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Editor Katherine S. Tippett Managing Editor Sherry Lowe Editorial Assistant Nancy J. Bailey Family Economics Review is published each quarter by the Family Economics Research Group, Agricultural Research Service. United States Department of Agriculture. Washington. D.C. The Secretary of Agriculture has determined that the publication of this periodical is necessary in the transaction of the public business required by law of this Department. Use of funds for this periodical has been approved by the Director of the Office of Management and Budget through March 31. 1987. Contents may be reprinted without permission. but credit to Family Economics Review would be appreciated. Use of commercial or trade names does not imply approval or constitute endorsement by USDA Family Economics Review is for sale by the Superintendent of Documents. U.S. Government Printing Office. Send subscrip-tion orders. change of address. and single copy requests to Superintendent of Documents. U.S. Government Printing Office. Washington. D.C. 20402. (See subscription form in back of this issue.) Suggestions or comments concerning this publication should be addressed to: Katherine S. Tippett. Editor. Family Economics Review, Family Economics Review 1984 No. 3 Contents The Social Security Program of Self-Employed Farm Operator Families Kathleen K. Scholl Developments in Consumer Product Standards Frankie N. Schwenk Child Cost User Data Updated to 1983 Carolyn Summers Edwards and Linda J. Beckham Cost of Having a Baby Some New USDA Publications An Aging Society Health Care Expenditures for the Elderly--Medicare Coverage American Women--Three Decades of Change Farm Population of the United States, 1982 Nutrient Content of the U.S. Food Supply, 1982 Major Programs of the Bureau of Labor Statistics 1980 Census of Population and Housing Users' Guide--Part C New Ruling for Mortgage Insurance Premiums Synopsis of the Annual Energy Review and Outlook, 1982 Bureau of the Census Catalog, 1982-83 Agricultural Outlook '85--New Date Announced Cost of Food at Home Consumer Prices Family Economics Research Group. USDNARS, Federal Building, Room 442A. Hyattsville, Md. 20782. Issued July 1984 1 10 13 19 20 20 21 22 22 23 23 23 24 24 25 25 26 27 The Social Security Program of Sel1-Employed Farm Operator Families By Kathleen K. Sc;holl Consumer economist The social security program for selfemployed farm operator families is somewhat different from the social security program of wage-earner families. Fa·rm operators who are sole proprietors have a higher social security tax rate but have ways to shelter farm income from this higher tax. One way to shelter farm income is for the farm operator to pay a salary to his wife since spouses of sole proprietors are excluded from social security coverage as individual workers. This exclusion, however, may not always benefit the family. This article reviews the history of social security coverage for farm families and illustrates, through the use of two hypothetical case studies, the differences in social security tax rates for self-employed farm operator families and wage-earner families. The advantages and disadvantages of using tax shelters available to the farm family are also discussed. HISTORY OF SOCIAL SECURITY FOR THE SELF-EMPLOYED The decision to exclude farm laborers, farm workers, and farm operators from the social security program when it was developed in 1935 was based upon problems in administering the collection of funds (!)• The social security legislation placed primary responsibility on the employer for the withholding of the employee's tax and the paying of the employer's tax. No mechanism was in place for collecting tax from the self-employed. The present system that farmers use in paying social security tax along with personal income tax could not be used at that time since many farmers did not file income tax returns because of large personal exemptions in the computation of net self-employment earnings. Changes in the personal exemptions after World War II and the application of income tax to lower income levels eliminated most of the administrative problems in collecting a social security tax from the self-employed farm operator. As a result of these income tax changes, the Social Security Act was amended in 1954 to include self-employed farm operators; they began reporting their earnings for social security purposes in 1955.1 In determining what tax rate should be applied to self-employment earnings, the 19 4 7-48 U. S. Advisory Cou neil on Social Security recommended that the self-employed person contribute to the social security fund at 1-1/2 times the employee rate (75 percent of the combined employee and employer rates) (_~). The Council expressed three reasons for this rate rather than a rate that equaled the combined rates: (1) Some of the self-employed would be paying tax on the income from capital investment; (2) if the combined employee and employer rates were used, the high-income self-employed might be overcharged for their coverage in comparison with comparable protection under private insurance; and (3) self-employed individuals tend to retire at a later age than wage and salary workers, resulting in an overpayment to the trust fund since their contribution period would be longer and the benefit period shorter. The self-employment rate recommendation of the 1947-48 Council was implemented and remained close to 75 percent of the combined employee and employer rates (75 percent of the combined rates for Old-Age, Survivors, and Disability (OASDI) program and 50 percent of the combined rates for Hospital Insurance) until the passage of the Social Security Amendments of 1983 (Public Law 98-21). In these amendments the OASDI tax rate for self-employed persons was raised to equal the combined employee and employer rates. The National Commission on Social 1 The Social Security Act was amended in 1950 to include nonfarm self-employed persons and hired farm laborers. PROPtRT'/ OF TH::: liRRAR1 / JUL 13 198 J 'Pdsitory Review Security Reform (6) recommended this change based on the need- to raise revenues for the social security trust fund. The full burden of the tax increase will not be borne by the self-employed. Individuals will be able to use tax credits to lower their full tax rate (columns 2 and 5 of table 1) to the real rate (columns 3 and 6). The difference between the full and real rates will be taken from general revenues and placed into the social security trust fund. In 1984 a credit of 0. 3 percent is allowed for employees and a credit of 2. 7 percent is given for self-employed individuals. The employee credit will be permitted for 1984 only, and the credit for self-employed persons will be reduced to 2.3 percent for 1985 and 2.0 percent for 1986 through 1989. After 1989, the credit will be replaced with special provisions designed to treat the self-employed more equitably with the income tax and social security tax systems of employees and employers. TWO CASE STUDIES The Families 2 Rural F. Jones was born on his family farm on January 2, 1918. Jones became the sole owner of the family farm when his parents died in 1939, the year he married Carol. Although the farm is a sole proprietorship, Carol has always made a substantial contribution with her farm labor. In 1955, the first year farm operators paid into the social security fund, Rural Jones began paying self-employment taxes. For 28 years, from 1955 to 1982, he earned the incomes as reported in table 2. On January 2, 1983, at the age of 65 years, Rural F. Jones retired. 2To present realistic portrayals of income flows for these case studies, U.S. mean farm incomes and median wage-earner incomes were used for the families. Although the incomes for these two families were taken from aggregate data, the economic analysis should not be redirected to the aggregate level because of differences in definitions between the two data sets used to obtain the incomes. Table 1. Social security tax rates as a percentage of earnings for employers and employees (each) for the self-employed, by former and current legislation flnployer and anployee rates Self-employed rates Public Law 98-21 Public Law 98-21 Years Prior Without With Prior Without With law tax tax law tax tax credit credit credit credit (1) (2) (3) (4) (5) (6) 1984 ••..•..•.••• 6.7 7.0 1 6.7 9.35 14.0 11.3 1985 ••••.•...••• 7.05 7.05 7.05 9.9 14.1 11.8 1986-87 ......... 7.15 7.15 7.15 10.0 14.3 12.3 1988-89 ......... 7.15 7.51 7.51 10.0 15.02 13.02 1990 and later ••• 7.65 7.65 7.65 10.75 15.3 (2) 1 Employer rate remains at 7.0 percent. 2 After 1989 the credit will be replaced with special prov1s10ns designed to treat the self-employed more equitably with the income tax and social security tax systems of employees and employers. Source: Svahn, John H., and Mary Ross, 1983, Social Security Amendments of 1983: Legislative history and summary of provisions, Social Security Bulletin 46 (7): 3-48. 2 family Economics Review 1984 No.3 Table 2. Maximum taxable earnings, tn...-..a ble l·ncome, t.n...-. ra t es, an d soc1·a 1 secur1• t y con t r1· b ut1· 0ns o f Rural F. Jones and Wage B. Smith, 1955-82 Maxirrun Rural F. Jones Wage B. Smith Year taxable earnings Taxable Self- Social Wage Social Social farm e!Jl>loyment security income 2 security security income 1 tax rate contributions tax rate contributions Dollars Dollars Percent Dollars Dollars Percent Dollars 1955 ••••••• 4,200 1956 ••••••• 4,200 1957 ••••••• 4,200 1958 ••••••• 4,200 2,504 3.0 75.12 4,764 2.0 84.00 2,750 3.0 82.50 5,164 2.0 84.00 2,604 3.375 87.89 5,297 2.25 94.50 3,133 3.375 105.74 5,474 2.25 94.50 1959 ••••••• 4,800 1960 ••••••• 4,800 2,936 3. 75 ll0.10 5,704 2.50 120.00 3,169 4.5 142.61 5, 920 3.0 144.00 1961. •••••• 4,800 3,431 4.5 154.40 5,990 3.0 144.00 1962 ••••••• 4,800 3, 565 4.7 167.56 6,072 3.125 150.00 1963 ••••••• 4,800 3,639 5.4 196.51 6,259 3.625 174.00 1964 ••••••• 4,800 3,862 5.4 208.55 6,596 3.625 174.00 1965 ••••••• 4,800 4,190 5.4 226.26 6,980 3.625 17 4. 00 1966 ••••••• 6,600 5,037 6.15 309.78 7,318 4.2 277.20 1967 ••••••• 6,600 4,550 6.4 291.20 7,996 4.4 290.40 1968 ••••••• 7,800 4,946 6.4 316.54 8,440 4.4 343.20 1969 ••••••• 7,800 5,781 6.9 398.89 9,189 4.8 374.40 1970 ••••••• 7,800 6,077 6.9 419.31 9,776 4.8 374.40 1971 ••••••• 7,800 6,039 7.5 452.93 10,246 5.2 405.60 1972 ••••••• 9,000 8,063 7.5 604.73 11,001 5.2 468.00 1973 ••••••• 10,800 12,564 8.0 864.00 11,875 5.85 631.80 1974 ••••••• 13,200 12,180 7.9 962.22 12,549 5.85 734.12 1975 ••••••• 14,100 11,423 7.9 902.42 13,316 5.85 778.99 1976 ••••••• 15,300 11,622 7.9 918.14 14.096 5.85 824.62 1977 ••••••• 16,500 10,852 7.9 857.31 15,345 5.85 897.68 1978 ••••••• 17,700 14,567 8.1 1,179.93 16.271 6.05 984.40 1979 ••••••• 22,900 15,505 8.1 1,255.91 16,034 6.13 982.88 1980 ••••••• 25,900 15,111 8.1 1,223.99 17,569 6.13 1,076.98 1981 ••••••• 29,700 13,025 9.3 1,211.33 18.958 6.65 1,260.71 1982 ••••••• 32,400 11,205 9.35 1,047.67 19,389 6.70 1,299.06 Total •••• 204,330 14,773.54 283,588 13,446.60 1 The annual earnings were calculated from unpublished data and from data in the Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics, 1981 (.!.!)• The earnings represen.t the average farm income which farm operators would have paid self-employment tax. Earnings were compiled and social security contributions were calculated by Isabelle Payton, Agricultural Research Service, U.S. Department of Agriculture. 2The U.S. annual median earnings of wage and salary families for 1955-82 were used for the table. The median earnings are of families with only wage and salary income. These include urban, nonfarm, and farm families. (Also, the incomes are for families that include multi-earners. Historical data are not available for one-earner families with only wage and salary income.) The annual earnings were obtained from source of income tables in the Current Population Reports of the Consumer Income Series P-60 for the years 1955-79. The titles of these reports have changed over the years but are currently titled, "Money Income of Households, Families, and Persons in the United States: 1981" (_!!). Earnings from wages and salaries for 1980, 1981, and 1982 are unpublished data from the Bureau of tt"\e Census. 1984 No.3 Family Economics Review J Since 1955 Rural F. Jones reported a total farm income of $204,330. Over these years Rural paid $14,773 in self-employment tax. Based upon his earnings record, Rural and Carol Jones receive a monthly social security benefit check of $852. 3 Wage B. Smith was also born on January 2, 1918. In 1935 Smith joined the U.S. Army and in 1939 married Susan. Throughout their married life, Susan did not work outside the home. After 20 years of military service, Wage Smith left the Army and began working for a farm implement manufacturer. Smith's annual earnings are reported in table 2. On January 2, 1983, Wage Smith retired at the age of 65. During the 28 years that Smith worked in private industry, his employer deducted the appropriate social security tax from Smith's paychecks and matched those contributions through an employer tax. Each paid $13,447 for a total contribution of $26, 894. Smith earned a total income of $283,588 while he worked in manufacturing. Wage and Susan receive a monthly social security benefit check of $1,012.50, which is based upon Smith's earnings record. A Comparison A comparison of income, social security tax rates, social security contributions, and benefit levels indicate sharp differences between the situations of Rural F. Jones and Wage B. Smith. In the 28-year period, Jones earned about $80,000 less than Smith. When the income flows are converted to constant 1982 dollars (1967=100), the difference more than doubles to $194,000. Rural Jones paid $1,327 more than Wage Smith in social security contributions. From 1955 to 1973, Smith paid the maximum contribution, whereas Jones paid the maximum tax only in 1973. Because Jones paid at a higher rate, his monetary contribution was higher than Smith's even with a lower income flow. Jones paid 7 percent of his total income (current dollars) in self-employment tax; Smith paid 5 percent of his total 3 The monthly social security benefit levels for a worker and spouse were calculated using the AIME formula. Benefit levels were calculated by Michael Packard, Social Security Administration, U.S. Department of Health and Human Services. 4 family Economics Review 1984 No.3 earnings to the social security fund. However, taking into consideration the tax · that his employer also paid while Smith was employed, a net difference of $12,120 in social security contributions was paid on behalf of Wage Smith above the amount that was paid by Rural Jones. Although Rural Jones as an individual paid more into the social security trust fund and paid a greater proportion of his income than Wage Smith, the Jones family had a lower monthly benefit level. The difference of $160.50 per month in benefit levels of Smith and Jones is attributable to the higher level of Smith's wages. Benefits are determined by the amount of earnings, not on the amount contributed to social security. In summary, the farm family in comparison with the wage-earner family has lower income, has a higher social security tax rate, pays more in social security contributions, and receives lower benefits. The higher benefits for the typical wage-earner family have in effect been funded through employer contributions to the fund. With the increase in the rate of contribution for the self-employed as directed in Public Law 98-21, the difference in the amount paid to the fund by farm and wage-earner families will become even greater. Farm families of the future will pay an increased tax rate and contribute a larger portion of their income to social security, but will have their benefits calculated in the same way the levels are determined for nonfarm families. From now until 1988, the amount of taxes to be paid by future wage and salary families will grow more slowly than that for farm families. TAX SHELTERS Off-farm Income Tax Shelter Since an individual with both wage and self-employment income is taxed first on wages, for social security purposes, farm operators who work off the farm can subtract those earnings from maximum taxable earnings before applying the higher self-employment tax rate to farm income. To take advantage of this off-farm income tax shelter, the farm operator's off-farm earnings should equal the maximum taxable amount, so that none of the farm income will be taxed for social security purposes. Farm operators who work off the farm generally work part time and are unlikely to earn enough to shelter all the farm income. Farm operators who work off the farm but earn less than the taxable amount may pay more total social security tax by paying two different rates on two types of income than they would pay on farm income only. For example, if Rural Jones in 1978 earned $10,000 off the farm and had a farm income of $14,567, he would have paid $605 in social security tax -as an employee and $624 in self-employment tax. The selfemployment tax would have been paid on $7,700 of farm income--the difference between the maximum taxable earnings ($17, 700 in 1978) and off-farm income ($10,000). Even though Jones was able to shelter $6,867 of his farm income from the self-employment tax, the total social security contribution paid by the Jones family would have been $49 higher than the amount he would have paid on farm income only. Jones will benefit at retirement, however, because his benefit level will reflect the fact that his total income increased. As more farm families turn to off-farm employment to supplement their farm income, 4 more farm families will be faced with this tax complexity. Spousal Tax Shelter Although Wage Smith could not alter his level of contribution to the social security fund, Rural Jones could have lowered his by paying his wife part of his farm income. 5 In 4 In 1978, 46 percent of the farm operators reported that they spent the majority of their worktime in occupations other than farming. Since 1967, with the exception of 2 years, off-farm income per farm operator family has been greater than net farm income. 5 For a more detailed discussion of paying a spouse for farmwork by types of farm organization, see reference ~· Special provisions apply to sole proprietorships in community property States. The United States Court of Appeal, Ninth Circuit, has docketed Edwards et al, v. Heckler. This decision by the court will clarify the allocation of self-employment income between spouses in community property States. a sole proprietorship where one spouse is the owner and operator of the farm operation and employs the other spouse, selfemployment taxes are paid only on the operator's income; neither self-employment tax nor social security employee tax is paid on the other spouse's farm income. The splitting of income between spouses must be based upon the contributions of each; these may be in the form of labor, but also include capital such as inherited farmland. An example of a farm couple splitting farm income by ·different types of farm organizations is provided in table 3. An illustration of this spousal tax shelter can be made with the hypothetical farm family. Suppose Carol Jones made substantial labor contributions to the farm in the years 1969 and 1970; 40 percent of the farm income could have been allocated to her for those 2 years. Carol always did farmwork and could have been paid 20 percent of the farm income for 1955 through 1968. Assuming her farmwork decreased after 1970, she could have been paid 10 percent of Rural's income for the years after 1970. If the Joneses had elected to pay Carol for her labor contributions throughout the years, their total self-employment tax would have been lowered by 12.8 percent to $12,889, a savings of $1,884. The J oneses' retirement benefits, however, would have been lowered by over $90 per month to $759. If the Joneses had taken the amount of money they did not pay as self-employment tax for each year and placed it into a savings account, the principal in the account would have been about $3,000 today. 6 6 Farm families are not likely to have started a savings account for retirement purposes, especially in the fifties. Studies in four States between 1951 and 1954, a period prior to the inclusion of farm operators into the social security program, indicate that two-thirds of the farmers had not made retirement plans and that only onehalf thought they would be able to finance their retirement from farming C..!.• _!, ~. .!.Q_). The present value of the savings account was calculated by use of 4-1/2 percent compound interest factors. 