Family Economics Review [1986, Number 2]

              Editor
Marilyn Doss Ruffin
Managing Editor
Sherry Lowe
Editorial Assistant
Nancy J. Bailey
Family Economics Review is
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~ Economics
Review
1986 No. 2
Contents:
Economic Outlook for Families--1986
Colien Hefferan
Farm Fa milies : Economic Outlook for 1986
Kathleen K. Scholl
Recent Trends in Clothing and Tex tiles
Joan C. Courtless
Food Habits of Vietnamese Immigrants
Amy Tong
Abstracts
Award and Receipt of Child Support and Alimony
Food and Nutrient Intakes by Women and Children, Spring 1985
Households, Families, and Living Arrangements, March 1985
Regular Features
Some New USDA Publications
Some New USDA Charts
Consumer Prices
Updated Estimates of the Cost of Raising a Child
Cost of Food at Home, U.S. and Regions
Room 442A. Hyattsville. Md. 20782 I s sued April 1986
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10
17
28
16
26
32
9
31
33
34
36
Economic Outlook for
Families -19861
By Colien Hefferan
Economist
The economic environment in which families
make decisions was characterized by sus­tained
growth and moderate price increases
in 1985. Slow growth in Gross National
Product (GNP) and prices is projected for
1986.
Real GNP rose at a 4. 3-percent annual rate
in the third quarter of 1985, compared with
a 1.1-percent annual rate in the first half
and a 2.8-percent rate since mid-1984/
Growth was led by a strong increase in
consumer spending in July. August, and
September, with real final sales increasing
at a 4.1-percent annual rate. 3 Prices, as
measured by the Consumer Price Index for all
Urban Consumers (CPI-U), rose 0.2 percent
each month during the third quarter to an
overall level 3.2 percent higher than the
same quarter of 1984."
Consensus forecasts for 1986 are generally
conservative, suggesting real GNP will
increase about 2.5 percent and prices 4.0 to
5.0 percent. Few forecast a major recession
in 1986; similarly. few forecast strong.
sustained growth. Factors that bode well for
the economy in 1986 include a high level of
consumer confidence; stabilizing, and in
some cases declining. energy prices; and
small inventories. Potential problems
1 This article is adapted from a paper pre­sented
at the Agricultural Outlook Conference
in December 1985 in Washington, DC.
2 Estimates of GNP are published monthly
in the Survey of Current Business,
U.S. Department of Commerce, Bureau of
Economic Analysis.
3 October figures are based on flash
estimates compiled from limited and
preliminary data and therefore are subject
to considerable revision.
"Monthly CPI data are published in News
and the CPI Detailed Report. U.S. Depart­ment
of Labor, Bureau of Labor Statistics.
Current CPI information is also available
via taped telephone message at 202-523-1239.
\ For Building Use Only \
include persistently high real interest
rates, high debt levels, surging imports,
and excess indus trial capacity.
Although economic growth and relative
price stability during the past several
years have improved the economic security of
many families, the process of growth has
been uneven and has created risks for indi­viduals
and families. Growth requires that
both labor and capital be continuously
reallocated to their most efficient uses.
In this process, new industries replace
established ones and production shifts from
one sector, region, or nation to another.
The process of resource reallocation,
coupled with other economic trends such as
shifting imports and exports and changing
demand for products and skills, have been
particularly critical for some segments of
the population. Farmers and their families;
workers in mining. heavy indus tries. and
textiles; and households with just one adult
available to work have seen their opportu­nities
for advancement and financial secu­rity
diminish. In addition, all families
find that in periods of rapid economic
change financial decision making is both
more complicated and more important.
This paper reviews the economic conditions
and trends affecting both the income and
expenditure sides of the family ledger, as
well as indicators of the ability of
families to balance the two. Financial
management issues are examined in light of
current economic conditions and the outlook
for families.
Employment and Income
Employment and income trended upward in
1985, extending a 3-year path. Both are
likely to continue growing in 1986. although
at a diminishing rate.
