-75 recessions and Government
efforts to cope with it. Other income-main­tenance
programs saw large increases because
of cost-of-living adjustments triggered by
inflation.
The combination of recession and inflation
made social welfare expenditures grow at a
faster pace than the economy. Such expendi­tures
were 20.6 percent of the gross national
product (GNP) in 1976, up from 17.6 percent
in the prerecession year of 197 4.
20
The impact of these higher social welfare
expenditures continued to be felt chiefly by
the Federal Government. Three-fifths of all
public expenditures for social welfare purposes
were federally funded in 1976, compared with
58 percent in 1975 and 53 percent in 1970; the
balance was funded through State and local
governments. The amount spent for social wel­fare
absorbed 56 percent of the Federal budget
in 1976, compared with 54 percent in 1975
and 40 percent in 1970. State and local juris­dictions
also experienced an upward trend,
although to a much lesser degree, reporting 67
percent of their expenditures devoted to social
welfare in 1976 and 64 percent in 1970.
Source: Skolnik, AM., and Sophie, R. D. 1977.
Social welfare expenditures, fiscal year 197 6. Social
Security Bulletin 40 (1): 3-19. (U.S. Dept. of Health,
Education, and Welfare. Social Security
Administration.)
FAMILY ECONOMICS REVIEW
LENGTH OF WORKING LIFE, 1970
In 1900, men averaged five times. as many
years in the labor force as women; by 1970
that ratio had fallen to less than twice as many
years. The ratio would be even lower except
1hat many married women still inwrrupt their
careers to have children; to move to new loca­tions
with their husbands, or for other reasons.
Women also tend to retire somewhat earlier
than men, at an average age of about 60 years.
The average number of years spent in the
labor force by men rose from 32.1 in 1900 to
41.5 in 1950, but declined slightly to 40.1 by
197o-mostly because of a slow decline in
labor force participation among men over age
55. While working-life expectancy of men has
increased about 10 years since 1900, life
expectancy at birth has climbed by almost 20
years-from 48.2 to 67.1. Thus, the average
time not in the labor force has risen dramatical­ly.
Practically all of the non work activity of
men at the tum of the century occurred before
they entered the labor force. Now a large pro­portion
of the nonwork years are spent in
retirement, although an extended period of
education has also delayed labor force entry
for many men.
Since 1900 the overall life expectancy of
women has increased from 50.7 years to 7 4.8
years, almost 50 percent. Of the 24 additional
years, over two-thirds have been added to
working life. The worklife expectancy of
women climbed from 6.3 to 22.9 years
between 1900 and 1970. After 1950 the work­life
expectancy among women rose at a faster
rate than overall life expectancy, and time
spent out of the labor force began to decline.
Source: U.S. Department of Labor, Bureau of Labor
Statistics. Length of working life for men and women,
1970. Special Labor Force Report 187. (Revised and
reprinted from Feb. 1976 Monthly Labor Review.)
MARITAL COMPOSITION OF THE LABOR FORCE
Married persons' share of the labor force has
been declining in recent years, while that of
unmarried persons has been increasing. From
March 1970 to March 1976, married persons'
share of the labor force dropped from 69.2 to
64.7 percent. Over this same period, the pro­portion
of persons in the work force who have
never been married grew from 20.1 to 23.2 per­cent,
and that of divorced and separated per­sons
rose from 6.8 to 9.2 percent. Several
factors accounted for this gradual change in the
profile of the labor force: The continuation of
the long-term decline in the participation rate
of married men, which was not completely
counterbalanced by the rise for married
women; and the rapid increase of young people
in the population and in the labor force, many
of whom are remaining single longer.
SUMMER 1977
There were 14.9 million mothers in the labor
force in March 1976, 11.7 million of whom
were married and living with their husbands.
The labor force participation rate for wives
with children under 18 years old rose to 46.1
percent in March 1976, while the rate for wives
without children remained the same-43.8 per­cent.
About 7 4 percent of divorced mothers
with children under 18 were in the labor force,
as were about 50 percent of widowed mothers
and 45 percent of never-married mothers.
Source : U.S. Department of Labor, Bureau of Labor
Statistics. Married persons share of the labor force
declining, BLS study shows. U.S. Dept. of Labor Press
Release No. 77-191, March 1977.
21
!-.?
!-.?