1984 No.3 Family Economics Review 5 The social security program is not just a retirement or annuity plan, however. Some risk is assumed by the farm family when the farm income is divided between the farm spouses. Since the benefits are determined by the earnings record, a premature death by the self-employed farm operator might lower the survivor benefits that his family would receive. Also, disability and medical benefits provisions of the social security program are of major importance to farmers who work in the second most dangerous occupation CJ_). Premiums for private insurance are high. PROGRAM CHANGES TO INCLUDE SPOUSES The disability and survivorship benefits of social security are payable upon injury or death of the self-employed farm operator. With the exception of spouses working for farm corporations or farm partnerships, farm families cannot obtain social security benefits based on the spouse's paid or unpaid farmwork. When the farm spouse dies or becomes disabled, the farm operator may need to replace the farm labor of the spouse with hired labor, thereby ra1smg farm expenses and lowering family income. Even though 95 percent of U.S. farms are operated by men, research has shown that farm women make a substantial contribution to farmwork (_~) and that wives of farmers have some risk of permanent injury from the farmwork they perform (table 4). Although some farm families are eligible to receive benefits for the loss of the wife's income, these benefits are generally based upon the wife's off-farm earnings. Data from the 1980 National Farm Women Survey show that slightly less than one-half of the married women interviewed stated they were eligible to receive social security benefits based on their individual earnings record. The majority of farm women obtained their credits through off-farm employment; others were entitled as a result of selfemployment or employment with their farm corporations or certain types of farm partnerships. Wives of self-employed farm operators are regarded, for social security purposes, as unpaid family workers or homemakers even if they perform farmwork and are paid for their Table 3. Social security employee tax or self-employment tax for a farm couple by type of farm organization, 1984 Wife Type of fann organization Tax Income Tax Tax rate paid rate Percent Dollars - - Percent Sole proprietorship •••••••• NA 0 NA 11.3 Do •••••••••••••••••••• NA 16,000 NA 11.3 Partnership: Wife not a partner ••••••• 26.7 16,000 1,072 11.3 Wife is a partner •••••••• 11.3 16,000 1,808 11.3 Corporation ............... 26.7 16,000 1, 072 2 6. 7 1 In 1984 the self-employed pay 11.3 percent on income up to a a maximum tax of $4, 271.40. 2 The farm business as employer also contributes 7. 0 percent. NA = not applicable. 6 Family Economics Review 1984 No.3 Husband Total tax Income Tax paid paid - - - - Dollars - 40,000 1 4,271 4,271 24,000 2, 712 2,712 24,000 2,712 3,784 24,000 2,712 4,520 24,000 1,608 2,680 maximum base of $37,800 for labor. Several recent proposals 7 designed to address the exclusion of homemakers from social security will have an impact on farm women, if enacted. Evaluations of these proposals generally focus on problems associated with the valuation of the work of the homemaker. Although farm spouses as homemakers share many of the same problems nonfarm homemakers have with social security exclusion, many farm women perform work that can be valued in the marketplace. These wives, however, have the value of their labor, in the form of farm income, credited to their husbands. The following two proposals are examined with respect to their effects on the spouses of self-employed farm operators. The first proposal does not attempt to value household work; the second proposal requires setting a specified dollar value for work performed in the home. 7See Social Security and the Changing Roles of Men and Women (13) for a detailed description of earnings sharing, homemakers credit, and other proposals. "Earnings sharing," a system of splitting earnings credits for years of marriage, is currently being considered in Congress as S.3 (Senate bill) and H.R.2742 (House bill). The proposal requires that earnings of spouses be shared equally and benefits be based on the individual's earnings record. Although there are several interpretations of this proposal, earnings sharing would eliminate some of the inequities caused by the spousal tax shelter. For example, earnings sharing would allow Carol Jones of the hypothetical farm family to build an earnings credit record based on one-half of the farm income. Farm income could not be sheltered by paying income to Carol, thus requiring the Joneses to pay self-employment tax on all farm income. But the Joneses' social security benefit level at retirement would be higher ($852 rather than $759 with the tax shelter). Susan Smith, the nonfarm homemaker, would receive credit under earnings sharing for one-half of Wage's earnings. The Smiths' level of benefits would not change under some interpretations of earnings sharing. Earnings sharing will also Table 4. Farm and ranch work injuries by residency and severity Residency Husband ••••••••••••••••••• Wife •••••••••••••••• • • • • • • • Son •................ · • • • • • Daughter .. ................ Full-time employee ••••••••• Part-time employee ........ Other .••.•..•....•....•••. Total .............•...... All injuries 43.4 10.4 17.0 2.6 12.9 9.4 4.3 100.0 Slight 1 40.1 8.8 16.7 2.3 16.8 11.9 3.4 100.0 Severity Severe2 Permment 3 Percent 44.1 11.5 17.3 2.7 11.3 8.4 4.7 100.0 56.1 6.1 19.7 1.5 6.1 6.1 4.4 100.0 1 A slight injury includes minor cuts, sprains, burns, etc. 2A severe injury includes a broken bone, cut ligament, sprained back, etc. Fatal 4 47.6 0.0 19.1 o.o 4.8 14.3 14.2 100.0 3A permanent injury indicates some kind of crippling, such as loss of hand, finger, sight, or use of limb(s). 4 A fatal injury is one that results in a death during the survey period. Source: Hanford, William D., and others. 1982. 1982 Farm Accident Survey Report, National Safety Council, Chicago, Ill. 1984 No.3 Family Economics Review 7 allow a spouse, upon divorce, to keep the credit earned during the years of her marriage. "Homemaker credit" allocates social security credits to an individual for work done in the home. An imputed dollar value for services performed in the home would be determined and credited to her although no income was paid for her work in the household. Homemaker credit would be helpful to women who enter and exit the labor market during various phases of their family lifecycle. This proposal would also be helpful to women who dissolve their marriages before their husbands retire, and to families with disabled homemakers. Depending upon the individual circumstances, retirement benefits for a married couple may or may not be affected by the addition of homemaker credits to the homemaker's personal earnings record. Under the homemaker credit system Susan Smith, the full-time homemaker, would have the value of her household work included in her personal earnings record. Carol Jones, who spent part of her time in farmwork, would not receive credits as a full-time homemaker. Her "credit" for household work would be similar to that given to a woman in paid employment. Since "home maker credit" is intended to address only the household work problem, Carol would not receive credit as an individual for the value of her farmwork. LITERATURE CITED 1. Adkins, William G., and Joe R. Motheral. 1954. The Farmer Looks at His Economic Security. Bulletin 774. Texas Agricultural Experiment Station, Texas A&M College System, College Station, Tex. 2. The Advisory Council on Social Security to the Senate, Committee on Finance. 1949. Recommendations for Social Security Legislation. Senate Document No. 208. 3. Galloway, Robert E. 1955. Farmers' Plans for Economic Security in Old Age. Bulletin 626. Kentucky Agricultural Experiment Station, University of Kentucky, Lexington, Ky. 4. Levy, Marcia. 19 7 4. Self -employment in the Covered Work Force. U.S. Department of Health, Education, and Welfare 8 family Economics Review 1984 No.3 [now known as U.S. Department of Health and Human Services], Social Security Administration, DHEW Publication (SSA-75-11853) Staff Paper No. 19. 5. McKain, Walter C., Jr., Elmer D. Baldwin, and Louis J. Ducoff. 1953. Old Age and Retirement in Rural Connecticut. Bulletin 299. Storrs Agricultural Experiment Station, College of Agriculture, University of Connecticut, Storrs, Conn. 6. National Commission on Social Security Reform. 1983. Report of the National Commission on Social Security Reform. 7. National Safety Council. 1983. Accident Facts: 1983 Edition. Chicago, Ill. 8. Scholl, Kathleen K. 1982. Household and farm task participation of women. Family Economics Review 1982(3): 3-9. U.S. Department of Agriculture, Agricultural Research Service. 9. Scholl, Kathleen K. 1983. Classification of women liS farmers: Economic implications. Family Economics Review 1983(4):8-17. U.S. Department of Agriculture, Agricultural Research Service. 10. Sewell, William H., Charles E. Ramsey, and Louis J. Ducoff. 19 53. Farmers Conceptions and Plans for Economic Security in Old Age. Research Bulletin 182. Agricultural Experiment Station, University of Wisconsin, Madison, Wis. 11. U.S. Department of Agriculture, Economic Research Service. 1982. Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics, 1981. ECIFS 1-1. 12. U.S. Department of Commerce, Bureau of the Census. 1983. Money income of households, families, and persons in the United States: 1981. Current Population Reports. Consumer Income, Series P-60, No. 137. 13. U.S. Department of Health, Education, and Welfare [now known as U.S. Department of Health and Human Services]. 1979. Social Security and the Changing Roles of Men and Women. CORRECTION Please note the following corrections to issue 1983(4) in the article "Classification of Women as Farmers: Economic Implications." In all farm partnerships, regardless of whether or not a nonfamily member is a partner, the spouse pays social security tax. Table 1, P• 13, should be as follows (also note update of this table with the 1984 tax rates on p. 6 of this issue): Table 1. Social security employee ta.r or self-employment ta.r for a farm couple by type of farm organization, 1983 Wife Husband Total Type of farm organization armunt Tax Income Alrount Tax Income Aloount paid rate paid rate paid -Pe-rce-nt Dollars - - Percent Dollars - Sole proprietorship .•.•••••• NA 0 NA 9.35 40,000 13,338 3,338 Do ••••••••••••••••••••• NA 16,000 NA 9.35 24,000 2, 244 2,244 Partnership: Wife not a partner ........ 26.7 16,000 1,072 9 . 35 24,000 2,244 3,316 Wife is a partner ••••••• •• 9.35 16,000 1,496 9.35 24' 000 2,244 3,740 Corporation ••••••••..•••••• 26.7 16,000 1,072 26.7 24,000 1,608 2,680 1The self-employed pay 9. 35 percent on income up to a maximum base of $35,700 for a maximum tax of $3,337.95. 2The farm business as employer also contributes 6. 70 percent. NA = not applicable. P. 12, 2nd column, 3rd paragraph, should read as follows: "In a partnership arrangement, if the wife is a partner, self-employment taxes are paid on the income. In a partnership in which the husband is a partner and the wife is not, if she is an employee of the partnership, social security contributions are withheld from her pay at the employee rate and the partnership, as the employer, contributes at the employer rate." P. 13, 1st column, lines 9 and 10, delete the following: "and a partner who is not a member of the family." 1984 No.3 Family Economics Review 9 Developments in Consumer Product Standards By Frankie N. Schwenk Home economist Standards are among the oldest forms of consumer and producer protection. As early as 7000 B.C., the Egyptian cubit stone was used as a standard unit of measure, and by 45 B.C. Julius Caesar had mandated the 365!,;-day calendar. Today, standards cover a wide range of consumer products. Recent developments in the standards field include increased consumer participation on committees that prepare standards, and a shift by the Federal Government toward voluntary standards and away from mandatory standards. Product Standards A standard is an agreed upon procedure or material or a fundamental unit of measure (see box for types of standards). It may be mandatory or voluntary. Mandatory standards are those enforced by local, State, or national government agencies. They may have been written by a government agency or may be a standard that was written as a voluntary standard, then adopted and enforced by a government agency. TYPES OF STANDARDS The Consumer Product Safety Commission's (CPSC) mandatory standards include those on power mowers, cribs, toys, cellulose insulation, fabric flammability, 1 and child-resistant bottle closures. The Federal Trade Commission (FTC) enforces mandatory standards for labels on the care of clothing and information labeling on energy costs of appliances. The Food and Drug Administration has established standards for microwave ovens, food products, and medical devices. Other agencies that enforce mandatory standards include the Environmental Protection Agency, Occupational Safety and Health Administration, Federal Communications Commission, and Nuclear Regulatory Commission. States have mandatory standards for weights and measures and some standards for services and products, such as energy efficiency standards for major home applicances. The energy efficiency standards are part of building codes, energy codes, or rulings of public utility commissions. Local governments may also enforce mandatory standards, such as building codes. 1 For further information, see Family Economics Review, 1983(2): 8-9. Physical measures. Definition or objects of measurement system. Example: Inch, kilogram. Standard definitions. Common language that defines product, material, system, or service. Examples: Ice cream, type A child-resistant bottle closure. Standard recommended practice or test procedures. May include sampling instructions; installation, maintenance, and operation of testing apparatus; precise procedures for apparatus, test specimens, and calculations. Example: Test for measuring bathtub slip resistance. Safety standards. May include material, design, strength, energy supply, thermal conditions, noise, reliability, durability, edges, surfaces, location, spacing, operator contact, stability, sanitation, and ultimate disposal. Examples: Match safety standard, baby cribs. Information disclosure standards. Includes quality certification and information labeling. Example: Underwriter Laboratories label. Specifications and classifications. Includes types, classes, grades, and ratings. Example: Standard tables for classifying manmade and natural fibers. 10 Family Economics Review 1984 No.3 Voluntary standards are those where participation is voluntary in both the development and use of the standards. They may be used in business contracts, sales agreements, or product design. Examples of voluntary standards developed recently include standards on video magnetic recording tape dimensions, laminated hardwood flooring classifications, and dehumidifier safety. There are more than 400 organizations in the United States that write voluntary standards. These include the American Society for Testing and Materials (ASTM), Association of Home Appliance Manufacturers (AHAM), American Gas Association, Underwriters Laboratories (UL), and National Fire Protection Association (NFPA). A wide range of interested parties, such as producers, trade association representatives, consumers, and representatives of government and academia, participate in the development of a voluntary standard, which increases the likelihood that the standard will be accepted and used. An example of how voluntary standards may be written is the ASTM process. ASTM operates by consensus, defined as "substantial agreement reached by concerned interests." A task group prepares a draft standard, which moves by balloting procedures through a subcommittee to the main committee and then to a membership ballot, where any of ASTM's 31,000 members can comment on the proposed standard. At each level of balloting, there are requirements for the number of ballots returned, the number of ballots cast affirmatively, and discussion of each negative ballot. ASTM standards-writing committees operate under established rules such as the following: The number of producer members must not exceed the number of nonproducer members. Membership must be open to all qualified individuals. All negative votes must be considered by the originating subcommittee. If judged persuasive, the document is rewritten. All committee meetings considering technical matters must be open to visitors. All standards actions must be equitable, meaning every organization, large or small, and every individual is given a vote (!). The American National Standards Institute (ANSI) plays a prominent role by coordinating activities of standards developing organizations. Standards developed by ASTM or other organizations that prepare standards may be submitted to ANSI for acceptance as an American National Standard. The 1984 Catalog of American National Standards lists 9, 000 standards. American National Standards often become voluntary international standards issued by the International Organization for Standardization (ISO). ANSI is the u.s. member of ISO and manages and coordinates U.S. participation in ISO activities. Consumer Participation in Standards Development Home economists, with an understanding of consumers' viewpoints, have been making contributions to standards development for years. In the twenties, American Home Economics Association representatives were involved with safety codes for mechanical refrigerators. In the thirties, home economists helped develop standard sizes for children's garments and testified at FTC hearings on labeling rules for rayon, cotton, silk, and wool. In the next two decades, contributions were made to standards for cooking utensils, nylon hosiery, dress sizes, flat irons, and electric ranges (_!, pp. 66, 84, 129). Recently, home economists have served on the ANSI Consumer Interest Council and the ANSI Standards Screening and Review Committee that reviews all consumer standards submitted to ANSI. In ASTM, membership of the Consumer Products Standards Committee F-15 includes home economists from Cooperative Extension, universities, secondary schools, businesses, and consumer organizations. 1984 No.3 Family Economics Review 11 Other than the long-term involvement of home economists, however, consumers and consumer organizations have not been well represented in the standards development process. One of the new trends in standards development is the effort of organizations that prepare standards to increase consumer participation. A plan to include more consumers and representatives from consumer organizations was implemented by the National Consumer League (NCL) and ASTM in 1978. NCL agreed to provide consumer representatives on designated committees and to be responsible for their selection and training (1, p. 120). ASTM underwrote the expenses of the participants. In addition to including consumer representatives on more committees that prepare standards, several consumer sounding boards have been established. ANSI coordinates this program. ASTM, UL, AHAM, NFPA, and the National Bureau of Standards sponsor boards composed primarily of consumers who are able to view a product from a user's point of view. Members discuss their experiences in using a product, and their reactions and recommendations are fully considered by the standards-developing groups that request the sounding. For example, a sounding board in Maryland met to discuss the standard for Energy Guide labels required by the FTC for certain major appliances. The board is sponsored by the Office of Consumer Affairs, U.S. Department of Commerce, and AHAM conducted the sounding. The sounding board members felt the Energy Guide labels should be continued but revised to show the estimated amounts of energy an appliance uses annually rather than operating costs, since costs change with inflation. The sounding board has also met to discuss a CPSC consumer information brochure on kerosene heaters. CPSC conducted the sounding, and representatives of NFPA, UL, and the National Kerosene Heaters Association attended. While consumers and consumer representatives may not always have the technical expertise to address some aspects of the 12 Family Economics Review 1984 No.3 standard, they bring an important perspective. They help provide the balance of interests needed to develop a standard that provides safety, information, or convenience for the consumer, yet is accepted and used by the producer. The Shift to Voluntary Standards It is the policy of the Federal Government to rely on voluntary standards whenever feasible in its procurement and regulatory activities. Circular A-119, entitled Federal Participation in the Development and Use of Voluntary Standards, issued by the Office of Management and Budget on October 26, 1982, outlined this policy (_~_). The circular calls for the use of domestic and international voluntary standards for procurement of goods and services for Federal Government use, and encourages participation by Federal agency employees in voluntary standards activities to help eliminate the necessity for development and maintenance of separate Government standards. The circular also requires agencies responsible for developing Government standards to review existing standards at least every 5 years and cancel those for which appropriate voluntary standards can be substituted. Agencies that enforce regulatory standards are becoming more involved in the voluntary standards development process and are using voluntary standards more. For example, CPSC rules and regulations state the following: "Voluntary standards now stand alongside mandatory standards activities as integral parts of ongoing Commission hazard programs" (_~_). CPSC is working with ANSI on a pilot program to promote voluntary standards. Also, CPSC is choosing the use of voluntary standards instead of mandatory standards on some products, such as toy chests. Mandatory standards have the advantage of covering all producers, which may be essential for a product where a serious safety problem exists. However, since standards often need frequent revision, the costs of developing and maintaining a large number of standards can be a financial burden to a Government agency. Voluntary standards, when developed by a committee that is varied and balanced, may be workable and satisfy the concerns of many interests. If the committee composition or the process is not adequate, however, it is possible to construct a standard that restricts competition or acts as a trade barrier, or is inadequate to provide health and safety protection. Also, because use of the standard is voluntary, it is possible that the producer with the product that most needs the standard will not choose to use that standard. Whether mandatory or voluntary, wellwritten standards provide ·protection, information, and convenience to consumers. Simplification for consumers and lower inventories for merchants have resulted from standardization of sizes. Useful information results from standards for classification and labeling, such as the new standard on wallcovering. Safety and health are protected by standards such as the carriage and stroller standards recently developed. Performance, reliability, or quality control are improved by standards such as the standard on insulated steel doors presently being considered. LITERATURE CITED 1. The American Society for Testing and Materials. [No date]. Standardization Basics. Philadelphia, Pa. 2. Angevine, Erma. 1982. Development of standard setting: Government and voluntary. In Erma Angevine, editor. Consumer Activists: They Made a Difference. Consumers Union, Mt. Vernon, N.Y. 3. Consumer Product Safety Commission. 