Civilian employment reached 107.9 million
in October, matching the record high
employment-population ratio of 60.3 percent
set in March 1985. 5 Over the year the number
5 Employment data are published monthly in
News and Employment and Earnings,
U.s. Department of Labor, Bureau of Labor
Statistics.
1986 No.2 Family Economics Review 1
employed increased 2.2 million. Most of the
employment gains occurred among adult
women. Service sector and white-collar jobs
were the primary focus of growth. More than
half of the increase was among managers and
professionals; in addition, strong gains
were shown among administrative support
workers. Manufacturing employment, including
machine operators, assemblers, and inspec­tors,
declined during the January-September
period, however.
Unemployment in 1985 stabilized near the
7 percent level, although rates varied wide­ly
by population and occupational groups.
For example, in October, when the unemploy­ment
rate for all civilian workers was 7.1
percent, unemployment was 6.1 percent among
whites, compared with 15.0 percent among
blacks, and 6.2 percent among adults, com­pared
with 20.1 percent among teenagers.
Managerial and professional workers experi­enced
2.3 percent unemployment compared with
10.6 percent for operators, fabricators, and
laborers.
Employment, of course, is the major factor
influencing income. Wage and salary income,
which amounts to about 60 percent of
personal income, sustained growth of nearly
6 percent in 1985. Growth in total personal
income, as measured in the aggregated
National Income and Product Accounts (NIP A),
slowed sharply in recent months, however, to
an annual rate of 4.7 percent, down from 7.4
percent at the beginning of 1985. Declining
farm income and personal interest income
account for much of the slower growth in
total income over the year.
The trend toward erosion of earned income
and expansion of nonearned income that pre­vailed
early in the decade will be reversed
if wages continue to lead income growth in
1986. This would mean that relative income
gains made by nonfamily households, includ­ing
single elderly persons, would be lost (_!).
On the other hand, with trade pressures and
with unemployment above its historical
average, wage growth is likely to moderate
in 1986. This would mean that gains would be
similar across all sources of income and
consequently the relative income position of
earners and nonearners would remain about
the same in 1986 as earlier in the decade.
Z Fa111ily Economics Review 1986 No. z
The population is changing. There is a
growing cohort of persons ages 25 to 39 in
the population. This change most often has
been associated with spending patterns,
credit use, and saving, but it also has
important implications for job opportunities
and income levels. The economy has success­fully
expanded to create jobs for new
workers; however, it has been less success­ful
in creating opportunities for advance­ment.
Currently, there is evidence of a
growing "opportunity crunch" in which many
workers find there are few chances for
advancement. A growing number are respond­ing
by assuming the risks of self-employment
and are joining the entrepreneurial move­ment.
As more families have two earners, the
costs and risks of self-employment are more
easily borne within households. Self-employed
workers and their families carry an
extra burden for financial management
activity in order to assure that they
maintain adequate health insurance and
retirement plans.
There are related employment and income
consequences arising from changes in the
population. As more families have entered
the childbearing and rearing years,
geographic mobility has declined. In 1970,
one in five households moved: in 1984, one
in six moved. Like the trend in self­employment,
mobility also may be influenced
by growth in the number of two-earner
families.
Reduction in the poverty rate has been an
important consequence of growing personal
income. After increases in the number and
percent of persons below the poverty line in
1982 and 1983, the poverty rate declined to
14.4 percent in 1984.6 Following the pattern
set in 1982 and 1983, however, poverty is
6 The poverty threshold for a family of
four was $10,609 in 1984. It is expected to
increase to about $11,000 in 1985. See
"Poverty thresholds and poverty guidelines,"
Family Economics Review 1985(1): 17-18, for
details on calculation.
becoming more concentrated among households
with children under 18 years old, whereas
households headed by persons 65 and older
are less likely to be in poverty.
The poverty population may be changing in
other ways as well. Duncan et al. argue that
from · year to year "an astonishing amount of
turnover takes place in the low-income
population" <.!. p. 3). Changes in family
composition, especially divorce and remar­riage;
movement into and out of the labor
force; and other critical life events, such
as illness and disability, generate massive
swings in income and demands on income.