~
Cost of food at home estimated for food plans at 4 cost levels, June 1977, U.S. averaoe 1
Cost for 1 week Cost for 1 month
Sex-age groups Thrifty Low-cost Moderate- Liberal Thrifty Low-cost Moderate-plan2
plan cost plan plan plan2 plan cost plan
DoUars DoUars
FAMILIES
Family of 2: 3
20-54 years ............... 23.60 31.20 39.20 47.10 102.40 135.50 170.00
55 years and over ..... ... . 21 . 20 27.90 34.60 41.40 92.20 121. 20 149.70
Family of 4:
Couple, 20-54 years and
children--
1-2 and 3-5 years ....... 33.20 43.40 54.10 65.00 144.00 188.20 234.90
6-8 and 9-11 years ...... 40.00 52.30 65.60 78.80 173.20 226 .60 284.40
INDIVIDUALS 4
Child:
7 months to 1 year ........ 4. 70 5.80 7. 10 8.40 20.50 25.20 30.90
1-2 years ................. 5.30 6.80 8.40 10.00 23.00 29.60 36.50
3-5 years ....... . ......... 6.40 8.20 10.10 12.20 27.90 35 .40 43.90
6-8 years .... .. ... . ....... 8.20 10.60 13.30 16.00 35.50 46.00 57.70
9-11 years ................ 10.30 13.30 16.70 20.00 44.60 57.40 72.20
Male:
12-14 years ............... 11.00 14.10 17.70 21. 20 47.50 61.00 76.50
15-19 years .............. . 12.10 15.60 19.60 23.60 52.30 67.60 84.70
20-54 years ............... 11.80 15.60 19.70 23.80 51.10 67.50 85.40
55 years and over ......... 10.50 13.80 17.20 20.70 45.60 59.90 74.30
Female:
12-19 years ............... 9.80 12.70 15.70 18.80 42.50 54.80 68.00
20-54 years ............... 9. 70 12.80 15.90 19.00 42.00 55.70 69.10
55 years and over .......... 8.80 11.60 14.30 16.90 38.20 50.30 61.80
Pregnant .................. 12.30 15.90 19.50 23.20 53.40 68.80 84.60
Nursing ............ ....... 13.00 16.80 20 .90 24 .90 56.40 72.80 90.70
Liberal
plan
204.10
179.30
282.00
341 . 50
36.60
43 . 50
53 . 00
69.30
86.70
91.90
102.10
103.00
89.60
81.30
82.50
73.40
100.60
~ 107.70 ?
~ 1Assumes that food for all meals and snacks is purchased at the store and prepared at home. Estimates for each plan
~ were computed from quantities of foods published in the Winter 1976 (thrifty plan) and Winter 1975 (low-cost, moderate-
0 cost, and liberal plans) issues of Famity Economics Review. The costs of the food plans were first estimated using
Z prices paid in 1965-66 by households from USDA's Household Food Consumption Survey with food costs at 4 selected
~ levels. These prices are updated by use of "Estimated Retail Food Prices by Cities" released monthly by the Bureau of n Labor Statistics.
oo 2coupon allotment in the Food Stamp Program based on this food plan.
~ 310 percent added for family size adjustment. See footnote 4.
< ~The costs given are for individuals in 4-person families. For individuals in other size families, the following
~ adjustments are suggested: !-person--add 20 percent; 2-person--add 10 percent; 3-person--add 5 percent; 5-or-6-person--
~ subtract 5 percent; ?-or-more-person--subtract 10 percent.
n
0
(..I.)
0
'TI
'TI
0
0 c
.).>.
::J:
0
~
m
CONSUMER PRICES
Consumer price index for urban wage earners and clerical workers
(1967 = 100)
Group
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 operation ......... .
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
June
1977
181.8
193.6
191.9
200.6
189.0
190.3
152.9
203.9
201.8
283.1
213.0
177.1
153.9
153.8
146.0
156.8
179.2
178.7
183.2
173.2
201.8
170.6
157.6
158.4
May
1977
180.6
191.7
189.8
199.3
187.6
188.9
152.2
202.3
200.2
282.6
210.9
175.9
153.4
154.3
144.7
157.0
178.2
177.8
181.5
172.3
200.5
169.5
156.8
158.0
April
1977
179.6
190.9
189.3
197.5
186.7
187.7
151.6
201.0
199.4
282.0
209.8
175.4
152.3
153.1
143.6
156.2
176.8
176.3
180.4
171.4
199.1
168.4
156.0
157.7
Source: U.S. Department of Labor, Bureau of Labor Statistics.
U.S. WORKERS AND THEIR JOBS:
THE CHANGING PICTURE
June
1976
170.1
180.9
179.7
185.6
176.5
178.2
144.4
190.7
181.7
247.3
188.5
168.5
146.9
146.7
140.9
149.5
165.9
165.0
173.6
162.8
183.7
159.8
150.9
153.2
"U.S. Workers and Their Jobs: The Changing
Picture" is a new chartbook issued by the
Bureau of Labor Statistics of the U.S. Depart­ment
of Labor. This brief chartbook is based
on data from some of the Bureau's major statis­tical
series and illustrates patterns of change in
the American economy and labor force. Color­ful
charts are used to show movements of
wages, prices, productivity, employment, edu­cation,
and union membership over the years.
SUMMER 1977
The chartbook, Bulletin 1919, is for sale for
60 cents a copy from the Superintendent of
Documents, U.S. Government Printing Office,
Washington, D.C. 20402 (Stock No.
029-001-01917-3).
23
FAMILY ECONOMICS REVIEW
SUMMER 1977
CONTENTS
Page
New Developments in Clothing and Textiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Annette Polyzou
Bankruptcy and Its Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Connie M Hoerman
The Management and Use of Credit Cards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Connie M Hoerman
How Food Dollars Were Divided, 1965 and 1975............ . . . . . . . . . . . . . . . . . . . . . 12
Cynthia Cromwell and Richard Kerr
Farm Population of the United States: 1976 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Retirement History Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Social Welfare Expenditures, Fiscal Year 1976. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Length of Working Life, 1970 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Marital Composition of the Labor Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
U.S. Workers and Their Jobs: The Changing Picture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Regular Features
Some New USDA Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Cost of Food at Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Consumer Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Issued August 1977
FAMILY ECONOMICS REVIEW