1981. Voluntary standards activities; modification of policy. Rules and Regulations. Federal Register 46(107): 29930. 4. Pundt, Helen. 1980. AHEA--A History of Excellence. The American Home Economics Association. 5. U.S. Office of Mangement and the Budget. 1982. Federal Participation in the Development and Use of Voluntary Standards. Circular A-119. Child Cost User Data Updated to 1983 By Carolyn Summers Edwards and Linda J. Beckham Economist and social science aid The USDA estimates of the cost of raising a child are updated semiannually. Estimates for children in urban and rural nonfarm families living in the four regions of the country and spending at the moderate cost level are published regularly in Family Economics Review. Costs updated to annual average price levels appear in issue No. 2; costs updated to June price levels appear in issue No. 4. 1 Users of the estimates frequently request information on their use and interpretation. USDA Miscellaneous Publication No. 1411 (MP 1411) 2 provides descriptive information on the estimates as well as instructions on how to adjust the estimates for application to specific problems. Presented here are five of the tables from MP 1411 updated to 1983 price levels. Table 1 provides updated information for selecting the appropriate cost level. Table 2 includes Consumer Price Index data for adjusting the price levels of the estimates to recent years. Table 3 presents an example of the effects of backdating and projecting the child cost estimates; estimates for a child in an urban, north-central family spending at the moderate cost level are adjusted to show current dollar costs for a child born in 1966 and a child born in 1984. Tables 4 and 5 provide updated information on spending for child care and costs of higher education, respectively. 1 Estimates for children in farm families or for families spending at other cost levels are available from the Family Economics Research Group, Room 442A, Federal Building, Hyattsville, Md. 20782. 2 USDA Estimates of the Cost of Raising a Child: A Guide to Their Use and Interpretation, 1981, by Carolyn Summers Edwards. 1984 No.3 Family Economics Review 13 Users of the estimates often request information on other materials related to the child cost estimates. Therefore, recent references that are grouped into several topic areas are given below. SELECTED REFERENCES Child Care Kamerman, Sheila B. 1983. Child care services: A national picture. Monthly Labor Review 106(12): 35-39. Lueck, Majorie, Ann C. Orr, and Martin O'Connell. 1982. Trends in child care arrangements of working mothers. Current Population Reports. Series P-23, No. 117. U.S. Department of Commerce, Bureau of the Census. O'Connell, Martin, and Carolyn C. Rogers. 1983. Child care arrangements of working mothers: June 1982. Current Population Reports. Series P-23, No. 129. U.S. Department of Commerce, Bureau of the Census. Education Frankel, Martin M., and Debra Gerald, editors. 1982. Projections of Education Statistics to 1990-91. U.S. Department of Education, National Center for Education Statistics. Grant, W. Vance, and Leo J. Eiden. 1982. Digest of Education Statistics, 1982. U.S. Department of Education, National Center for Education Statistics. U.S. Department of Commerce, Bureau of the Census. 1982. Private school enrollment, tuition and enrollment trends: October 1979. Current Population Reports. Series P-23, No. 121. Indirect Costs Becker, Gary S. 1981. A Treatise on the Family. Harvard University Press, Cambridge, Mass. Chiswick, Carmel U. 1982. The value of a housewife's time. Journal of Human Resources 18(3):413-425. Gauger, William H., and Kathryn E. Walker. 1980. [revision, originally issued 1973]. The Dollar Value of Household Work. New York State College of Human Ecology Information Bulletin No. 60. Ithaca, N.Y. 14 Family Economics Review 1984 No.3 Juster, F. Thomas, and Frank P. Stafford. [In press]. Time, Goods and Well-Being. Institute for Social Research. Ann Arbor, Michigan. Peskin, Janice. 1983. The value of household work in the 1980's. Paper presented at the 1983 Annual Meeting of the American Statistical Association. [Toronto, Canada.] Virginia Polytechnic Institute and State University, Virginia Agricultural Experiment Station. 1981. Family Time Use: An Eleven State Urban/Rural Comparison. Bulletin VPI-2. Blacksburg, Va. U.S. Department of Agriculture, Agricultural Research Service. 1982. Special Issue: Household Production. Family Economics Review 1982(3). Expenditure Patterns Robey, Bryant, and Cheryl Russell. 1983. How consumers spend. American Demographics 5(10): 17-21. U.S. Department of Labor, Bureau of Labor Statistics. 1983. Consumer Expenditure Survey, Diary Survey. Bulletin 217 3. USDA Food Plans Cleveland, Linda E., and Betty B. Peterkin. 1983. USDA 1983 Family food plans. Family Economics Review 1983(2): 12-21. Kerr, Richard L., Betty B. Peterkin, Andrea J. Blum, and Linda E. Cleveland. 1984. USDA 1983 Thrifty food plan. Family Economics Review 1984(1): 18-25. The Changing American Family Bianchi, Suzanne M., and Daphne Spain. 1983. American Women: Three Decades of Change. CDS 80-8. U.S. Department of Commerce, Bureau of the Census. Glick, Paul C. 1984. How American families are changing. American Demographics 6(1): 20-25. Lowenstern, Henry, editor. 1983. Special section: Families. Monthly Labor Review 106(12):16-44. Masnick, George, and Mary Jo Bane. 1980. The Nation's Familes: 1960-1990. Joint Center for Urban Studies of MIT and Harvard University, Cambridge, Mass. [See abstract, Family Economics Review 1983(3): 20.] National Center for Health Statistics. 1982. Working Women and Childbearing: United States. Series 23, No. 9. U.S. Department of Health and Human Services, Public Health Service. [Data from the National Survey of Family Growth.] Payton, Isabelle S. 1982 •. Single-parent households: An alternative approach. Family Economics Review, winter issue, pp. 11-16. [Plus correction 1982 ( 4): 39.] U.S. Department of Agriculture, Agricultural Research Service. Watts, Harold W., and Donald J. Hernandez, editors. 1982. Child and Family Indicators: A Report with Recomendations. Social Science Research Council, Center for Coordination of Research on Social Indicators. Select Committee on Children, Youth, and Families U.S. House of Representatives, 98th Congress, 1st Session. 1983. Children, youth, and families: Beginning the assessment. [Hearing held in Washington, D.C., April 28, 1983.] _____ • 1983. Demographic and Social Trends: Implications for Federal Support of Dependent-Care Services for Children "and the Elderly. [A report together with additional views.] -----• 1983. Families in crisis: The private sector response. [Hearing held in Washington, D.C., July 12, 1983.] _____ • 1983. Prevention strategies for healthy babies and healthy children. [Hearing held in Washington, D.C., June 30, 1983.] -=-----· 1983. Supporting a family: Providing the basics. [Hearing held in Washington, D.C., July 18, 1983.] -----• 1983. Teen parents and their children: Issues and programs. [Hearing held in Washington, D.C., July 20, 1983.] _____ • 1983. U.S. Children and Their Families: Current Conditions and Recent Trends. A report together with additional views, May 1983. _____ • 1984. Federal Programs Affecting Children. [A report together with supplemental views. 1 Child Support Sanders, Ruth. 1981. Child support and alimony: 1978. Current Population Reports. Series P-23, No. 112. U.S. Department of Commerce, Bureau of the Census. _____ • 1983. Child support and alimony: 1981 (advance report). Current Population Reports. Series P-23, No. 124. U.S. Department of Commerce, Bureau of the Census. Research on the Cost of Raising a Child Boulier, Bryan L., and Robert A. Sylvester. 1983. Equivalence scales and estimates of the cost of children for the United States. Paper presented at the 53d Annual Conference of the Southern Economic Association. [Washington, D.C., November 22, 1983.] Edwards, Carolyn S. 1981. The cost of raising a child. American Demographics 3(7):24-29. _____ , Janet S. Marr, and Brucy C. Gray. 1982. The development of the USDA estimates of the cost of raising a child. Social Indicators Research 10(3): 227-271. Espenshade, Thomas J. 1984. Investing in Children: New Estimates of Parental Expenditures. The Urban Institute Press, Washington, D.C. Olson, Lawrence. 1983. Costs of Children. Lexington Books, Lexington, Mass. The Cost of Having a Baby Health Insurance Association of America. 1982. The Cost of Having a Baby. Washington, D.C. [See abstract, Family Economics Review 1984(3):19.] 1984 No.3 Family Economics Review 15 Table 1. Food plans 1 and child cost estimates, by size and income of family, 1983. Family size Income before taxes !-person 2-person 3-person 4-person 5-person 6-person Under $5,000 ••••••••••••• T T T T T T $5,001-$10,000 ••••••••••• L L Tor L T T T $10,001-$15,000 •••••••••• M Lor M Tor L Tor L T T $15,001-$20,000 •••••••••• M or Li Lor M Tor L Tor L T or L Tor L $20,001-$30,000 •••••••••• Li M L L Tor L Tor L $30,001-$40,000 •••••••••• Li M or Li M Lor M L L $40,001-$50,000 •••••••••• Li Li M or Li Lor M Lor M Lor M $50,001-$65,000 •••••••••• Li Li Li M Lor M Lor M $65,001-$80,000 •••••••••• Li Li Li Li M L or M $80,001-$95,000 •••••••••• Li Li Li Li Li M or Li $95,001 or more •••••••••• Li Li Li Li Li Li lT = thrifty, L =low, M = moderate, and Li = liberal. Table 2. Annual average Consumer Price Index (CPI) data for updating and backdating estimates of the cost of raising children [1967=100] Child cost budget category Food at home ••••••••••••• Food away from home ••••• Clothing ................ . Housing •................. Medical care ••••••••••••• Education •............... Transportation ••••••••••• Other ............•....... Annual totals of all budget item categories CP1 1 subindex Food at home ••••••••••• Food a way from home ••• Apparel and upkeep •••• Housing ............... . Medical care ••••••••••• Personel and educa-tional expenses ••••••• Transportation ••••••••• Personal care and personal and educational expenses average .............. . All items ••••••••••••••• 1980 251.2 270.1 177.4 263.2 267.2 236.4 250.5 224.6 247.0 1981 269.3 293.7 186.6 293.2 295.1 266.5 281.3 248.2 272.3 1Revised CPI for urban wage earners and clerical workers ( CPI-W). Source: U.S. Department of Labor, Bureau of Labor Statistics. 16 Family Economics Review 1984 No.3 1982 278.3 309.6 190.9 314.7 326.9 302.4 293.1 274.4 288.6 1983 281.3 323.2 195.6 322.0 355.1 335.1 300.0 297.1 297.4 Table 3. Current dollar estimates 1 of the cost of raising a child 2 born in 1966 and in 1984 at the moderate cost level in the urban North Central region Year Age of child (years) Total Food at home 3 Food away from heme Clothing Housing 4 Medical Educa- Transpor- Other 5 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 Total 1966-83 •• 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Total 1984-2001 Under 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Under 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 $1,316 1,397 1,372 1,~48 1,620 1,688 1,829 2,027 2,254 2,463 2, 713 2,886 3,366 3,827 4,282 4,698 5,469 5,643 50,298 4,312 4,664 4, 561 4,789 5,327 5, 593 6,118 6,678 7,012 7,364 8,031 8,431 9,456 10. 17 5 10' 68 5 ll, 217 12,933 13. 581 140,927 $194 238 245 257 310 317 321 460 528 572 695 736 831 1,023 1,105 1,185 1,371 1, 385 11,773 571 736 773 812 979 1,028 1,044 1,352 1,419 1,490 1,863 1,956 2,099 2,449 2,572 2,700 3,174 3,333 30,350 care Cost of raising a child born in 1966 6 0 0 0 0 $50 53 55 59 66 73 78 84 109 122 135 147 155 162 1,348 $66 69 ll8 125 130 134 190 197 2ll 221 229 239 357 373 397 418 592 607 4,673 $539 555 508 541 580 606 598 624 697 772 820 877 971 1,090 1, 262 1,406 1, 562 1,598 15,606 $70 75 79 85 90 96 99 103 112 126 138 151 164 179 199 220 244 265 2,495 Cost of raising a child born in 1984 7 0 0 0 0 172 181 190 199 209 220 231 242 305 321 337 354 371 390 3, 722 142 149 254 266 279 293 426 448 470 494 518 544 826 867 911 956 1,391 1,461 10,695 1,876 1,970 1, 819 1,910 2,005 2,105 2,095 2,200 2,310 2,425 2,547 2,674 2,911 3,057 3,210 3,370 3,663 3,846 45,993 278 292 307 322 338 355 373 391 411 432 453 476 500 525 551 578 607 638 7,827 tion tion 0 0 0 0 0 0 $43 44 47 51 53 56 70 76 83 94 107 ll8 842 0 0 0 0 0 0 166 174 183 192 202 212 222 234 245 258 270 284 2,642 $267 275 247 257 270 284 287 296 330 361 397 424 478 548 645 724 832 852 7,774 866 910 832 874 918 964 1,012 1,062 1,115 1,171 1,230 1, 291 1,456 1,528 1,605 1,685 1,953 2,050 22,522 $180 185 175 183 190 198 236 244 263 287 303 319 386 416 456 504 606 656 5,787 579 607 576 605 636 667 812 852 895 940 987 1,036 1,137 1,194 1, 254 1,316 1,504 1,579 17,176 1 Derived from table 8 of USDA Miscellaneous Publication No. 1411, USDA Estimates of the Cost of Raising a Child: A Guide to Their Use and Interpretation, October 1981, by Carolyn s. Edwards. 2 Child in family of husband and wife and no more than 5 children. 3 Includes home-produced foods and school lunches. 4 lncludes shelter, fuel, utilities, household operations, furnishings, and equipment. 5 Includes personal care, recreation, reading, and other miscellaneous expenditures. 6 Prices current in the years specified; calculated using indexes in table 2 rounded to nearest $1. 7 lnflated from 1983 constant dollar estimates at annual rate of 5 percent and rounded to nearest $1. 1984No.3 Family Economics Review 17 Table 4. Spending for child care by families with at least 1 member under 6 years old Nuni:>er of families with Proportion of Expenditures for child care Family type at least 1 families merrber Wlder reporting Average annual As proportion 6 years old arooWlt 1 of all family spending2 Thousands Percent Dollars Percent All families ............... 13,570 60 649 2.9 Husband-wife family ••••• 11,814 62 607 2.6 Nonblack •••••••••••••• 10,633 63 585 2.5 Black .•.•.••...•.••... 1,180 50 845 3.9 Wife employed ••••••••• 5,022 71 894 3.9 Wife not employed ••••• 6,536 55 312 1.3 Single-parent family ••••• 1, 756 48 1,024 7.3 Non black .............. 1,116 54 1,147 7.9 Black •••••..••......•. 641 39 724 5.7 Parent employed ••••••• 982 63 1,241 8.4 Parent not employed ••• 736 27 274 2.5 1Data derived from Public Use Tapes, Consumer Expenditure Survey--1972-73, U.S. Department of Labor, Bureau of Labor Statistics. All expenditure averages are based on only those families reporting child care expenditures. Figures are updated to 1983 annual average prices. 2Includes spending for food, alcoholic beverages, tobacco products, housing, clothing, drycleaning and laundry, transportation, health care, personal care, recreation, reading, education, and miscellaneous; excludes personal insurance, retirement, pensions, gifts, and contributions. Source: Updated from Epstein, Marsha Freeman, and Cynthia L. Jennings, 1979, Child care: Arrangements and costs, Family Economics Review, fall issue, pp. 3-6. 18 Fam i l y Ec o n om ics Re v i ew 1984 No . J Table 5. Estimated undergraduate tuition and fees, and board and room rates in institutions of higher education, 1983-84. Type and control Tuition and Board Dormitory Total tuition, of institutions required fees (7-day roans board and roan basis) All public institutions .............. $870 $1,210 $1,080 $3,160 Universities ....................... 1,270 1,250 1,150 3,670 Other 4-year •••••••••••••••••••••• 1,020 1,180 1,060 3,260 2-year ............................ 510 1,240 810 2,560 All nonpublic institutions ........... 4,880 1,390 1,270 7,540 Universities ....•.................. 6,140 1,610 1,560 9,310 Other 4-year ...................... 4, 750 1,320 1,160 7,230 2-year ............................ 3,300 1,260 1,260 5,820 Source: U.S. Department of Education, National Center for Education Statistics, [forthcoming.] Digest of Education Statistics 1983-84, table 129. Cost of Having a Baby This publication from the Health Insurance Association of America reports the results of a 1982 survey of costs associated with having a baby. Average costs of a maternity hospital stay and professional services are itemized for a usual and for a cesarean delivery in urban and rural areas for four regions and the United States as a whole. The average length of a stay in a hospital or birth center for childbirth under the care of a midwife and the cost of midwife professional services are also provided for urban and rural areas by region and the total United States. The average cost of a hospital stay in the United States was about $1,420 for a usual delivery in a birthing room and $1,450 for a usual delivery with labor and delivery rooms. Professional services for a usual delivery averaged about $642. The average cost was about $2,512 for the hospital stay and $828 for professional services for a cesarean delivery. The average cost of a basic layette, including baby's wardrobe and nursery items, nursery funishings, feeding equipment, bath items, and other miscellaneous costs, was priced at $851. A maternity wardrobe was estimated at $235 but could be more costly for employed mothers-to-be. Copies of this report may be obtained free of charge from Information, Reference, and Statistical Services, Public Relations Division, Health Insurance Association of America, 1850 K Street, N. W., Washington, D.C. 20006. 1984 No.3 Family Economics Review 19 Some New USDA Publications The following are for sale from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402, (202) 783-3238. 1983 YEARBOOK OF AGRICULTURE: USING OUR NATURAL RESOURCES. January 1984. Stock No. 001-000- 04387-1. $7. COMPOSITION OF FOODS. Revised August 1983. Stock No. 001-000- 04368-4. $7.50. FOOD CONSUMPTION: HOUSEHOLDS IN THE NORTH CENTRAL REGION, SEASONS AND YEAR 1977-78. August 1983. Stock No. 001-000-04374-9. $7.50. FOOD CONSUMPTION: HOUSEHOLDS IN THE NORTHEAST, SEASONS AND YEAR 1977-78. November 1983. Stock No. 001-000-04373-1. $7.50. FOOD CONSUMPTION: HOUSEHOLDS IN THE SOUTH, SEASONS AND YEAR 1977-78. August 1983. Stock No. 001-000-04375-7. $7.50. SCOPE AND METHODS OF THE STATISTICAL REPORTING SERVICE. Revised September 1983. Stock No. 001-000-04369-2. $5.00. An Aging Society 1 As of 1982, 11 percent of all Americans were age 65 and over. By the year 2025 this figure is projected to be 19 percent, and by the year 2050, one-third of the total population will be age 55 and older. Dramatic increases will occur particularily in the number of aged and very old persons, with the 85-and-over ca.tegory being the fastest 1 This report refers to the "older" population as age 55 and over, the "elderly" age 65 and over, the "aged" 75 years and over, and the "very old" 85 years and over. 20 Family Economics Review 1984 No.3 growing segment of the older population. The steady increase in the number of births that occurred prior to 1920 and following World War II is the primary cause of this trend. A secondary cause is increasing longevity. Overall life expectancy was 49 years in 1900, 70 years in 1954, and 74 years in 1981. Elderly women live longer than elderly men and currently outnumber them 3 to 2. This makes the health, social, and economic problems of the elderly mostly problems for women. Although their relative economic position has improved since 1970, incomes for the elderly still fall far below their younger counterparts. For example, in 1981 the median income for men age 65 and over was $8,200, compared with $15,000 for men age 60 to 64 and $21,000 for men age 45 to 54. Three-fourths of all elderly persons had incomes under $10,000 in 1981, whereas only 7 percent had incomes over $20,000. Although income is not a precise measure of economic well-being, statistics show the economic position of the elderly to be lower and less secure than that of the younger population. Social security is the single largest source of income for the elderly (over 91 percent receive benefits), but earnings make the greatest difference in their economic position. Those working year round, full time have incomes close to those of younger persons. However, labor force participation by elderly men has dropped rapidly in the last 30 years, from almost 50 percent in 1950 to less than 20 percent in 1981. Labor force participation by elderly women, however, has changed very little; it was 10 percent in 1950 compared with 8 percent in 1981. For older women t~ose age 55 to 64, labor force participa~ bon has steadily increased, from 27 percent in 1950 to 42 percent in 1982. Unemployment for the elderly is low (4. 