Households in which the breadwinners work
in trade-sensitive industries and those with
only one earner will be especially
vulnerable to such swings in 1986.
Information on household income lags that
available on aggregate personal income by
about 1 year. The latest figures show median
family income rose to $26,433 in 1984, 3.8
percent above the 1983 level after adjusting
for inflation (see table 1). Families in the
West, married-couple families, and female­headed
families with no husband present
showed the greatest income gains. Although
household income data for 1985 will not be
available until the March 1986 Current
Population Survey, trends in the personal
income component of the NIPA, as well as
continued labor force expansion, suggest
that the income growth experienced in 1984
will extend into 1985 and 1986.
A major issue influencing income available
to families in 1986 is proposed income tax
reform. In 1983, the most recent year for
which data are available, taxes absorbed
about 21 percent of total income received by
households (~). 7 Although the tax liability
of families has declined in recent years as
a result of the Economic Recovery Tax Act
of 1981, not all families have benefited
equally. The tax burden on families with
children, female-headed families, and
poverty level households has been of
particular concern.
7 Taxes included Federal individual income
taxes, State individual income taxes, FICA
and Federal retirement payroll taxes, and
property taxes on owner-occupied housing.
The House Select Committee on Children,
Youth, and Families evaluated major tax
reform proposals, concluding that those most
"pro-family" adjusted the personal exemption
to better accommodate the rising cost of
children, increased the standard deduction
or zero-bracket amount to reduce or elimi­nate
tax on poverty level households, and
extended tax-deferred Individual Retirement
Accounts (IRA's) to full-time homemakers
(1_, _!). Many of these reforms are incorpo­rated
into tax plans currently debated in
Congress (see table 2).
Expenditures
Consumer spending has driven the recent
upturn in the economy much as it has led
economic growth during the past several
years. The question for 1986 is whether
consumers can sustain spending at levels
sufficient to continue fueling economic
growth.
Spending is determined by willingness and
ability to buy. Both of these factors were
in abundant supply in 1985. The Index of
Consumer Sentiment registered 96.0 in
January 1985, up three points from its level
at the close of 1984.8 Although down
slightly in September at 92 .1, it continued
strong throughout the year. Similarly,
consumers entered 1985 with high and growing
levels of personal income. Problems that may
have distorted spending patterns in the
past--such as rapid and erratic price
increases, high nominal interest rates, and
prolonged unemployment--were resolved for
many families in 1985.
Inflation continued a subdued course
in 1985. The price of consumer goods
increased at an annual rate of only 0. 4
percent from March through September.
Aided by a flood of Japanese and European
8 This measure of consumer confidence is
collected as part of the Survey of Consumer
Attitudes by the Institute for Social
Research, University of Michigan.
1986 No.2 Family Econom i cs Rev i ew J
imports, the price of durable goods actually
declined at a 4. 5-percent annual-adjusted
rate during the same period. Services, led
by medical care, increased at a 5. 3-percent
annual rate, bringing the CPI-U to a
2.8-percent annual rate of increase for
March through September. This year is
expected to end with about a 3.3-percent
increase in prices.
After years of living with the "false
charm of inflationary growth" (~, p. 49),
moderating costs have raised a new and some­what
unexpected concern: How to cope with
the rigors of a noninflationary economy. In
the seventies, inflation reduced the real
cost of borrowing, encouraging families to
mortgage future earnings to meet current
consumption needs and wants. Inflation a!.so
reduced the value of cash balances, leading
some families to deplete cash reserves in
favor of illiquid, but inflation-resistant,
assets. Today these households find that
Table 1. Comparison of median family money income in 1984 and 1983, by selected
characteristics
Median family incane
Olaracteristic
All families ...•.......................
Race of householder :
White . ••••••••••••.•••••..••..••..•.•
Black •....•.•.•.•.•....•.•••........
Spanish origin 1
Region:
Northeast .•....•...................•
Mid west ••.....•...........•.........
South •...•..........................