7 percent for 1982). However, once the elderly lose their jobs they are more likely to stay unemployed longer, earn less in subsequent jobs, and give up looking sooner than younger persons. One out of seven elderly persons lived in poverty in 1981. Poverty rates were highest for the more aged, for women and minorities, and also for those who lived alone, lived in small towns or rural areas, were not married, did not work, and depended on social security as their sole source of income. The Government's definition of poverty is based only on money income and does not include the value of in-kind transfers. Estimating the market value of means-tested (income determined) benefits such as food stamps, subsidized housing, and medicaid is difficult and controversial. If these benefits were included, the poverty rate would change. In spite of large sums of money in the Federal budget designated for services to the elderly, poverty persists. Reasons for this include the large number of elderly below the poverty line who do not participate in the means-tested programs, and the fact that most of the money spent on the elderly goes toward social insuran·ce programs, like social security and medicare, which are not targeted at the poverty population. Also, the principle means-tested program, Supplemental Security Income, pays maximum benefits that fall below the poverty level. The elderly are healthier than sometimes assumed. Not until age 85 do half of the elderly population report being limited in carrying out a major activity. However, elderly health expenditures have climbed faster than both income and inflation. Living arrangements of the elderly differ greatly between men and women. Threefourths of all elderly men are married and living with their wives, whereas half of elderly women are widowed and a substantial proportion live alone. Source: U.S. Department of Commerce, Bureau of the Census, 1983, America in transition: An aging society, Current Population Reports, Special Studies, Series P-23, No. 128. Health Care Expenditures for the Elderly-Medicare Coverage In 1980 medicare spent almost $31 billion on health care for persons 65 years of age or over (the elderly). This accounted for 45 percent of the elderly population's total health care cost, up from 35 percent in 1970. Although medicare's share of the elderly's health care expenses has increased, total health care costs have increased also. Thus, on a per capita basis, health care expenditures not paid by medicare claimed a larger share of the elderly's total income in 1980 than in 1970 (up to 19 percent from 17 percent of total income). In 1965, prior to medicare, the elderly paid about 20 percent of their income for health care. Despite significant increases in the cost of hospital care, medicare has increased its original share of hospital expenditures, covering 74 percent of hospital bills in 1970 and 82 percent in 1980. When hospital costs are considered as a percentage of the elderly's income, the amount not covered by medicare has declined from 2. 8 percent to 2.6 percent. Medicare's share of charges for physicians' services has remained the same (59 percent) between 1970 and 1980. As a result, the share of the elderly's income going to pay physicians has increased from 1.9 percent to 2.65 percent. Of the expenditures not covered by medicare, the major share is paid directly by the beneficiary. In 1980 an elderly person's total out-of-pocket payments for health expenditures not covered by medicare amounted to $768. These direct out-of-pocket payments include copayments and charges in excess of payments from medicare as well as services not covered by medicare. They do not include, however, premiums paid by beneficiaries for medicare or for private supplemental insurance. Source: U.S. Senate, Special Committee on Aging, 1982, 97th Congress, 2d Session, Health Care Expenditures for the Elderly: How Much Protection Does Medicare Provide? 1984 No.3 Family Economics Review 21 American WomenThree Decades of Change This new report published by the Bureau of the Census focuses on demographic, economic, and social changes experienced by American women. Data from 1950 through 1980, extracted from a variety of census sources, are analyzed to study changes in marital status, fertility, living arrangements, education, occupation, and income. Recent trends toward marrying later and more frequent divorces are resulting in a higher probability that women will head their own households at some time during their lives. Of all adult women, more than 25 percent headed a household in 1980, compared with 15 percent in 1950. Labor force participation by women has increased substantially and has been accompanied by changes in fertility patterns. In 1980 approximately one-half of all adult women worked outside the home; one-third worked outside the home in 1950. On the average, women are now having two children each, whereas in 1950 they were more likely to have three each. Women continue to occupy traditionally female occupations such as secretarial and clerical jobs. In addition, women still earn less than men when education and occupation are similar. In 1980 women's earnings were two-thirds those of men, reflecting no substantial change since 1950. Households headed by women account for an increasing proportion of housholds in poverty. Educational attainment of women has risen, and their college enrollment is now similar to that of men. Since 1950 the proportion of female college graduates has doubled. However, women still receive fewer professional and graduate degrees than men. American Women: Three Decades of Change, CDS 80-8, Stock No. 003-024-05743-3, is available for $3.50 from the Superintendent of Documents, U.S. Government Printing Office, Washington, D. C. 20402. 22 Family Economics Review 1984 No.3 Farm Population of the United States, 1982 About 1 out of every 41 persons, or 2.4 percent of the Nation's total population, had a farm residence in 1982. 1 Using Current Population Survey (CPS) data for a 12-month period centered on April 1982, the Bureau of the Census of the U.S. Department of Commerce and the Economic Research Service of the U.S. Department of Agriculture estimated that 5,620,000 persons lived on farms. During that period, there were 179,000 black farm residents, which represented 3.2 percent of the total farm population. In 1982 the median age of farm residents was about 35 years, as compared with 30 years for the nonfarm population. The labor force participation rate for farm residents (65 percent) was somewhat higher than the rate for nonfarm residents (62 percent). Data from the March 1982 CPS indicate that farm families were more likely than nonfarm families to include a married couple (93 percent compared with 81 percent) and less likely to have a female householder (no husband present). In 1981 the median income of farm families continued to be substantially lower than that for nonfarm families ($17,082 and $22,554, respectively). Farm families are also more likely to be in poverty than are nonfarm families; about 20 percent of farm families but only 11 percent of nonfarm families were below the poverty level in 1981. 1The farm population consists of all persons living in rural territory on places which had, or normally would have had, sales of agricultural products of $1,000 or more during the reporting year. Source: U.S. Department of Commerce, Bureau of the C~nsus, Economic Research Service, 1983, jointly with U.S. Department of Agriculture, Farm population of the United States: 1982, Current Population Reports, Farm Population, Series P-27, No. 56. Nutrient Content of the U.S. Food Supply, 1982 Changes in nutrient levels, with emphasis on fatty acids and cholesterol, are reported by Ruth M. Marston and Susan 0. Welsh in an article, "Nutrient Content of the U.S. Food Supply, 1982," which appears in the winter 1984 issue of the National Food Review (NFR-25). Nutrient levels changed 5 percent or less between 1981 and 1982. Dec~ines were reported for food energy, protein, fat, carbohydrate, iron, thiamin, riboflavin, niacin, and vitamin B 12, whereas gains were indicated for calcium and ascorbic acid. Levels for phosphorus, magnesium, vitamin A, and vitamin B6 were the same in 1981 and 1982. Changes in nutrient levels were considerably larger between 1967-69 and 1982, ranging from 1 to 14 percent higher for food energy, carbohydrate, fat, riboflavin, thiamin, niacin, vitamin B6• and ascorbic acid. Levels were 1 to 8 percent lower for vitamin A, calcium, magnesium, phosphorus, and vitamin B12· Levels for protein and iron were the same in 1967-69 and 1982, despite some fluctuation during the intervening period. A review of trends in the levels of fatty acids showed the effect of the shift from animal to vegetable sources of fat, as well as the increase in total fat level. Since the beginning of the century, the proportion of total fat from saturated fatty acids declined appreciably; the proportion from linoleic acid more than doubled, and the proportion from oleic acid remained the same. The cholesterol level of the food supply has fluctuated downward since the mid forties. During this period, it has been provided by the same four food groups (in descending order )--eggs; meat, poultry, and fish; dairy products; and fats and oils. Major Programs of the Bureau of Labor Statistics This publication provides a concise summary of the nature and scope of the major statistical programs and services of the Bureau of Labor Statistics. Descriptions of what data are available, the form of publication, some of the uses of the data, and how to obtain the data are organized into six areas as follows: Employment and unemployment, prices and living conditions, wages and industrial relations, productivity and technology, occupational safety and health, and economic growth and employment projections. A 12-page table summarizes State and area data that are available. Major Programs: Bureau of Labor Statistics, Report No. 693, is available from the Inquiries and Correspondance Section, Room 2421, Bureau of Labor Statistics, U.S. Department of Labor, Washington, D.C. 20212. 1980 Census of Population and Housing Users' Guide-Part C The Bureau of the Census has released another supplement to the Users' Guide that compliments previous releases •1 The newest volume, Part C, an Index to Summary Tape Files 1 to 4, features a subject crossreference and a key to geographic areas. These features help users locate data files quickly. The index also features a complete set of outlines of these files, which include a detailed listing of the contents of each table. Part C, Index to Summary Tape Files 1 to 4, Supplement 2, Stock No. 003-024-05771-9 is available for $4.25 from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402. Additional supplements will be made available in the future. 1 For a review of Parts A and B of the Users' Guide, see Family Economics Review 1984(2)20. 1984 No.3 fam i ly Econom i cs Rev i ew 23 New Ruling for Mortgage Insurance Premiums Home buyers financing their purchases with mortgages insured by the Federal Housing Administration of the U.S. Department of Housing and Urban Development (FHA/HUD) now have the opportunity to choose the method of paying for their mortgage insurance premiums (MIP's). 1 Effective September 1, 1983, new regulations call for a one-time charge of the entire MIP rather than monthly installments paid to the lender. Home buyers may choose to pay this one-time charge in cash at settlement or to pay a portion at settlement and finance the remainder by adding to the loan amount. Those paying more than the minimum downpayment may also choose to finance the entire MIP. The new collection system does not change the total amount paid for. the mortgage insurance, although borrowers who choose to finance all or part of the MIP are charged a higher MIP and incur a higher financing cost. There may be several advantages to this, however. First, a borrower who finances the MIP will need less cash at settlement; second, adding the MIP to the loan increases the portion of the monthly payment that qualifies as a tax deduction. Under the old regulations, the monthly MIP was a nondeductible expense at tax time. Under the new regulation, any of the MIP that is financed is amortized over the life of the loan. For example, a borrower financing the purchase of a $70,000 house with a 13 percent, 30-year fixed rate mortgage of $50,000 would have paid an initial MIP of about $21 a month in addition to monthly principal and interest payments of about $553--or a total of about $574 per month-prior to the change in regulations. Under 1 Mortgage insurance is intended to encourage lenders to make loans when the downpayment is low relative to the price of the house. Home buyers in this situation are considered high risk borrowers. Mortgage insurance offers protection to the lender against losses due to foreclosure. As the insurer, FHA/HUD promises to pay the lender most of these costs. 24 Family Economics Review 1984 No.3 the new regulation, this borrower may choose to pay a one-time premium of $1,830.50 at settlement. Monthly principal and interest payments would remain at about $553. Alternatively, the borrower could finance some or all of the MIP. Financing the total MIP, which would be $1,900, would yield monthly principal and interest payments of about $574. Deductible financing costs over the 30 years would be about $149,116 for the borrower who paid the MIP in cash at settlement and about $154,771 for the borrower who financed the entire MIP. The programs affected by the new MIP collection and calculation procedures include FHA/HUD's mortgage insurance for fixed-payment mortgages under section 203(b) of the National Housing Act, for single-family homes in outlying areas under section 203(n), and for graduated payment mortgages under section 245. Single-family mortgages subject to coinsurance are not affected by the one-time premium payment rule at this time. Source: Department of Housing and Urban Development, 1983, Office of the Assistant Secretary for Housing, Federal Housing Commissioner, One-time mortgage insurance premium, Federal Register 48 (122): 28794- 288-11. Synopsis of the Annual Energy Review and Outlook, 1982 This booklet provides historical energy statistics and projections of the Nation's energy future. It is a synopsis of two major reports produced by the Energy Information Administration of the U.S. Department of Energy--the 1982 Annual Energy Review and the 1982 Annual Energy Outlook. Historical statistics for the period 1960-82 are provided for energy supply and consumption, resources available, domestic production rates and capacities by energy type, and price of U.S. -produced energy by type. Projections of domestic and international supply, production, and consumption for the period 1983-90 are included in detailed tables. Reference features include the following: GNP implicit price deflators, thermal conversion factors, and a glossary of terms. This publication, DOE/E/ A-0385(82), is available free of charge by writing to the Energy Information Administration, National Energy Information Center, U.S. Department of Energy, Washington, D. C. 20585. Bureau of the Census Catalog, 1982-83 This recently issued publication provides content and ordering information for products released by the Bureau of the Census. The catalog includes an overview of all products issued since 1980, followed by 11 topic sections including business, construction and housing, and population. A special section on the 1980 Census of Population and Housing describes all products released through spring 1983 in all formats--printed reports, microfiche, computer tapes, paper prints, and maps. Additional sections describe all products from the 1977 economic and 1978 agricultural censuses. For each product listed, subject content, geographic areas covered, dates, and ordering information are provided. Reference features include a directory which lists names and addresses of many sources of assistance, as well as information about the census and survey programs of the Bureau. The Bureau of the Census Catalog: 1982-83, Stock No. 003-024-05768-9, is available for $6.50 from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402. Agrtcultural Outlook '85-New Date Announced The Agricultural Outlook Conference will be held from December 3 to December 6, 1984. "Home Economics: Outlook for Families" will feature several speakers who will address problems facing families in a changing social and economic environment. This Conference is free. Please preregister by writing: Outlook '85, Room 5143, South Building, Washington, D.C. 20250. To obtain Conference materials and a building pass, Conference participants are asked to go to the Patio in USDA's Administration Building at 12th and Independence Avenue, S.W., Washington, D.C. An informal pre-Conference home economics brunch will be held on Monday, December 3, at Hogates Seafood Restaurant, 9th and Maine Avenue, S.W., Washington, D.C. To make a reservation please send a check for $13.25, payable to HE-170, to Velda Rankin, ES-USDA, Room 3443, South Building, Washington, D.C. 20250. The cost will be $14.50 at the door for reservations not made or received by Wednesday, November 21. The time of the luncheon and the speaker will be announced at a later date. A special telephone line service (900-line) will provide line access to speeches given at the Outlook '85 Conference. There is a per minute charge to the caller. Please note that the pre-Conference home economics brunch will not have 900-line service. Information for the Outlook for Families program can be obtained from Kathleen K. Scholl by writing to Family Economics Research Group, ARS-USDA, Room 442A, Federal Building, Hyattsville, Md. 20782, or by calling 301-436-8461. 1984 No.3 Family Economics Review 25 N "..', Ill .3.. .. ...... "< ,.,., n 0 ::J 0 .3.. .. n "' ::0 (1) .<.. . (1) :1: "Q') -'>- z 0 "' Cost of food at home estimated for food plans at 4 cost Zeyezs, April 1984, U.S. average 1 Cost for 1 week Cost for 1 month Sex-age group Thrifty Low-cost M:xterate- Liberal Thrifty Low-cost M:xterate- Liberal plan plan cost plan plan plan plan cost plan plan FAMILIES Family of 2 :2 20-50 years •••••••••••••••••••••••• $37.10 $46.40 $57.10 $70.60 $160.70 $201.20 $247.50 $305.70 51 years and over •••••••••••••••••• 35.20 44.50 54.50 64.90 152.50 192.60 236.30 281.60 Family of 4: Couple, 20-50 years and children-- 1-2 and 3-5 years •••••••••••••••• 53.70 66.60 81.10 99.00 233.10 288.60 351.70 429.10 6-8 and 9-11 years ••••••••••••••• 61.70 78.10 97.50 117.30 267.10 338.60 422.80 507.60 INDIVIDUALS3 Child: 1-2 years •••••••••••••••••••••••••• 9.60 11.60 13.50 16.10 41.80 50.40 58.60 70.00 3-5 years .......................... 10.40 12.80 15.70 18.70 45.20 55.30 68.10 81.20 6-8 )iears •••••••••••••••••••••••••• 12.80 16.80 21.00 24.60 55.30 72.80 91.10 106.40 9-11 years ••••••••••••••••••••••••• 15.20 19.10 24.60 28.50 65.70 82.90 106.70 123.30 Male: 12-14 years ........................ 16.00 21.70 27.10 31.80 69.20 94.20 117.40 137.60 15-19 years •••••••••••••••••••••••• 16.60 22.60 27.90 32.30 72.00 98.00 120.90 140.10 20-50 years •••••••••••••••••••••••• 17.70 22.40 28.00 33.70 76.70 97.20 121.30 145.80 51 years and over •••••••••••••••••• 16.10 21.30 26.00 31.10 69.90 92.10 112.80 134.90 Female: 12-19 years ........................ 15.80 18.90 22.80 27.50 68.60 82.00 99.00 119.40 20-50 years •••••••••••••••••••••••• 16.00 19.80 23.90 30.50 69.40 85.70 103.70 132.10 51 years and over ••......•••••.••• 15.90 19.20 23.50 27.90 68.70 83.00 102.00 121.10 1 Assumes that food for all meals and snacks is purchased at the store and prepared at home. Estimates for the thrifty food plan were computed from quantities of foods published in Family Economics Review, 1984 No. 1. Estimates for the other plans were computed from quantities of foods published in Family Economics Review, 1983 No. 2. The costs of the food plans are estimated by updating prices paid by households surveyed in 1977-78 in USDA's Nationwide Food Consumption Survey. USDA updates these survey prices using information from the Bureau of Labor Statistics (CPI Detailed Report, table 3) to estimate the costs for the food plans. 2 10 percent added for family size adjustment. See footnote 4. 3 The costs given are for individuals in 4-person families. For individuals in other size families, the following adjustments are suggested: 1-person--add 20 percent; 2-person--add 10 percent; 3-person--add 5 percent; 5- or 6-person--subtract 5 percent; 7- or more-person--subtract 10 percent. () 0 5!l. 9. t-rj 0 0 0. a :X: 0 ~ Consumer Prices Consumer Price Index for all urban consumers [ 1967 = 100] Group All i terns •••••••••••••••••••••••••••••••••••• Food ...•.•...........•..................•. Food at home ...•.•..................•... Food away from home •••••••••••••••••••• Housing ................. • ................ . Shelter . ................................ . Rent, residential •••••••••••••••••••••• Fuel and other utilities ••••••••••••••••• Fuel oil, coal, and bottled gas •••••••• Gas (piped) and electricity •••••••••••• Household furnishings and operation ••••• Apparel and upkeep ••••••••••••••••••••••• Men's and boys' ........................ . Women's and girls' ..•.•...•.••...•..•...• Footwear ...••.•......•..•............•.. Transportation ....••.•••..••.•..••.•..•••• Private ................................. . Public .. •.......•....•..........••....... Medical care .............................. . Entertainment ...............••..•..••.•.•• Other goods and services •••••••••••••••••• Personal care ••••••.••.•.••..•.••.••.•.•• Apr. 1984 308.8 302.3 292.8 330.9 333.2 357.8 246.4 380.9 650.7 432.3 242.3 199.2 190.6 163.2 208.9 309.6 304.8 377.1 375.7 253.8 302.8 268.9 Mar. 1984 307.3 302.2 293.1 329.8 331.5 355.5 244.8 380.1 660.0 429.5 241.2 198.8 189.9 163.3 207.7 306.9 301.9 377.4 374.5 251.7 302.1 267.8 Source: U.S. Department of Labor, Bureau of Labor Statistics. Feb. 1984 306.6 302.1 293.6 328.5 331.0 354.0 243.6 383.0 688.6 429.0 240.4 196.2 187.9 159.0 206.4 305.8 300.8 377.4 373.2 251.5 301.5 267.9 Apr. 1983 295.5 291.9 283.4 318.0 320.3 ~ 341.7 234.5 363.6 610.6 420.5 239.0 ...lJ!.5. 5 187.8 160.6 207.5 292.3 m.5 361.1 -la.3. 5 244.6 283.2 259.1 1984 No.3 Family Economics Review 27 -tr UB. 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Title | Family Economics Review [1984, Number 3] |
Date | 1984 |
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 77.708:984/3 |
Digital publisher | The University of North Carolina at Greensboro, University Libraries, PO Box 26170, Greensboro NC 27402-6170, 336.334.5482 |
Full-text | Editor Katherine S. Tippett Managing Editor Sherry Lowe Editorial Assistant Nancy J. Bailey Family Economics Review is published each quarter by the Family Economics Research Group, Agricultural Research Service. United States Department of Agriculture. Washington. D.C. The Secretary of Agriculture has determined that the publication of this periodical is necessary in the transaction of the public business required by law of this Department. Use of funds for this periodical has been approved by the Director of the Office of Management and Budget through March 31. 1987. Contents may be reprinted without permission. but credit to Family Economics Review would be appreciated. Use of commercial or trade names does not imply approval or constitute endorsement by USDA Family Economics Review is for sale by the Superintendent of Documents. U.S. Government Printing Office. Send subscrip-tion orders. change of address. and single copy requests to Superintendent of Documents. U.S. Government Printing Office. Washington. D.C. 20402. (See subscription form in back of this issue.) Suggestions or comments concerning this publication should be addressed to: Katherine S. Tippett. Editor. Family Economics Review, Family Economics Review 1984 No. 3 Contents The Social Security Program of Self-Employed Farm Operator Families Kathleen K. Scholl Developments in Consumer Product Standards Frankie N. Schwenk Child Cost User Data Updated to 1983 Carolyn Summers Edwards and Linda J. Beckham Cost of Having a Baby Some New USDA Publications An Aging Society Health Care Expenditures for the Elderly--Medicare Coverage American Women--Three Decades of Change Farm Population of the United States, 1982 Nutrient Content of the U.S. Food Supply, 1982 Major Programs of the Bureau of Labor Statistics 1980 Census of Population and Housing Users' Guide--Part C New Ruling for Mortgage Insurance Premiums Synopsis of the Annual Energy Review and Outlook, 1982 Bureau of the Census Catalog, 1982-83 Agricultural Outlook '85--New Date Announced Cost of Food at Home Consumer Prices Family Economics Research Group. USDNARS, Federal Building, Room 442A. Hyattsville, Md. 20782. Issued July 1984 1 10 13 19 20 20 21 22 22 23 23 23 24 24 25 25 26 27 The Social Security Program of Sel1-Employed Farm Operator Families By Kathleen K. Sc;holl Consumer economist The social security program for selfemployed farm operator families is somewhat different from the social security program of wage-earner families. Fa·rm operators who are sole proprietors have a higher social security tax rate but have ways to shelter farm income from this higher tax. One way to shelter farm income is for the farm operator to pay a salary to his wife since spouses of sole proprietors are excluded from social security coverage as individual workers. This exclusion, however, may not always benefit the family. This article reviews the history of social security coverage for farm families and illustrates, through the use of two hypothetical case studies, the differences in social security tax rates for self-employed farm operator families and wage-earner families. The advantages and disadvantages of using tax shelters available to the farm family are also discussed. HISTORY OF SOCIAL SECURITY FOR THE SELF-EMPLOYED The decision to exclude farm laborers, farm workers, and farm operators from the social security program when it was developed in 1935 was based upon problems in administering the collection of funds (!)• The social security legislation placed primary responsibility on the employer for the withholding of the employee's tax and the paying of the employer's tax. No mechanism was in place for collecting tax from the self-employed. The present system that farmers use in paying social security tax along with personal income tax could not be used at that time since many farmers did not file income tax returns because of large personal exemptions in the computation of net self-employment earnings. Changes in the personal exemptions after World War II and the application of income tax to lower income levels eliminated most of the administrative problems in collecting a social security tax from the self-employed farm operator. As a result of these income tax changes, the Social Security Act was amended in 1954 to include self-employed farm operators; they began reporting their earnings for social security purposes in 1955.1 In determining what tax rate should be applied to self-employment earnings, the 19 4 7-48 U. S. Advisory Cou neil on Social Security recommended that the self-employed person contribute to the social security fund at 1-1/2 times the employee rate (75 percent of the combined employee and employer rates) (_~). The Council expressed three reasons for this rate rather than a rate that equaled the combined rates: (1) Some of the self-employed would be paying tax on the income from capital investment; (2) if the combined employee and employer rates were used, the high-income self-employed might be overcharged for their coverage in comparison with comparable protection under private insurance; and (3) self-employed individuals tend to retire at a later age than wage and salary workers, resulting in an overpayment to the trust fund since their contribution period would be longer and the benefit period shorter. The self-employment rate recommendation of the 1947-48 Council was implemented and remained close to 75 percent of the combined employee and employer rates (75 percent of the combined rates for Old-Age, Survivors, and Disability (OASDI) program and 50 percent of the combined rates for Hospital Insurance) until the passage of the Social Security Amendments of 1983 (Public Law 98-21). In these amendments the OASDI tax rate for self-employed persons was raised to equal the combined employee and employer rates. The National Commission on Social 1 The Social Security Act was amended in 1950 to include nonfarm self-employed persons and hired farm laborers. PROPtRT'/ OF TH::: liRRAR1 / JUL 13 198 J 'Pdsitory Review Security Reform (6) recommended this change based on the need- to raise revenues for the social security trust fund. The full burden of the tax increase will not be borne by the self-employed. Individuals will be able to use tax credits to lower their full tax rate (columns 2 and 5 of table 1) to the real rate (columns 3 and 6). The difference between the full and real rates will be taken from general revenues and placed into the social security trust fund. In 1984 a credit of 0. 3 percent is allowed for employees and a credit of 2. 7 percent is given for self-employed individuals. The employee credit will be permitted for 1984 only, and the credit for self-employed persons will be reduced to 2.3 percent for 1985 and 2.0 percent for 1986 through 1989. After 1989, the credit will be replaced with special provisions designed to treat the self-employed more equitably with the income tax and social security tax systems of employees and employers. TWO CASE STUDIES The Families 2 Rural F. Jones was born on his family farm on January 2, 1918. Jones became the sole owner of the family farm when his parents died in 1939, the year he married Carol. Although the farm is a sole proprietorship, Carol has always made a substantial contribution with her farm labor. In 1955, the first year farm operators paid into the social security fund, Rural Jones began paying self-employment taxes. For 28 years, from 1955 to 1982, he earned the incomes as reported in table 2. On January 2, 1983, at the age of 65 years, Rural F. Jones retired. 2To present realistic portrayals of income flows for these case studies, U.S. mean farm incomes and median wage-earner incomes were used for the families. Although the incomes for these two families were taken from aggregate data, the economic analysis should not be redirected to the aggregate level because of differences in definitions between the two data sets used to obtain the incomes. Table 1. Social security tax rates as a percentage of earnings for employers and employees (each) for the self-employed, by former and current legislation flnployer and anployee rates Self-employed rates Public Law 98-21 Public Law 98-21 Years Prior Without With Prior Without With law tax tax law tax tax credit credit credit credit (1) (2) (3) (4) (5) (6) 1984 ••..•..•.••• 6.7 7.0 1 6.7 9.35 14.0 11.3 1985 ••••.•...••• 7.05 7.05 7.05 9.9 14.1 11.8 1986-87 ......... 7.15 7.15 7.15 10.0 14.3 12.3 1988-89 ......... 7.15 7.51 7.51 10.0 15.02 13.02 1990 and later ••• 7.65 7.65 7.65 10.75 15.3 (2) 1 Employer rate remains at 7.0 percent. 2 After 1989 the credit will be replaced with special prov1s10ns designed to treat the self-employed more equitably with the income tax and social security tax systems of employees and employers. Source: Svahn, John H., and Mary Ross, 1983, Social Security Amendments of 1983: Legislative history and summary of provisions, Social Security Bulletin 46 (7): 3-48. 2 family Economics Review 1984 No.3 Table 2. Maximum taxable earnings, tn...-..a ble l·ncome, t.n...-. ra t es, an d soc1·a 1 secur1• t y con t r1· b ut1· 0ns o f Rural F. Jones and Wage B. Smith, 1955-82 Maxirrun Rural F. Jones Wage B. Smith Year taxable earnings Taxable Self- Social Wage Social Social farm e!Jl>loyment security income 2 security security income 1 tax rate contributions tax rate contributions Dollars Dollars Percent Dollars Dollars Percent Dollars 1955 ••••••• 4,200 1956 ••••••• 4,200 1957 ••••••• 4,200 1958 ••••••• 4,200 2,504 3.0 75.12 4,764 2.0 84.00 2,750 3.0 82.50 5,164 2.0 84.00 2,604 3.375 87.89 5,297 2.25 94.50 3,133 3.375 105.74 5,474 2.25 94.50 1959 ••••••• 4,800 1960 ••••••• 4,800 2,936 3. 75 ll0.10 5,704 2.50 120.00 3,169 4.5 142.61 5, 920 3.0 144.00 1961. •••••• 4,800 3,431 4.5 154.40 5,990 3.0 144.00 1962 ••••••• 4,800 3, 565 4.7 167.56 6,072 3.125 150.00 1963 ••••••• 4,800 3,639 5.4 196.51 6,259 3.625 174.00 1964 ••••••• 4,800 3,862 5.4 208.55 6,596 3.625 174.00 1965 ••••••• 4,800 4,190 5.4 226.26 6,980 3.625 17 4. 00 1966 ••••••• 6,600 5,037 6.15 309.78 7,318 4.2 277.20 1967 ••••••• 6,600 4,550 6.4 291.20 7,996 4.4 290.40 1968 ••••••• 7,800 4,946 6.4 316.54 8,440 4.4 343.20 1969 ••••••• 7,800 5,781 6.9 398.89 9,189 4.8 374.40 1970 ••••••• 7,800 6,077 6.9 419.31 9,776 4.8 374.40 1971 ••••••• 7,800 6,039 7.5 452.93 10,246 5.2 405.60 1972 ••••••• 9,000 8,063 7.5 604.73 11,001 5.2 468.00 1973 ••••••• 10,800 12,564 8.0 864.00 11,875 5.85 631.80 1974 ••••••• 13,200 12,180 7.9 962.22 12,549 5.85 734.12 1975 ••••••• 14,100 11,423 7.9 902.42 13,316 5.85 778.99 1976 ••••••• 15,300 11,622 7.9 918.14 14.096 5.85 824.62 1977 ••••••• 16,500 10,852 7.9 857.31 15,345 5.85 897.68 1978 ••••••• 17,700 14,567 8.1 1,179.93 16.271 6.05 984.40 1979 ••••••• 22,900 15,505 8.1 1,255.91 16,034 6.13 982.88 1980 ••••••• 25,900 15,111 8.1 1,223.99 17,569 6.13 1,076.98 1981 ••••••• 29,700 13,025 9.3 1,211.33 18.958 6.65 1,260.71 1982 ••••••• 32,400 11,205 9.35 1,047.67 19,389 6.70 1,299.06 Total •••• 204,330 14,773.54 283,588 13,446.60 1 The annual earnings were calculated from unpublished data and from data in the Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics, 1981 (.!.!)• The earnings represen.t the average farm income which farm operators would have paid self-employment tax. Earnings were compiled and social security contributions were calculated by Isabelle Payton, Agricultural Research Service, U.S. Department of Agriculture. 2The U.S. annual median earnings of wage and salary families for 1955-82 were used for the table. The median earnings are of families with only wage and salary income. These include urban, nonfarm, and farm families. (Also, the incomes are for families that include multi-earners. Historical data are not available for one-earner families with only wage and salary income.) The annual earnings were obtained from source of income tables in the Current Population Reports of the Consumer Income Series P-60 for the years 1955-79. The titles of these reports have changed over the years but are currently titled, "Money Income of Households, Families, and Persons in the United States: 1981" (_!!). Earnings from wages and salaries for 1980, 1981, and 1982 are unpublished data from the Bureau of tt"\e Census. 1984 No.3 Family Economics Review J Since 1955 Rural F. Jones reported a total farm income of $204,330. Over these years Rural paid $14,773 in self-employment tax. Based upon his earnings record, Rural and Carol Jones receive a monthly social security benefit check of $852. 3 Wage B. Smith was also born on January 2, 1918. In 1935 Smith joined the U.S. Army and in 1939 married Susan. Throughout their married life, Susan did not work outside the home. After 20 years of military service, Wage Smith left the Army and began working for a farm implement manufacturer. Smith's annual earnings are reported in table 2. On January 2, 1983, Wage Smith retired at the age of 65. During the 28 years that Smith worked in private industry, his employer deducted the appropriate social security tax from Smith's paychecks and matched those contributions through an employer tax. Each paid $13,447 for a total contribution of $26, 894. Smith earned a total income of $283,588 while he worked in manufacturing. Wage and Susan receive a monthly social security benefit check of $1,012.50, which is based upon Smith's earnings record. A Comparison A comparison of income, social security tax rates, social security contributions, and benefit levels indicate sharp differences between the situations of Rural F. Jones and Wage B. Smith. In the 28-year period, Jones earned about $80,000 less than Smith. When the income flows are converted to constant 1982 dollars (1967=100), the difference more than doubles to $194,000. Rural Jones paid $1,327 more than Wage Smith in social security contributions. From 1955 to 1973, Smith paid the maximum contribution, whereas Jones paid the maximum tax only in 1973. Because Jones paid at a higher rate, his monetary contribution was higher than Smith's even with a lower income flow. Jones paid 7 percent of his total income (current dollars) in self-employment tax; Smith paid 5 percent of his total 3 The monthly social security benefit levels for a worker and spouse were calculated using the AIME formula. Benefit levels were calculated by Michael Packard, Social Security Administration, U.S. Department of Health and Human Services. 4 family Economics Review 1984 No.3 earnings to the social security fund. However, taking into consideration the tax · that his employer also paid while Smith was employed, a net difference of $12,120 in social security contributions was paid on behalf of Wage Smith above the amount that was paid by Rural Jones. Although Rural Jones as an individual paid more into the social security trust fund and paid a greater proportion of his income than Wage Smith, the Jones family had a lower monthly benefit level. The difference of $160.50 per month in benefit levels of Smith and Jones is attributable to the higher level of Smith's wages. Benefits are determined by the amount of earnings, not on the amount contributed to social security. In summary, the farm family in comparison with the wage-earner family has lower income, has a higher social security tax rate, pays more in social security contributions, and receives lower benefits. The higher benefits for the typical wage-earner family have in effect been funded through employer contributions to the fund. With the increase in the rate of contribution for the self-employed as directed in Public Law 98-21, the difference in the amount paid to the fund by farm and wage-earner families will become even greater. Farm families of the future will pay an increased tax rate and contribute a larger portion of their income to social security, but will have their benefits calculated in the same way the levels are determined for nonfarm families. From now until 1988, the amount of taxes to be paid by future wage and salary families will grow more slowly than that for farm families. TAX SHELTERS Off-farm Income Tax Shelter Since an individual with both wage and self-employment income is taxed first on wages, for social security purposes, farm operators who work off the farm can subtract those earnings from maximum taxable earnings before applying the higher self-employment tax rate to farm income. To take advantage of this off-farm income tax shelter, the farm operator's off-farm earnings should equal the maximum taxable amount, so that none of the farm income will be taxed for social security purposes. Farm operators who work off the farm generally work part time and are unlikely to earn enough to shelter all the farm income. Farm operators who work off the farm but earn less than the taxable amount may pay more total social security tax by paying two different rates on two types of income than they would pay on farm income only. For example, if Rural Jones in 1978 earned $10,000 off the farm and had a farm income of $14,567, he would have paid $605 in social security tax -as an employee and $624 in self-employment tax. The selfemployment tax would have been paid on $7,700 of farm income--the difference between the maximum taxable earnings ($17, 700 in 1978) and off-farm income ($10,000). Even though Jones was able to shelter $6,867 of his farm income from the self-employment tax, the total social security contribution paid by the Jones family would have been $49 higher than the amount he would have paid on farm income only. Jones will benefit at retirement, however, because his benefit level will reflect the fact that his total income increased. As more farm families turn to off-farm employment to supplement their farm income, 4 more farm families will be faced with this tax complexity. Spousal Tax Shelter Although Wage Smith could not alter his level of contribution to the social security fund, Rural Jones could have lowered his by paying his wife part of his farm income. 5 In 4 In 1978, 46 percent of the farm operators reported that they spent the majority of their worktime in occupations other than farming. Since 1967, with the exception of 2 years, off-farm income per farm operator family has been greater than net farm income. 5 For a more detailed discussion of paying a spouse for farmwork by types of farm organization, see reference ~· Special provisions apply to sole proprietorships in community property States. The United States Court of Appeal, Ninth Circuit, has docketed Edwards et al, v. Heckler. This decision by the court will clarify the allocation of self-employment income between spouses in community property States. a sole proprietorship where one spouse is the owner and operator of the farm operation and employs the other spouse, selfemployment taxes are paid only on the operator's income; neither self-employment tax nor social security employee tax is paid on the other spouse's farm income. The splitting of income between spouses must be based upon the contributions of each; these may be in the form of labor, but also include capital such as inherited farmland. An example of a farm couple splitting farm income by ·different types of farm organizations is provided in table 3. An illustration of this spousal tax shelter can be made with the hypothetical farm family. Suppose Carol Jones made substantial labor contributions to the farm in the years 1969 and 1970; 40 percent of the farm income could have been allocated to her for those 2 years. Carol always did farmwork and could have been paid 20 percent of the farm income for 1955 through 1968. Assuming her farmwork decreased after 1970, she could have been paid 10 percent of Rural's income for the years after 1970. If the Joneses had elected to pay Carol for her labor contributions throughout the years, their total self-employment tax would have been lowered by 12.8 percent to $12,889, a savings of $1,884. The J oneses' retirement benefits, however, would have been lowered by over $90 per month to $759. If the Joneses had taken the amount of money they did not pay as self-employment tax for each year and placed it into a savings account, the principal in the account would have been about $3,000 today. 6 6 Farm families are not likely to have started a savings account for retirement purposes, especially in the fifties. Studies in four States between 1951 and 1954, a period prior to the inclusion of farm operators into the social security program, indicate that two-thirds of the farmers had not made retirement plans and that only onehalf thought they would be able to finance their retirement from farming C..!.• _!, ~. .!.Q_). The present value of the savings account was calculated by use of 4-1/2 percent compound interest factors. 