West •••••••••••••••••••••••••• • • • • • •
Type of family:
Married-couple family ••••••••••••••••
Wife in paid labor force •••••••••••
Wife not in paid labor force •••••••
Male householder, no wife present •••
Female householder, no husband
present ........................... .
1984
$26,433
27,686
15,432
18,833
28,487
26,753
24,094
28,077
29,612
34,668
23,582
23,325
12,803
1 Persons of Spanish ongm may be of any race.
2 Not statistically significant at • 05 level.
1983
Constant Ulrrent
dollars dollars
$25,465 $24,580
26,684 25,757
15,028 14,506
17,566 16,956
27,638 26,678
25,620 24,730
23,305 22,495
26,513 25,592
28,268 27,286
33,263 32,107
22,678 21,890
22,631 21,845
12,213 11,789
Percent
change in
real money
incane
3.8
3.1
4.4
3.4
5.9
4.8
4.2
4.0
3.1
4.8
Source: U.S. Department of Commerce, Bureau of the Census, 1985, Money income of
households, families, and persons in the United States: 1983, Current Population Reports,
Consumer Income, Series P-60, No. 146; calculations based on unpublished data from the
March 1985 Current Population Survey.
• f am i ly Ec onom i cs Rev i ew 1986 No.2
Table 2. Selected features of current Federal income tax law and tax reform proposals before
Congress, December 1985
Feature
Individual tax rates
Exemptions
Standard deductions:
Single
Joint
Head of household
Two-earner deduction
Child care expenses
Income averaging
Health insurance
Itemized deductions:
State and local
taxes
Mortgage interest
Other personal
interest
Retirement savings:
IRA
Spousal IRA
Ulrrent law
(1986)
14 brackets from
11 to 50 percent,
indexed.
$1,080, indexed.
$2,480, indexed.
$3,670, indexed.
$2,480, indexed.
Yes.
Tax credit of
30 percent, up to
$720 for singles,
$1,440 for marrieds.
Yes.
Employer paid
premiums not taxed
as income.
Deductible.
Deductible.
Deductible.
$2,000.
$250.
Administration
proposal
3 brackets: 15, 25'-,
and 35 percent,
indexed.
$2,000, indexed.
$2,900, indexed.
$4,000, indexed.
$3,600, indexed.
No.
Tax credit of
30 percent, up to
$720 for singles,
$1,440 for marrieds.
H.R. 3838
4 brackets: 15, 25,
35, and 38 percent,
indexed.
$2,000, indexed, for
nonitemizers.
$1,500, indexed, for
itemizers.
$2,950, indexed.
$4,800, indexed.
$4,200, indexed.
No.
Tax credit of
30 percent, up to
$720 for singles,
$1,400 for marrieds.
No. No.
Employer paid Employer paid
premiums taxed up to premiums not taxed
$120/year for as income.
individual, $300/year
for family.
Not deductible.
Deductible for
principal residence.
Limited to $5,000
over investment
income.
$2,000.
$2,000.
Deductible.
Deductible for
2 residences.
Limited to $20,000
over investment
income.
$2,000.
$250.
Source: Joint Committee on Taxation and House Ways and Means Committee, 99th Congress
of the United States.
1986 No.2 Family Economics Review ~
paying back debt with noninflated wages can
severely strain the family operating budget.
Similarly, inflation-resistant assets such
as housing and farmland--which families bor­rowed
money to purchase or borrowed against
to finance other investments or needs--may
have declined in value, resulting in
declining net worth and increasing risk of
bankruptcy.
Financial readjustments have been required
for others as well. Retired persons living
on interest income from savings have seen
their earnings sink as inflation and, sub­sequently,
nominal interest rates have
declined. Many have responded by switching
to high-risk investments in search of the
inflated yields to which they became accus­tomed
in the late seventies and early
eighties. Some unionized workers who earned
double-digit wage increases several years
ago now are experiencing 2- and 3-percent
nominal wage increases, resulting in
stagnant or declining real wages.