1984 No.3 Family Economics Review 5 The social security program is not just a retirement or annuity plan, however. Some risk is assumed by the farm family when the farm income is divided between the farm spouses. Since the benefits are determined by the earnings record, a premature death by the self-employed farm operator might lower the survivor benefits that his family would receive. Also, disability and medical benefits provisions of the social security program are of major importance to farmers who work in the second most dangerous occupation CJ_). Premiums for private insurance are high. PROGRAM CHANGES TO INCLUDE SPOUSES The disability and survivorship benefits of social security are payable upon injury or death of the self-employed farm operator. With the exception of spouses working for farm corporations or farm partnerships, farm families cannot obtain social security benefits based on the spouse's paid or unpaid farmwork. When the farm spouse dies or becomes disabled, the farm operator may need to replace the farm labor of the spouse with hired labor, thereby ra1smg farm expenses and lowering family income. Even though 95 percent of U.S. farms are operated by men, research has shown that farm women make a substantial contribution to farmwork (_~) and that wives of farmers have some risk of permanent injury from the farmwork they perform (table 4). Although some farm families are eligible to receive benefits for the loss of the wife's income, these benefits are generally based upon the wife's off-farm earnings. Data from the 1980 National Farm Women Survey show that slightly less than one-half of the married women interviewed stated they were eligible to receive social security benefits based on their individual earnings record. The majority of farm women obtained their credits through off-farm employment; others were entitled as a result of selfemployment or employment with their farm corporations or certain types of farm partnerships. Wives of self-employed farm operators are regarded, for social security purposes, as unpaid family workers or homemakers even if they perform farmwork and are paid for their Table 3. Social security employee tax or self-employment tax for a farm couple by type of farm organization, 1984 Wife Type of fann organization Tax Income Tax Tax rate paid rate Percent Dollars - - Percent Sole proprietorship •••••••• NA 0 NA 11.3 Do •••••••••••••••••••• NA 16,000 NA 11.3 Partnership: Wife not a partner ••••••• 26.7 16,000 1,072 11.3 Wife is a partner •••••••• 11.3 16,000 1,808 11.3 Corporation ............... 26.7 16,000 1, 072 2 6. 7 1 In 1984 the self-employed pay 11.3 percent on income up to a a maximum tax of $4, 271.40. 2 The farm business as employer also contributes 7. 0 percent. NA = not applicable. 6 Family Economics Review 1984 No.3 Husband Total tax Income Tax paid paid - - - - Dollars - 40,000 1 4,271 4,271 24,000 2, 712 2,712 24,000 2,712 3,784 24,000 2,712 4,520 24,000 1,608 2,680 maximum base of $37,800 for labor. Several recent proposals 7 designed to address the exclusion of homemakers from social security will have an impact on farm women, if enacted. Evaluations of these proposals generally focus on problems associated with the valuation of the work of the homemaker. Although farm spouses as homemakers share many of the same problems nonfarm homemakers have with social security exclusion, many farm women perform work that can be valued in the marketplace. These wives, however, have the value of their labor, in the form of farm income, credited to their husbands. The following two proposals are examined with respect to their effects on the spouses of self-employed farm operators. The first proposal does not attempt to value household work; the second proposal requires setting a specified dollar value for work performed in the home. 7See Social Security and the Changing Roles of Men and Women (13) for a detailed description of earnings sharing, homemakers credit, and other proposals. "Earnings sharing" a system of splitting earnings credits for years of marriage, is currently being considered in Congress as S.3 (Senate bill) and H.R.2742 (House bill). The proposal requires that earnings of spouses be shared equally and benefits be based on the individual's earnings record. Although there are several interpretations of this proposal, earnings sharing would eliminate some of the inequities caused by the spousal tax shelter. For example, earnings sharing would allow Carol Jones of the hypothetical farm family to build an earnings credit record based on one-half of the farm income. Farm income could not be sheltered by paying income to Carol, thus requiring the Joneses to pay self-employment tax on all farm income. But the Joneses' social security benefit level at retirement would be higher ($852 rather than $759 with the tax shelter). Susan Smith, the nonfarm homemaker, would receive credit under earnings sharing for one-half of Wage's earnings. The Smiths' level of benefits would not change under some interpretations of earnings sharing. Earnings sharing will also Table 4. Farm and ranch work injuries by residency and severity Residency Husband ••••••••••••••••••• Wife •••••••••••••••• • • • • • • • Son •................ · • • • • • Daughter .. ................ Full-time employee ••••••••• Part-time employee ........ Other .••.•..•....•....•••. Total .............•...... All injuries 43.4 10.4 17.0 2.6 12.9 9.4 4.3 100.0 Slight 1 40.1 8.8 16.7 2.3 16.8 11.9 3.4 100.0 Severity Severe2 Permment 3 Percent 44.1 11.5 17.3 2.7 11.3 8.4 4.7 100.0 56.1 6.1 19.7 1.5 6.1 6.1 4.4 100.0 1 A slight injury includes minor cuts, sprains, burns, etc. 2A severe injury includes a broken bone, cut ligament, sprained back, etc. Fatal 4 47.6 0.0 19.1 o.o 4.8 14.3 14.2 100.0 3A permanent injury indicates some kind of crippling, such as loss of hand, finger, sight, or use of limb(s). 4 A fatal injury is one that results in a death during the survey period. Source: Hanford, William D., and others. 1982. 1982 Farm Accident Survey Report, National Safety Council, Chicago, Ill. 1984 No.3 Family Economics Review 7 allow a spouse, upon divorce, to keep the credit earned during the years of her marriage. "Homemaker credit" allocates social security credits to an individual for work done in the home. An imputed dollar value for services performed in the home would be determined and credited to her although no income was paid for her work in the household. Homemaker credit would be helpful to women who enter and exit the labor market during various phases of their family lifecycle. This proposal would also be helpful to women who dissolve their marriages before their husbands retire, and to families with disabled homemakers. Depending upon the individual circumstances, retirement benefits for a married couple may or may not be affected by the addition of homemaker credits to the homemaker's personal earnings record. Under the homemaker credit system Susan Smith, the full-time homemaker, would have the value of her household work included in her personal earnings record. Carol Jones, who spent part of her time in farmwork, would not receive credits as a full-time homemaker. Her "credit" for household work would be similar to that given to a woman in paid employment. Since "home maker credit" is intended to address only the household work problem, Carol would not receive credit as an individual for the value of her farmwork. LITERATURE CITED 1. Adkins, William G., and Joe R. Motheral. 1954. The Farmer Looks at His Economic Security. Bulletin 774. Texas Agricultural Experiment Station, Texas A&M College System, College Station, Tex. 2. The Advisory Council on Social Security to the Senate, Committee on Finance. 1949. Recommendations for Social Security Legislation. Senate Document No. 208. 3. Galloway, Robert E. 1955. Farmers' Plans for Economic Security in Old Age. Bulletin 626. Kentucky Agricultural Experiment Station, University of Kentucky, Lexington, Ky. 4. Levy, Marcia. 19 7 4. Self -employment in the Covered Work Force. U.S. Department of Health, Education, and Welfare 8 family Economics Review 1984 No.3 [now known as U.S. Department of Health and Human Services], Social Security Administration, DHEW Publication (SSA-75-11853) Staff Paper No. 19. 5. McKain, Walter C., Jr., Elmer D. Baldwin, and Louis J. Ducoff. 1953. Old Age and Retirement in Rural Connecticut. Bulletin 299. Storrs Agricultural Experiment Station, College of Agriculture, University of Connecticut, Storrs, Conn. 6. National Commission on Social Security Reform. 1983. Report of the National Commission on Social Security Reform. 7. National Safety Council. 1983. Accident Facts: 1983 Edition. Chicago, Ill. 8. Scholl, Kathleen K. 1982. Household and farm task participation of women. Family Economics Review 1982(3): 3-9. U.S. Department of Agriculture, Agricultural Research Service. 9. Scholl, Kathleen K. 1983. Classification of women liS farmers: Economic implications. Family Economics Review 1983(4):8-17. U.S. Department of Agriculture, Agricultural Research Service. 10. Sewell, William H., Charles E. Ramsey, and Louis J. Ducoff. 19 53. Farmers Conceptions and Plans for Economic Security in Old Age. Research Bulletin 182. Agricultural Experiment Station, University of Wisconsin, Madison, Wis. 11. U.S. Department of Agriculture, Economic Research Service. 1982. Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics, 1981. ECIFS 1-1. 12. U.S. Department of Commerce, Bureau of the Census. 1983. Money income of households, families, and persons in the United States: 1981. Current Population Reports. Consumer Income, Series P-60, No. 137. 13. U.S. Department of Health, Education, and Welfare [now known as U.S. Department of Health and Human Services]. 1979. Social Security and the Changing Roles of Men and Women. CORRECTION Please note the following corrections to issue 1983(4) in the article "Classification of Women as Farmers: Economic Implications." In all farm partnerships, regardless of whether or not a nonfamily member is a partner, the spouse pays social security tax. Table 1, P• 13, should be as follows (also note update of this table with the 1984 tax rates on p. 6 of this issue): Table 1. Social security employee ta.r or self-employment ta.r for a farm couple by type of farm organization, 1983 Wife Husband Total Type of farm organization armunt Tax Income Alrount Tax Income Aloount paid rate paid rate paid -Pe-rce-nt Dollars - - Percent Dollars - Sole proprietorship .•.•••••• NA 0 NA 9.35 40,000 13,338 3,338 Do ••••••••••••••••••••• NA 16,000 NA 9.35 24,000 2, 244 2,244 Partnership: Wife not a partner ........ 26.7 16,000 1,072 9 . 35 24,000 2,244 3,316 Wife is a partner ••••••• •• 9.35 16,000 1,496 9.35 24' 000 2,244 3,740 Corporation ••••••••..•••••• 26.7 16,000 1,072 26.7 24,000 1,608 2,680 1The self-employed pay 9. 35 percent on income up to a maximum base of $35,700 for a maximum tax of $3,337.95. 2The farm business as employer also contributes 6. 70 percent. NA = not applicable. P. 12, 2nd column, 3rd paragraph, should read as follows: "In a partnership arrangement, if the wife is a partner, self-employment taxes are paid on the income. In a partnership in which the husband is a partner and the wife is not, if she is an employee of the partnership, social security contributions are withheld from her pay at the employee rate and the partnership, as the employer, contributes at the employer rate." P. 13, 1st column, lines 9 and 10, delete the following: "and a partner who is not a member of the family." 1984 No.3 Family Economics Review 9 Developments in Consumer Product Standards By Frankie N. Schwenk Home economist Standards are among the oldest forms of consumer and producer protection. As early as 7000 B.C., the Egyptian cubit stone was used as a standard unit of measure, and by 45 B.C. Julius Caesar had mandated the 365!,;-day calendar. Today, standards cover a wide range of consumer products. Recent developments in the standards field include increased consumer participation on committees that prepare standards, and a shift by the Federal Government toward voluntary standards and away from mandatory standards. Product Standards A standard is an agreed upon procedure or material or a fundamental unit of measure (see box for types of standards). It may be mandatory or voluntary. Mandatory standards are those enforced by local, State, or national government agencies. They may have been written by a government agency or may be a standard that was written as a voluntary standard, then adopted and enforced by a government agency. TYPES OF STANDARDS The Consumer Product Safety Commission's (CPSC) mandatory standards include those on power mowers, cribs, toys, cellulose insulation, fabric flammability, 1 and child-resistant bottle closures. The Federal Trade Commission (FTC) enforces mandatory standards for labels on the care of clothing and information labeling on energy costs of appliances. The Food and Drug Administration has established standards for microwave ovens, food products, and medical devices. Other agencies that enforce mandatory standards include the Environmental Protection Agency, Occupational Safety and Health Administration, Federal Communications Commission, and Nuclear Regulatory Commission. States have mandatory standards for weights and measures and some standards for services and products, such as energy efficiency standards for major home applicances. The energy efficiency standards are part of building codes, energy codes, or rulings of public utility commissions. Local governments may also enforce mandatory standards, such as building codes. 1 For further information, see Family Economics Review, 1983(2): 8-9. Physical measures. Definition or objects of measurement system. Example: Inch, kilogram. Standard definitions. Common language that defines product, material, system, or service. Examples: Ice cream, type A child-resistant bottle closure. Standard recommended practice or test procedures. May include sampling instructions; installation, maintenance, and operation of testing apparatus; precise procedures for apparatus, test specimens, and calculations. Example: Test for measuring bathtub slip resistance. Safety standards. May include material, design, strength, energy supply, thermal conditions, noise, reliability, durability, edges, surfaces, location, spacing, operator contact, stability, sanitation, and ultimate disposal. Examples: Match safety standard, baby cribs. Information disclosure standards. Includes quality certification and information labeling. Example: Underwriter Laboratories label. Specifications and classifications. Includes types, classes, grades, and ratings. Example: Standard tables for classifying manmade and natural fibers. 10 Family Economics Review 1984 No.3 Voluntary standards are those where participation is voluntary in both the development and use of the standards. They may be used in business contracts, sales agreements, or product design. Examples of voluntary standards developed recently include standards on video magnetic recording tape dimensions, laminated hardwood flooring classifications, and dehumidifier safety. There are more than 400 organizations in the United States that write voluntary standards. These include the American Society for Testing and Materials (ASTM), Association of Home Appliance Manufacturers (AHAM), American Gas Association, Underwriters Laboratories (UL), and National Fire Protection Association (NFPA). A wide range of interested parties, such as producers, trade association representatives, consumers, and representatives of government and academia, participate in the development of a voluntary standard, which increases the likelihood that the standard will be accepted and used. An example of how voluntary standards may be written is the ASTM process. ASTM operates by consensus, defined as "substantial agreement reached by concerned interests." A task group prepares a draft standard, which moves by balloting procedures through a subcommittee to the main committee and then to a membership ballot, where any of ASTM's 31,000 members can comment on the proposed standard. At each level of balloting, there are requirements for the number of ballots returned, the number of ballots cast affirmatively, and discussion of each negative ballot. ASTM standards-writing committees operate under established rules such as the following: The number of producer members must not exceed the number of nonproducer members. Membership must be open to all qualified individuals. All negative votes must be considered by the originating subcommittee. If judged persuasive, the document is rewritten. All committee meetings considering technical matters must be open to visitors. All standards actions must be equitable, meaning every organization, large or small, and every individual is given a vote (!). The American National Standards Institute (ANSI) plays a prominent role by coordinating activities of standards developing organizations. Standards developed by ASTM or other organizations that prepare standards may be submitted to ANSI for acceptance as an American National Standard. The 1984 Catalog of American National Standards lists 9, 000 standards. American National Standards often become voluntary international standards issued by the International Organization for Standardization (ISO). ANSI is the u.s. member of ISO and manages and coordinates U.S. participation in ISO activities. Consumer Participation in Standards Development Home economists, with an understanding of consumers' viewpoints, have been making contributions to standards development for years. In the twenties, American Home Economics Association representatives were involved with safety codes for mechanical refrigerators. In the thirties, home economists helped develop standard sizes for children's garments and testified at FTC hearings on labeling rules for rayon, cotton, silk, and wool. In the next two decades, contributions were made to standards for cooking utensils, nylon hosiery, dress sizes, flat irons, and electric ranges (_!, pp. 66, 84, 129). Recently, home economists have served on the ANSI Consumer Interest Council and the ANSI Standards Screening and Review Committee that reviews all consumer standards submitted to ANSI. In ASTM, membership of the Consumer Products Standards Committee F-15 includes home economists from Cooperative Extension, universities, secondary schools, businesses, and consumer organizations. 1984 No.3 Family Economics Review 11 Other than the long-term involvement of home economists, however, consumers and consumer organizations have not been well represented in the standards development process. One of the new trends in standards development is the effort of organizations that prepare standards to increase consumer participation. A plan to include more consumers and representatives from consumer organizations was implemented by the National Consumer League (NCL) and ASTM in 1978. NCL agreed to provide consumer representatives on designated committees and to be responsible for their selection and training (1, p. 120). ASTM underwrote the expenses of the participants. In addition to including consumer representatives on more committees that prepare standards, several consumer sounding boards have been established. ANSI coordinates this program. ASTM, UL, AHAM, NFPA, and the National Bureau of Standards sponsor boards composed primarily of consumers who are able to view a product from a user's point of view. Members discuss their experiences in using a product, and their reactions and recommendations are fully considered by the standards-developing groups that request the sounding. For example, a sounding board in Maryland met to discuss the standard for Energy Guide labels required by the FTC for certain major appliances. The board is sponsored by the Office of Consumer Affairs, U.S. Department of Commerce, and AHAM conducted the sounding. The sounding board members felt the Energy Guide labels should be continued but revised to show the estimated amounts of energy an appliance uses annually rather than operating costs, since costs change with inflation. The sounding board has also met to discuss a CPSC consumer information brochure on kerosene heaters. CPSC conducted the sounding, and representatives of NFPA, UL, and the National Kerosene Heaters Association attended. While consumers and consumer representatives may not always have the technical expertise to address some aspects of the 12 Family Economics Review 1984 No.3 standard, they bring an important perspective. They help provide the balance of interests needed to develop a standard that provides safety, information, or convenience for the consumer, yet is accepted and used by the producer. The Shift to Voluntary Standards It is the policy of the Federal Government to rely on voluntary standards whenever feasible in its procurement and regulatory activities. Circular A-119, entitled Federal Participation in the Development and Use of Voluntary Standards, issued by the Office of Management and Budget on October 26, 1982, outlined this policy (_~_). The circular calls for the use of domestic and international voluntary standards for procurement of goods and services for Federal Government use, and encourages participation by Federal agency employees in voluntary standards activities to help eliminate the necessity for development and maintenance of separate Government standards. The circular also requires agencies responsible for developing Government standards to review existing standards at least every 5 years and cancel those for which appropriate voluntary standards can be substituted. Agencies that enforce regulatory standards are becoming more involved in the voluntary standards development process and are using voluntary standards more. For example, CPSC rules and regulations state the following: "Voluntary standards now stand alongside mandatory standards activities as integral parts of ongoing Commission hazard programs" (_~_). CPSC is working with ANSI on a pilot program to promote voluntary standards. Also, CPSC is choosing the use of voluntary standards instead of mandatory standards on some products, such as toy chests. Mandatory standards have the advantage of covering all producers, which may be essential for a product where a serious safety problem exists. However, since standards often need frequent revision, the costs of developing and maintaining a large number of standards can be a financial burden to a Government agency. Voluntary standards, when developed by a committee that is varied and balanced, may be workable and satisfy the concerns of many interests. If the committee composition or the process is not adequate, however, it is possible to construct a standard that restricts competition or acts as a trade barrier, or is inadequate to provide health and safety protection. Also, because use of the standard is voluntary, it is possible that the producer with the product that most needs the standard will not choose to use that standard. Whether mandatory or voluntary, wellwritten standards provide ·protection, information, and convenience to consumers. Simplification for consumers and lower inventories for merchants have resulted from standardization of sizes. Useful information results from standards for classification and labeling, such as the new standard on wallcovering. Safety and health are protected by standards such as the carriage and stroller standards recently developed. Performance, reliability, or quality control are improved by standards such as the standard on insulated steel doors presently being considered. LITERATURE CITED 1. The American Society for Testing and Materials. [No date]. Standardization Basics. Philadelphia, Pa. 2. Angevine, Erma. 1982. Development of standard setting: Government and voluntary. In Erma Angevine, editor. Consumer Activists: They Made a Difference. Consumers Union, Mt. Vernon, N.Y. 3. Consumer Product Safety Commission. 1981. Voluntary standards activities; modification of policy. Rules and Regulations. Federal Register 46(107): 29930. 4. Pundt, Helen. 1980. AHEA--A History of Excellence. The American Home Economics Association. 5. U.S. Office of Mangement and the Budget. 1982. Federal Participation in the Development and Use of Voluntary Standards. Circular A-119. Child Cost User Data Updated to 1983 By Carolyn Summers Edwards and Linda J. Beckham Economist and social science aid The USDA estimates of the cost of raising a child are updated semiannually. Estimates for children in urban and rural nonfarm families living in the four regions of the country and spending at the moderate cost level are published regularly in Family Economics Review. Costs updated to annual average price levels appear in issue No. 2; costs updated to June price levels appear in issue No. 4. 1 Users of the estimates frequently request information on their use and interpretation. USDA Miscellaneous Publication No. 1411 (MP 1411) 2 provides descriptive information on the estimates as well as instructions on how to adjust the estimates for application to specific problems. Presented here are five of the tables from MP 1411 updated to 1983 price levels. Table 1 provides updated information for selecting the appropriate cost level. Table 2 includes Consumer Price Index data for adjusting the price levels of the estimates to recent years. Table 3 presents an example of the effects of backdating and projecting the child cost estimates; estimates for a child in an urban, north-central family spending at the moderate cost level are adjusted to show current dollar costs for a child born in 1966 and a child born in 1984. Tables 4 and 5 provide updated information on spending for child care and costs of higher education, respectively. 1 Estimates for children in farm families or for families spending at other cost levels are available from the Family Economics Research Group, Room 442A, Federal Building, Hyattsville, Md. 20782. 2 USDA Estimates of the Cost of Raising a Child: A Guide to Their Use and Interpretation, 1981, by Carolyn Summers Edwards. 1984 No.3 Family Economics Review 13 Users of the estimates often request information on other materials related to the child cost estimates. Therefore, recent references that are grouped into several topic areas are given below. SELECTED REFERENCES Child Care Kamerman, Sheila B. 1983. Child care services: A national picture. Monthly Labor Review 106(12): 35-39. Lueck, Majorie, Ann C. Orr, and Martin O'Connell. 1982. Trends in child care arrangements of working mothers. Current Population Reports. Series P-23, No. 117. U.S. Department of Commerce, Bureau of the Census. O'Connell, Martin, and Carolyn C. Rogers. 1983. Child care arrangements of working mothers: June 1982. Current Population Reports. Series P-23, No. 129. U.S. Department of Commerce, Bureau of the Census. Education Frankel, Martin M., and Debra Gerald, editors. 1982. Projections of Education Statistics to 1990-91. U.S. Department of Education, National Center for Education Statistics. Grant, W. Vance, and Leo J. Eiden. 1982. Digest of Education Statistics, 1982. U.S. Department of Education, National Center for Education Statistics. U.S. Department of Commerce, Bureau of the Census. 1982. Private school enrollment, tuition and enrollment trends: October 1979. Current Population Reports. Series P-23, No. 121. Indirect Costs Becker, Gary S. 1981. A Treatise on the Family. Harvard University Press, Cambridge, Mass. Chiswick, Carmel U. 1982. The value of a housewife's time. Journal of Human Resources 18(3):413-425. Gauger, William H., and Kathryn E. Walker. 1980. [revision, originally issued 1973]. The Dollar Value of Household Work. New York State College of Human Ecology Information Bulletin No. 60. Ithaca, N.Y. 14 Family Economics Review 1984 No.3 Juster, F. Thomas, and Frank P. Stafford. [In press]. Time, Goods and Well-Being. Institute for Social Research. Ann Arbor, Michigan. Peskin, Janice. 1983. The value of household work in the 1980's. Paper presented at the 1983 Annual Meeting of the American Statistical Association. [Toronto, Canada.] Virginia Polytechnic Institute and State University, Virginia Agricultural Experiment Station. 1981. Family Time Use: An Eleven State Urban/Rural Comparison. Bulletin VPI-2. Blacksburg, Va. U.S. Department of Agriculture, Agricultural Research Service. 1982. Special Issue: Household Production. Family Economics Review 1982(3). Expenditure Patterns Robey, Bryant, and Cheryl Russell. 1983. How consumers spend. American Demographics 5(10): 17-21. U.S. Department of Labor, Bureau of Labor Statistics. 1983. Consumer Expenditure Survey, Diary Survey. Bulletin 217 3. USDA Food Plans Cleveland, Linda E., and Betty B. Peterkin. 1983. USDA 1983 Family food plans. Family Economics Review 1983(2): 12-21. Kerr, Richard L., Betty B. Peterkin, Andrea J. Blum, and Linda E. Cleveland. 1984. USDA 1983 Thrifty food plan. Family Economics Review 1984(1): 18-25. The Changing American Family Bianchi, Suzanne M., and Daphne Spain. 1983. American Women: Three Decades of Change. CDS 80-8. U.S. Department of Commerce, Bureau of the Census. Glick, Paul C. 1984. How American families are changing. American Demographics 6(1): 20-25. Lowenstern, Henry, editor. 1983. Special section: Families. Monthly Labor Review 106(12):16-44. Masnick, George, and Mary Jo Bane. 1980. The Nation's Familes: 1960-1990. Joint Center for Urban Studies of MIT and Harvard University, Cambridge, Mass. [See abstract, Family Economics Review 1983(3): 20.] National Center for Health Statistics. 1982. Working Women and Childbearing: United States. Series 23, No. 9. U.S. Department of Health and Human Services, Public Health Service. [Data from the National Survey of Family Growth.] Payton, Isabelle S. 1982 •. Single-parent households: An alternative approach. Family Economics Review, winter issue, pp. 11-16. [Plus correction 1982 ( 4): 39.] U.S. Department of Agriculture, Agricultural Research Service. Watts, Harold W., and Donald J. Hernandez, editors. 1982. Child and Family Indicators: A Report with Recomendations. Social Science Research Council, Center for Coordination of Research on Social Indicators. Select Committee on Children, Youth, and Families U.S. House of Representatives, 98th Congress, 1st Session. 1983. Children, youth, and families: Beginning the assessment. [Hearing held in Washington, D.C., April 28, 1983.] _____ • 1983. Demographic and Social Trends: Implications for Federal Support of Dependent-Care Services for Children "and the Elderly. [A report together with additional views.] -----• 1983. Families in crisis: The private sector response. [Hearing held in Washington, D.C., July 12, 1983.] _____ • 1983. Prevention strategies for healthy babies and healthy children. [Hearing held in Washington, D.C., June 30, 1983.] -=-----· 1983. Supporting a family: Providing the basics. [Hearing held in Washington, D.C., July 18, 1983.] -----• 1983. Teen parents and their children: Issues and programs. [Hearing held in Washington, D.C., July 20, 1983.] _____ • 1983. U.S. Children and Their Families: Current Conditions and Recent Trends. A report together with additional views, May 1983. _____ • 1984. Federal Programs Affecting Children. [A report together with supplemental views. 1 Child Support Sanders, Ruth. 1981. Child support and alimony: 1978. Current Population Reports. Series P-23, No. 112. U.S. Department of Commerce, Bureau of the Census. _____ • 1983. Child support and alimony: 1981 (advance report). Current Population Reports. Series P-23, No. 124. U.S. Department of Commerce, Bureau of the Census. Research on the Cost of Raising a Child Boulier, Bryan L., and Robert A. Sylvester. 1983. Equivalence scales and estimates of the cost of children for the United States. Paper presented at the 53d Annual Conference of the Southern Economic Association. [Washington, D.C., November 22, 1983.] Edwards, Carolyn S. 1981. The cost of raising a child. American Demographics 3(7):24-29. _____ , Janet S. Marr, and Brucy C. Gray. 1982. The development of the USDA estimates of the cost of raising a child. Social Indicators Research 10(3): 227-271. Espenshade, Thomas J. 1984. Investing in Children: New Estimates of Parental Expenditures. The Urban Institute Press, Washington, D.C. Olson, Lawrence. 1983. Costs of Children. Lexington Books, Lexington, Mass. The Cost of Having a Baby Health Insurance Association of America. 1982. The Cost of Having a Baby. Washington, D.C. [See abstract, Family Economics Review 1984(3):19.] 1984 No.3 Family Economics Review 15 Table 1. Food plans 1 and child cost estimates, by size and income of family, 1983. Family size Income before taxes !-person 2-person 3-person 4-person 5-person 6-person Under $5,000 ••••••••••••• T T T T T T $5,001-$10,000 ••••••••••• L L Tor L T T T $10,001-$15,000 •••••••••• M Lor M Tor L Tor L T T $15,001-$20,000 •••••••••• M or Li Lor M Tor L Tor L T or L Tor L $20,001-$30,000 •••••••••• Li M L L Tor L Tor L $30,001-$40,000 •••••••••• Li M or Li M Lor M L L $40,001-$50,000 •••••••••• Li Li M or Li Lor M Lor M Lor M $50,001-$65,000 •••••••••• Li Li Li M Lor M Lor M $65,001-$80,000 •••••••••• Li Li Li Li M L or M $80,001-$95,000 •••••••••• Li Li Li Li Li M or Li $95,001 or more •••••••••• Li Li Li Li Li Li lT = thrifty, L =low, M = moderate, and Li = liberal. Table 2. Annual average Consumer Price Index (CPI) data for updating and backdating estimates of the cost of raising children [1967=100] Child cost budget category Food at home ••••••••••••• Food away from home ••••• Clothing ................ . Housing •................. Medical care ••••••••••••• Education •............... Transportation ••••••••••• Other ............•....... Annual totals of all budget item categories CP1 1 subindex Food at home ••••••••••• Food a way from home ••• Apparel and upkeep •••• Housing ............... . Medical care ••••••••••• Personel and educa-tional expenses ••••••• Transportation ••••••••• Personal care and personal and educational expenses average .............. . All items ••••••••••••••• 1980 251.2 270.1 177.4 263.2 267.2 236.4 250.5 224.6 247.0 1981 269.3 293.7 186.6 293.2 295.1 266.5 281.3 248.2 272.3 1Revised CPI for urban wage earners and clerical workers ( CPI-W). Source: U.S. Department of Labor, Bureau of Labor Statistics. 16 Family Economics Review 1984 No.3 1982 278.3 309.6 190.9 314.7 326.9 302.4 293.1 274.4 288.6 1983 281.3 323.2 195.6 322.0 355.1 335.1 300.0 297.1 297.4 Table 3. Current dollar estimates 1 of the cost of raising a child 2 born in 1966 and in 1984 at the moderate cost level in the urban North Central region Year Age of child (years) Total Food at home 3 Food away from heme Clothing Housing 4 Medical Educa- Transpor- Other 5 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 Total 1966-83 •• 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Total 1984-2001 Under 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Under 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 $1,316 1,397 1,372 1,~48 1,620 1,688 1,829 2,027 2,254 2,463 2, 713 2,886 3,366 3,827 4,282 4,698 5,469 5,643 50,298 4,312 4,664 4, 561 4,789 5,327 5, 593 6,118 6,678 7,012 7,364 8,031 8,431 9,456 10. 17 5 10' 68 5 ll, 217 12,933 13. 581 140,927 $194 238 245 257 310 317 321 460 528 572 695 736 831 1,023 1,105 1,185 1,371 1, 385 11,773 571 736 773 812 979 1,028 1,044 1,352 1,419 1,490 1,863 1,956 2,099 2,449 2,572 2,700 3,174 3,333 30,350 care Cost of raising a child born in 1966 6 0 0 0 0 $50 53 55 59 66 73 78 84 109 122 135 147 155 162 1,348 $66 69 ll8 125 130 134 190 197 2ll 221 229 239 357 373 397 418 592 607 4,673 $539 555 508 541 580 606 598 624 697 772 820 877 971 1,090 1, 262 1,406 1, 562 1,598 15,606 $70 75 79 85 90 96 99 103 112 126 138 151 164 179 199 220 244 265 2,495 Cost of raising a child born in 1984 7 0 0 0 0 172 181 190 199 209 220 231 242 305 321 337 354 371 390 3, 722 142 149 254 266 279 293 426 448 470 494 518 544 826 867 911 956 1,391 1,461 10,695 1,876 1,970 1, 819 1,910 2,005 2,105 2,095 2,200 2,310 2,425 2,547 2,674 2,911 3,057 3,210 3,370 3,663 3,846 45,993 278 292 307 322 338 355 373 391 411 432 453 476 500 525 551 578 607 638 7,827 tion tion 0 0 0 0 0 0 $43 44 47 51 53 56 70 76 83 94 107 ll8 842 0 0 0 0 0 0 166 174 183 192 202 212 222 234 245 258 270 284 2,642 $267 275 247 257 270 284 287 296 330 361 397 424 478 548 645 724 832 852 7,774 866 910 832 874 918 964 1,012 1,062 1,115 1,171 1,230 1, 291 1,456 1,528 1,605 1,685 1,953 2,050 22,522 $180 185 175 183 190 198 236 244 263 287 303 319 386 416 456 504 606 656 5,787 579 607 576 605 636 667 812 852 895 940 987 1,036 1,137 1,194 1, 254 1,316 1,504 1,579 17,176 1 Derived from table 8 of USDA Miscellaneous Publication No. 1411, USDA Estimates of the Cost of Raising a Child: A Guide to Their Use and Interpretation, October 1981, by Carolyn s. Edwards. 2 Child in family of husband and wife and no more than 5 children. 3 Includes home-produced foods and school lunches. 4 lncludes shelter, fuel, utilities, household operations, furnishings, and equipment. 5 Includes personal care, recreation, reading, and other miscellaneous expenditures. 6 Prices current in the years specified; calculated using indexes in table 2 rounded to nearest $1. 7 lnflated from 1983 constant dollar estimates at annual rate of 5 percent and rounded to nearest $1. 1984No.3 Family Economics Review 17 Table 4. Spending for child care by families with at least 1 member under 6 years old Nuni:>er of families with Proportion of Expenditures for child care Family type at least 1 families merrber Wlder reporting Average annual As proportion 6 years old arooWlt 1 of all family spending2 Thousands Percent Dollars Percent All families ............... 13,570 60 649 2.9 Husband-wife family ••••• 11,814 62 607 2.6 Nonblack •••••••••••••• 10,633 63 585 2.5 Black .•.•.••...•.••... 1,180 50 845 3.9 Wife employed ••••••••• 5,022 71 894 3.9 Wife not employed ••••• 6,536 55 312 1.3 Single-parent family ••••• 1, 756 48 1,024 7.3 Non black .............. 1,116 54 1,147 7.9 Black •••••..••......•. 641 39 724 5.7 Parent employed ••••••• 982 63 1,241 8.4 Parent not employed ••• 736 27 274 2.5 1Data derived from Public Use Tapes, Consumer Expenditure Survey--1972-73, U.S. Department of Labor, Bureau of Labor Statistics. All expenditure averages are based on only those families reporting child care expenditures. Figures are updated to 1983 annual average prices. 2Includes spending for food, alcoholic beverages, tobacco products, housing, clothing, drycleaning and laundry, transportation, health care, personal care, recreation, reading, education, and miscellaneous; excludes personal insurance, retirement, pensions, gifts, and contributions. Source: Updated from Epstein, Marsha Freeman, and Cynthia L. Jennings, 1979, Child care: Arrangements and costs, Family Economics Review, fall issue, pp. 3-6. 18 Fam i l y Ec o n om ics Re v i ew 1984 No . J Table 5. Estimated undergraduate tuition and fees, and board and room rates in institutions of higher education, 1983-84. Type and control Tuition and Board Dormitory Total tuition, of institutions required fees (7-day roans board and roan basis) All public institutions .............. $870 $1,210 $1,080 $3,160 Universities ....................... 1,270 1,250 1,150 3,670 Other 4-year •••••••••••••••••••••• 1,020 1,180 1,060 3,260 2-year ............................ 510 1,240 810 2,560 All nonpublic institutions ........... 4,880 1,390 1,270 7,540 Universities ....•.................. 6,140 1,610 1,560 9,310 Other 4-year ...................... 4, 750 1,320 1,160 7,230 2-year ............................ 3,300 1,260 1,260 5,820 Source: U.S. Department of Education, National Center for Education Statistics, [forthcoming.] Digest of Education Statistics 1983-84, table 129. Cost of Having a Baby This publication from the Health Insurance Association of America reports the results of a 1982 survey of costs associated with having a baby. Average costs of a maternity hospital stay and professional services are itemized for a usual and for a cesarean delivery in urban and rural areas for four regions and the United States as a whole. The average length of a stay in a hospital or birth center for childbirth under the care of a midwife and the cost of midwife professional services are also provided for urban and rural areas by region and the total United States. The average cost of a hospital stay in the United States was about $1,420 for a usual delivery in a birthing room and $1,450 for a usual delivery with labor and delivery rooms. Professional services for a usual delivery averaged about $642. The average cost was about $2,512 for the hospital stay and $828 for professional services for a cesarean delivery. The average cost of a basic layette, including baby's wardrobe and nursery items, nursery funishings, feeding equipment, bath items, and other miscellaneous costs, was priced at $851. A maternity wardrobe was estimated at $235 but could be more costly for employed mothers-to-be. Copies of this report may be obtained free of charge from Information, Reference, and Statistical Services, Public Relations Division, Health Insurance Association of America, 1850 K Street, N. W., Washington, D.C. 20006. 1984 No.3 Family Economics Review 19 Some New USDA Publications The following are for sale from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402, (202) 783-3238. 1983 YEARBOOK OF AGRICULTURE: USING OUR NATURAL RESOURCES. January 1984. Stock No. 001-000- 04387-1. $7. COMPOSITION OF FOODS. Revised August 1983. Stock No. 001-000- 04368-4. $7.50. FOOD CONSUMPTION: HOUSEHOLDS IN THE NORTH CENTRAL REGION, SEASONS AND YEAR 1977-78. August 1983. Stock No. 001-000-04374-9. $7.50. FOOD CONSUMPTION: HOUSEHOLDS IN THE NORTHEAST, SEASONS AND YEAR 1977-78. November 1983. Stock No. 001-000-04373-1. $7.50. FOOD CONSUMPTION: HOUSEHOLDS IN THE SOUTH, SEASONS AND YEAR 1977-78. August 1983. Stock No. 001-000-04375-7. $7.50. SCOPE AND METHODS OF THE STATISTICAL REPORTING SERVICE. Revised September 1983. Stock No. 001-000-04369-2. $5.00. An Aging Society 1 As of 1982, 11 percent of all Americans were age 65 and over. By the year 2025 this figure is projected to be 19 percent, and by the year 2050, one-third of the total population will be age 55 and older. Dramatic increases will occur particularily in the number of aged and very old persons, with the 85-and-over ca.tegory being the fastest 1 This report refers to the "older" population as age 55 and over, the "elderly" age 65 and over, the "aged" 75 years and over, and the "very old" 85 years and over. 20 Family Economics Review 1984 No.3 growing segment of the older population. The steady increase in the number of births that occurred prior to 1920 and following World War II is the primary cause of this trend. A secondary cause is increasing longevity. Overall life expectancy was 49 years in 1900, 70 years in 1954, and 74 years in 1981. Elderly women live longer than elderly men and currently outnumber them 3 to 2. This makes the health, social, and economic problems of the elderly mostly problems for women. Although their relative economic position has improved since 1970, incomes for the elderly still fall far below their younger counterparts. For example, in 1981 the median income for men age 65 and over was $8,200, compared with $15,000 for men age 60 to 64 and $21,000 for men age 45 to 54. Three-fourths of all elderly persons had incomes under $10,000 in 1981, whereas only 7 percent had incomes over $20,000. Although income is not a precise measure of economic well-being, statistics show the economic position of the elderly to be lower and less secure than that of the younger population. Social security is the single largest source of income for the elderly (over 91 percent receive benefits), but earnings make the greatest difference in their economic position. Those working year round, full time have incomes close to those of younger persons. However, labor force participation by elderly men has dropped rapidly in the last 30 years, from almost 50 percent in 1950 to less than 20 percent in 1981. Labor force participation by elderly women, however, has changed very little; it was 10 percent in 1950 compared with 8 percent in 1981. For older women t~ose age 55 to 64, labor force participa~ bon has steadily increased, from 27 percent in 1950 to 42 percent in 1982. Unemployment for the elderly is low (4. 