Most families have benefited from disin­flation,
however. Those purchasing durable
goods, such as cars, saw falling prices
during 1985. Households with adjustable rate
mortgages have paid declining mortgage pay­ments.
Savers setting aside money for long­range
goals, such as education of children
and retirement, became more confident of
future purchasing power. Most importantly,
disinflation has restored rational incen-tives
to the economy, reducing speculative
buying and investing. This has led to better
market information for consumers, who, in
turn, can make purchase decisions based on
real needs rather than in anticipation of
price increases. At the same time, invest­ment
has moved toward long-term expansion
of productive capital rather than short-term
financial manipulation. This lays the
groundwork for future economic growth and
steady improvement in family economic
well-being.
Prices are poised for a modest upturn in
1986. Wage settlements negotiated in 1985
and anticipated for 1986 will put slight
6 family Economics Review 1986 No.2
upward pressure on prices. Similarly, import
restrictions currently debated could cost
consumers more for clothing, sugar, auto­mobiles,
and home electronics. The prices of
other basic consumer commodities, such as
food and energy--which have been stable or
declining in 1985--are unlikely to increase
significantly in 1986.
Interest rates, like prices, exert a strong
influence on consumer spending, particularly
for durable goods, such as appliances and
autos, and for housing. Although real
interest rates remained high, nominal rates
paid by consumers have declined steadily in
1985. For example, the average rate for
48-month new car loans offered by commercial
banks was 13.16 percent in May 1985,
compared with 13.71 percent in 1984.9
Promotional rates offered by manufacturers
and dealers in August and September further
reduced the average rate for new car loans
by 2 percentage points. Similarly, conven­tional
mortgage rates declined more than
1 percentage point during the year to about
11 percent. As a result, auto sales reached
a 9-year high in September and housing
starts and sales generally maintained an
upward path in 1985.10
The outlook for consumer interest rates in
1986 is clouded by continuing controversy
concerning the impact of funding the Federal
deficit on the demand for credit and uncer­tainty
concerning Federal Reserve Board
domestic monetary policy actions in light of
the strength of the U.S. dollar. As much as
50 percent of net savings in the economy may
be absorbed by Federal credit demands in
1986. This could place upward pressure on
all interest rates, including those charged
to consumers. At the same time, in efforts
9 Interest rate data are published in the
Federal Reserve Bulletin, Board of Governors
of the Federal Reserve System.
10 Housing starts dipped to a 1.6 million­unit
annual rate in September, down from
about 1.8 million earlier in the year. The
industry consensus is that this was an
aberration that will be corrected before the
end of the year.
to further reduce the value of the U.S.
dollar relative to foreign currencies, the
Federal Reserve Board may act to ease
monetary policy, thereby reducing interest
rates. The unknown probabilities of these
conditions and actions, combined with
uncertain estimates of their consequences,
have created wide and varied forecasts
for interest rates. Predictions range
from a 3-percentage-point increase to a
2-percentage-point decrease in mortgage
rates and a 2-percentage-point. increase to
a !-percentage-point decrease in installment
rates. Real interest rates should remain in
the same broad range in 1986 as in 1985,
however, because deficit funding activities
and Federal Reserve policies will have
similar effects on both nominal interest
rates and inflation.
What may differ in 1986, however, is
consumer demand for adjustable rate loans.
Adjustable rate instruments account for
almost half of all new mortgages and perhaps
20 percent of new installment loans (_!).
These instruments allow lenders to shift the
risk of fluctuating interest rates to
borrowers. When interest rates were high,
consumers flocked to adjustable rate loans
that offered initial rate discounts. As
rates stabilize, most consumers are likely
to prefer the security of fixed rate financ­ing
for their homes and durable goods.
Households spent at record levels in 1985.
Much of the demand for durable goods that
was deferred from the 1980-81 recession, as
well as new demand created by an increased
rate of household formation generated by the
baby boom, was met. Even with moderating
prices and interest rates, consumer spending
is expected to level off in 1986. Specifically,
demand for durable goods will decline during
the year, whereas spending on nondurable
goods should remain stable and spending on
services may increase. Over the longer term,
spending for services likely will claim an
increasing share of the household budget as
service prices show high relative increases
and as the U.S. population ages.