7 percent for 1982). However, once the elderly lose their jobs they are more likely to stay unemployed longer, earn less in subsequent jobs, and give up looking sooner than younger persons. One out of seven elderly persons lived in poverty in 1981. Poverty rates were highest for the more aged, for women and minorities, and also for those who lived alone, lived in small towns or rural areas, were not married, did not work, and depended on social security as their sole source of income. The Government's definition of poverty is based only on money income and does not include the value of in-kind transfers. Estimating the market value of means-tested (income determined) benefits such as food stamps, subsidized housing, and medicaid is difficult and controversial. If these benefits were included, the poverty rate would change. In spite of large sums of money in the Federal budget designated for services to the elderly, poverty persists. Reasons for this include the large number of elderly below the poverty line who do not participate in the means-tested programs, and the fact that most of the money spent on the elderly goes toward social insuran·ce programs, like social security and medicare, which are not targeted at the poverty population. Also, the principle means-tested program, Supplemental Security Income, pays maximum benefits that fall below the poverty level. The elderly are healthier than sometimes assumed. Not until age 85 do half of the elderly population report being limited in carrying out a major activity. However, elderly health expenditures have climbed faster than both income and inflation. Living arrangements of the elderly differ greatly between men and women. Threefourths of all elderly men are married and living with their wives, whereas half of elderly women are widowed and a substantial proportion live alone. Source: U.S. Department of Commerce, Bureau of the Census, 1983, America in transition: An aging society, Current Population Reports, Special Studies, Series P-23, No. 128. Health Care Expenditures for the Elderly-Medicare Coverage In 1980 medicare spent almost $31 billion on health care for persons 65 years of age or over (the elderly). This accounted for 45 percent of the elderly population's total health care cost, up from 35 percent in 1970. Although medicare's share of the elderly's health care expenses has increased, total health care costs have increased also. Thus, on a per capita basis, health care expenditures not paid by medicare claimed a larger share of the elderly's total income in 1980 than in 1970 (up to 19 percent from 17 percent of total income). In 1965, prior to medicare, the elderly paid about 20 percent of their income for health care. Despite significant increases in the cost of hospital care, medicare has increased its original share of hospital expenditures, covering 74 percent of hospital bills in 1970 and 82 percent in 1980. When hospital costs are considered as a percentage of the elderly's income, the amount not covered by medicare has declined from 2. 8 percent to 2.6 percent. Medicare's share of charges for physicians' services has remained the same (59 percent) between 1970 and 1980. As a result, the share of the elderly's income going to pay physicians has increased from 1.9 percent to 2.65 percent. Of the expenditures not covered by medicare, the major share is paid directly by the beneficiary. In 1980 an elderly person's total out-of-pocket payments for health expenditures not covered by medicare amounted to $768. These direct out-of-pocket payments include copayments and charges in excess of payments from medicare as well as services not covered by medicare. They do not include, however, premiums paid by beneficiaries for medicare or for private supplemental insurance. Source: U.S. Senate, Special Committee on Aging, 1982, 97th Congress, 2d Session, Health Care Expenditures for the Elderly: How Much Protection Does Medicare Provide? 1984 No.3 Family Economics Review 21 American WomenThree Decades of Change This new report published by the Bureau of the Census focuses on demographic, economic, and social changes experienced by American women. Data from 1950 through 1980, extracted from a variety of census sources, are analyzed to study changes in marital status, fertility, living arrangements, education, occupation, and income. Recent trends toward marrying later and more frequent divorces are resulting in a higher probability that women will head their own households at some time during their lives. Of all adult women, more than 25 percent headed a household in 1980, compared with 15 percent in 1950. Labor force participation by women has increased substantially and has been accompanied by changes in fertility patterns. In 1980 approximately one-half of all adult women worked outside the home; one-third worked outside the home in 1950. On the average, women are now having two children each, whereas in 1950 they were more likely to have three each. Women continue to occupy traditionally female occupations such as secretarial and clerical jobs. In addition, women still earn less than men when education and occupation are similar. In 1980 women's earnings were two-thirds those of men, reflecting no substantial change since 1950. Households headed by women account for an increasing proportion of housholds in poverty. Educational attainment of women has risen, and their college enrollment is now similar to that of men. Since 1950 the proportion of female college graduates has doubled. However, women still receive fewer professional and graduate degrees than men. American Women: Three Decades of Change, CDS 80-8, Stock No. 003-024-05743-3, is available for $3.50 from the Superintendent of Documents, U.S. Government Printing Office, Washington, D. C. 20402. 22 Family Economics Review 1984 No.3 Farm Population of the United States, 1982 About 1 out of every 41 persons, or 2.4 percent of the Nation's total population, had a farm residence in 1982. 1 Using Current Population Survey (CPS) data for a 12-month period centered on April 1982, the Bureau of the Census of the U.S. Department of Commerce and the Economic Research Service of the U.S. Department of Agriculture estimated that 5,620,000 persons lived on farms. During that period, there were 179,000 black farm residents, which represented 3.2 percent of the total farm population. In 1982 the median age of farm residents was about 35 years, as compared with 30 years for the nonfarm population. The labor force participation rate for farm residents (65 percent) was somewhat higher than the rate for nonfarm residents (62 percent). Data from the March 1982 CPS indicate that farm families were more likely than nonfarm families to include a married couple (93 percent compared with 81 percent) and less likely to have a female householder (no husband present). In 1981 the median income of farm families continued to be substantially lower than that for nonfarm families ($17,082 and $22,554, respectively). Farm families are also more likely to be in poverty than are nonfarm families; about 20 percent of farm families but only 11 percent of nonfarm families were below the poverty level in 1981. 1The farm population consists of all persons living in rural territory on places which had, or normally would have had, sales of agricultural products of $1,000 or more during the reporting year. Source: U.S. Department of Commerce, Bureau of the C~nsus, Economic Research Service, 1983, jointly with U.S. Department of Agriculture, Farm population of the United States: 1982, Current Population Reports, Farm Population, Series P-27, No. 56. Nutrient Content of the U.S. Food Supply, 1982 Changes in nutrient levels, with emphasis on fatty acids and cholesterol, are reported by Ruth M. Marston and Susan 0. Welsh in an article, "Nutrient Content of the U.S. Food Supply, 1982" which appears in the winter 1984 issue of the National Food Review (NFR-25). Nutrient levels changed 5 percent or less between 1981 and 1982. Dec~ines were reported for food energy, protein, fat, carbohydrate, iron, thiamin, riboflavin, niacin, and vitamin B 12, whereas gains were indicated for calcium and ascorbic acid. Levels for phosphorus, magnesium, vitamin A, and vitamin B6 were the same in 1981 and 1982. Changes in nutrient levels were considerably larger between 1967-69 and 1982, ranging from 1 to 14 percent higher for food energy, carbohydrate, fat, riboflavin, thiamin, niacin, vitamin B6• and ascorbic acid. Levels were 1 to 8 percent lower for vitamin A, calcium, magnesium, phosphorus, and vitamin B12· Levels for protein and iron were the same in 1967-69 and 1982, despite some fluctuation during the intervening period. A review of trends in the levels of fatty acids showed the effect of the shift from animal to vegetable sources of fat, as well as the increase in total fat level. Since the beginning of the century, the proportion of total fat from saturated fatty acids declined appreciably; the proportion from linoleic acid more than doubled, and the proportion from oleic acid remained the same. The cholesterol level of the food supply has fluctuated downward since the mid forties. During this period, it has been provided by the same four food groups (in descending order )--eggs; meat, poultry, and fish; dairy products; and fats and oils. Major Programs of the Bureau of Labor Statistics This publication provides a concise summary of the nature and scope of the major statistical programs and services of the Bureau of Labor Statistics. Descriptions of what data are available, the form of publication, some of the uses of the data, and how to obtain the data are organized into six areas as follows: Employment and unemployment, prices and living conditions, wages and industrial relations, productivity and technology, occupational safety and health, and economic growth and employment projections. A 12-page table summarizes State and area data that are available. Major Programs: Bureau of Labor Statistics, Report No. 693, is available from the Inquiries and Correspondance Section, Room 2421, Bureau of Labor Statistics, U.S. Department of Labor, Washington, D.C. 20212. 1980 Census of Population and Housing Users' Guide-Part C The Bureau of the Census has released another supplement to the Users' Guide that compliments previous releases •1 The newest volume, Part C, an Index to Summary Tape Files 1 to 4, features a subject crossreference and a key to geographic areas. These features help users locate data files quickly. The index also features a complete set of outlines of these files, which include a detailed listing of the contents of each table. Part C, Index to Summary Tape Files 1 to 4, Supplement 2, Stock No. 003-024-05771-9 is available for $4.25 from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402. Additional supplements will be made available in the future. 1 For a review of Parts A and B of the Users' Guide, see Family Economics Review 1984(2)20. 1984 No.3 fam i ly Econom i cs Rev i ew 23 New Ruling for Mortgage Insurance Premiums Home buyers financing their purchases with mortgages insured by the Federal Housing Administration of the U.S. Department of Housing and Urban Development (FHA/HUD) now have the opportunity to choose the method of paying for their mortgage insurance premiums (MIP's). 1 Effective September 1, 1983, new regulations call for a one-time charge of the entire MIP rather than monthly installments paid to the lender. Home buyers may choose to pay this one-time charge in cash at settlement or to pay a portion at settlement and finance the remainder by adding to the loan amount. Those paying more than the minimum downpayment may also choose to finance the entire MIP. The new collection system does not change the total amount paid for. the mortgage insurance, although borrowers who choose to finance all or part of the MIP are charged a higher MIP and incur a higher financing cost. There may be several advantages to this, however. First, a borrower who finances the MIP will need less cash at settlement; second, adding the MIP to the loan increases the portion of the monthly payment that qualifies as a tax deduction. Under the old regulations, the monthly MIP was a nondeductible expense at tax time. Under the new regulation, any of the MIP that is financed is amortized over the life of the loan. For example, a borrower financing the purchase of a $70,000 house with a 13 percent, 30-year fixed rate mortgage of $50,000 would have paid an initial MIP of about $21 a month in addition to monthly principal and interest payments of about $553--or a total of about $574 per month-prior to the change in regulations. Under 1 Mortgage insurance is intended to encourage lenders to make loans when the downpayment is low relative to the price of the house. Home buyers in this situation are considered high risk borrowers. Mortgage insurance offers protection to the lender against losses due to foreclosure. As the insurer, FHA/HUD promises to pay the lender most of these costs. 24 Family Economics Review 1984 No.3 the new regulation, this borrower may choose to pay a one-time premium of $1,830.50 at settlement. Monthly principal and interest payments would remain at about $553. Alternatively, the borrower could finance some or all of the MIP. Financing the total MIP, which would be $1,900, would yield monthly principal and interest payments of about $574. Deductible financing costs over the 30 years would be about $149,116 for the borrower who paid the MIP in cash at settlement and about $154,771 for the borrower who financed the entire MIP. The programs affected by the new MIP collection and calculation procedures include FHA/HUD's mortgage insurance for fixed-payment mortgages under section 203(b) of the National Housing Act, for single-family homes in outlying areas under section 203(n), and for graduated payment mortgages under section 245. Single-family mortgages subject to coinsurance are not affected by the one-time premium payment rule at this time. Source: Department of Housing and Urban Development, 1983, Office of the Assistant Secretary for Housing, Federal Housing Commissioner, One-time mortgage insurance premium, Federal Register 48 (122): 28794- 288-11. Synopsis of the Annual Energy Review and Outlook, 1982 This booklet provides historical energy statistics and projections of the Nation's energy future. It is a synopsis of two major reports produced by the Energy Information Administration of the U.S. Department of Energy--the 1982 Annual Energy Review and the 1982 Annual Energy Outlook. Historical statistics for the period 1960-82 are provided for energy supply and consumption, resources available, domestic production rates and capacities by energy type, and price of U.S. -produced energy by type. Projections of domestic and international supply, production, and consumption for the period 1983-90 are included in detailed tables. Reference features include the following: GNP implicit price deflators, thermal conversion factors, and a glossary of terms. This publication, DOE/E/ A-0385(82), is available free of charge by writing to the Energy Information Administration, National Energy Information Center, U.S. Department of Energy, Washington, D. C. 20585. Bureau of the Census Catalog, 1982-83 This recently issued publication provides content and ordering information for products released by the Bureau of the Census. The catalog includes an overview of all products issued since 1980, followed by 11 topic sections including business, construction and housing, and population. A special section on the 1980 Census of Population and Housing describes all products released through spring 1983 in all formats--printed reports, microfiche, computer tapes, paper prints, and maps. Additional sections describe all products from the 1977 economic and 1978 agricultural censuses. For each product listed, subject content, geographic areas covered, dates, and ordering information are provided. Reference features include a directory which lists names and addresses of many sources of assistance, as well as information about the census and survey programs of the Bureau. The Bureau of the Census Catalog: 1982-83, Stock No. 003-024-05768-9, is available for $6.50 from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402. Agrtcultural Outlook '85-New Date Announced The Agricultural Outlook Conference will be held from December 3 to December 6, 1984. "Home Economics: Outlook for Families" will feature several speakers who will address problems facing families in a changing social and economic environment. This Conference is free. Please preregister by writing: Outlook '85, Room 5143, South Building, Washington, D.C. 20250. To obtain Conference materials and a building pass, Conference participants are asked to go to the Patio in USDA's Administration Building at 12th and Independence Avenue, S.W., Washington, D.C. An informal pre-Conference home economics brunch will be held on Monday, December 3, at Hogates Seafood Restaurant, 9th and Maine Avenue, S.W., Washington, D.C. To make a reservation please send a check for $13.25, payable to HE-170, to Velda Rankin, ES-USDA, Room 3443, South Building, Washington, D.C. 20250. The cost will be $14.50 at the door for reservations not made or received by Wednesday, November 21. The time of the luncheon and the speaker will be announced at a later date. A special telephone line service (900-line) will provide line access to speeches given at the Outlook '85 Conference. There is a per minute charge to the caller. Please note that the pre-Conference home economics brunch will not have 900-line service. Information for the Outlook for Families program can be obtained from Kathleen K. Scholl by writing to Family Economics Research Group, ARS-USDA, Room 442A, Federal Building, Hyattsville, Md. 20782, or by calling 301-436-8461. 1984 No.3 Family Economics Review 25 N "..', Ill .3.. .. ...... "< ,.,., n 0 ::J 0 .3.. .. n "' ::0 (1) .<.. . (1) :1: "Q') -'>- z 0 "' Cost of food at home estimated for food plans at 4 cost Zeyezs, April 1984, U.S. average 1 Cost for 1 week Cost for 1 month Sex-age group Thrifty Low-cost M:xterate- Liberal Thrifty Low-cost M:xterate- Liberal plan plan cost plan plan plan plan cost plan plan FAMILIES Family of 2 :2 20-50 years •••••••••••••••••••••••• $37.10 $46.40 $57.10 $70.60 $160.70 $201.20 $247.50 $305.70 51 years and over •••••••••••••••••• 35.20 44.50 54.50 64.90 152.50 192.60 236.30 281.60 Family of 4: Couple, 20-50 years and children-- 1-2 and 3-5 years •••••••••••••••• 53.70 66.60 81.10 99.00 233.10 288.60 351.70 429.10 6-8 and 9-11 years ••••••••••••••• 61.70 78.10 97.50 117.30 267.10 338.60 422.80 507.60 INDIVIDUALS3 Child: 1-2 years •••••••••••••••••••••••••• 9.60 11.60 13.50 16.10 41.80 50.40 58.60 70.00 3-5 years .......................... 10.40 12.80 15.70 18.70 45.20 55.30 68.10 81.20 6-8 )iears •••••••••••••••••••••••••• 12.80 16.80 21.00 24.60 55.30 72.80 91.10 106.40 9-11 years ••••••••••••••••••••••••• 15.20 19.10 24.60 28.50 65.70 82.90 106.70 123.30 Male: 12-14 years ........................ 16.00 21.70 27.10 31.80 69.20 94.20 117.40 137.60 15-19 years •••••••••••••••••••••••• 16.60 22.60 27.90 32.30 72.00 98.00 120.90 140.10 20-50 years •••••••••••••••••••••••• 17.70 22.40 28.00 33.70 76.70 97.20 121.30 145.80 51 years and over •••••••••••••••••• 16.10 21.30 26.00 31.10 69.90 92.10 112.80 134.90 Female: 12-19 years ........................ 15.80 18.90 22.80 27.50 68.60 82.00 99.00 119.40 20-50 years •••••••••••••••••••••••• 16.00 19.80 23.90 30.50 69.40 85.70 103.70 132.10 51 years and over ••......•••••.••• 15.90 19.20 23.50 27.90 68.70 83.00 102.00 121.10 1 Assumes that food for all meals and snacks is purchased at the store and prepared at home. Estimates for the thrifty food plan were computed from quantities of foods published in Family Economics Review, 1984 No. 1. Estimates for the other plans were computed from quantities of foods published in Family Economics Review, 1983 No. 2. The costs of the food plans are estimated by updating prices paid by households surveyed in 1977-78 in USDA's Nationwide Food Consumption Survey. USDA updates these survey prices using information from the Bureau of Labor Statistics (CPI Detailed Report, table 3) to estimate the costs for the food plans. 2 10 percent added for family size adjustment. See footnote 4. 3 The costs given are for individuals in 4-person families. For individuals in other size families, the following adjustments are suggested: 1-person--add 20 percent; 2-person--add 10 percent; 3-person--add 5 percent; 5- or 6-person--subtract 5 percent; 7- or more-person--subtract 10 percent. () 0 5!l. 9. t-rj 0 0 0. a :X: 0 ~ Consumer Prices Consumer Price Index for all urban consumers [ 1967 = 100] Group All i terns •••••••••••••••••••••••••••••••••••• Food ...•.•...........•..................•. Food at home ...•.•..................•... Food away from home •••••••••••••••••••• Housing ................. • ................ . Shelter . ................................ . Rent, residential •••••••••••••••••••••• Fuel and other utilities ••••••••••••••••• Fuel oil, coal, and bottled gas •••••••• Gas (piped) and electricity •••••••••••• Household furnishings and operation ••••• Apparel and upkeep ••••••••••••••••••••••• Men's and boys' ........................ . Women's and girls' ..•.•...•.••...•..•...• Footwear ...••.•......•..•............•.. Transportation ....••.•••..••.•..••.•..•••• Private ................................. . Public .. •.......•....•..........••....... Medical care .............................. . Entertainment ...............••..•..••.•.•• Other goods and services •••••••••••••••••• Personal care ••••••.••.•.••..•.••.••.•.•• Apr. 1984 308.8 302.3 292.8 330.9 333.2 357.8 246.4 380.9 650.7 432.3 242.3 199.2 190.6 163.2 208.9 309.6 304.8 377.1 375.7 253.8 302.8 268.9 Mar. 1984 307.3 302.2 293.1 329.8 331.5 355.5 244.8 380.1 660.0 429.5 241.2 198.8 189.9 163.3 207.7 306.9 301.9 377.4 374.5 251.7 302.1 267.8 Source: U.S. Department of Labor, Bureau of Labor Statistics. Feb. 1984 306.6 302.1 293.6 328.5 331.0 354.0 243.6 383.0 688.6 429.0 240.4 196.2 187.9 159.0 206.4 305.8 300.8 377.4 373.2 251.5 301.5 267.9 Apr. 1983 295.5 291.9 283.4 318.0 320.3 ~ 341.7 234.5 363.6 610.6 420.5 239.0 ...lJ!.5. 5 187.8 160.6 207.5 292.3 m.5 361.1 -la.3. 5 244.6 283.2 259.1 1984 No.3 Family Economics Review 27 -tr UB. 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