Net Worth
Consumer net worth, that is, assets minus
liabilities, equaled about 350 percent of
annual disposable income in 1985, up from
about 330 percent in 1984.11 The increase
occurred in spite of significant decreases
in the rate of saving and increases in con­sumer
debt. It is primarily the product of
rising stock values and growing pension
assets. The outlook for 1986 is for con­tinued
growth in net worth relative to
income. The portfolio of assets held by
individuals and families may change signifi­cantly,
however. The distribution of wealth
among households also may change.
Savings plummeted to 2. 8 percent of
disposable personal income in August, as
households increased personal expenditures
and credit use. The rate of saving averaged
only 4.4 percent through October 1985, down
from averages of 7 to 8 percent through the
midseventies and 6 percent in the late seven­ties
and early eighties. The outlook is for
the saving rate to recover slightly as incomes
rise and expenditures moderate in 1986.
The trend toward low rates of saving has
been explained by several factors. Demo­graphic
changes, including aging of the baby
boom generation to the prime spending· years
and increasing numbers of two-earner fam­ilies
(who presumably have less need for the
security of money in the bank), lead the
theories of declining saving. Also, saving
tends to move in a counter-cyclical pattern.
During periods of economic expansion, con­sumers
are optimistic and often respond by
increasing spending and debt. During down­turns,
consumers retrench, reducing spending
and debt and increasing their rate of
saving. November 1985 marked the beginning
of the fourth year of economic expansion.
The current low rate of saving is charac­teristic
of such a sustained expansion.
Finally, declining nominal rates of return
may be discouraging saving among those
accustomed to the inflated returns earned
several years ago.
11 Information on individual and household
assets, liabilities, saving, and debt
patterns are published in Flow of Funds and
Sector Accounts, Board of Governors of the
Federal Reserve System.
1986 No.2 Family Economics Review 7
In 1985 there was a shift in the composi­tion
of savings. with a larger share moving
into liquid accounts. stocks, and pensions
in 1985 than in 1984. This suggests that
savers have become very sensitive to changes
in interest rates and are taking advantage
of rising stock prices while holding other
assets liquid in anticipation of improving
rates of return. It also sets the stage for
continuing portfolio adjustment in 1986.
Consumer debt grew at a record rate in
1985 to about $520 billion, up 20 percent
from a year earlier. The ratio of consumer
credit to disposable personal income was
18.9 percent, near the record set in 1979.
Rapid growth in consumer credit has fueled
controversy concerning the debt burden of
families and the outlook for 1986. At issue
is the point at which consumers will slow
their credit buying. Those who see debt
levels falling sharply in 1986 argue that
consumers currently are overburdened and,
with only modest increases in income pro­jected
for 1986 and most demand for durables
met, neither able nor willing to add more
debt. Others argue that although debt levels
are high, actual repayment demands are low
due to longer term credit obligations; net
worth--particularly in the form of liquid
assets--is high; and optimism remains
strong. They predict only small decreases
in growth in consumer debt in 1986.
Measurement of consumer debt loads is
complicated because debt can include con­venience
use of credit cards as well as
long-term borrowing. Forty percent of the
households in the 1983 Survey of Consumer
Finances reported using bank credit cards;
half of those paid the debt in full each
month. This use of ·credit as a substitute
for cash or checks has raised the debt­income
ratio 1 percentage point since 1977
(_!_). Most families do not perceive this as
an increase in their debt burden, however.
Similarly. the ratio has been raised by a
change in the average maturity of auto loans
from 3 years in 197 4 to 4 years today; this
has increased the total credit costs of such
loans but has improved the cash flow of auto
borrowers. As more households use credit for
convenience purposes, actively manage cash
flow. and are exposed to new credit instru­ments
introduced as the result of financial
deregulation, consumer credit is likely to
8 fam i ly Economics Review 1986 No.2
expand during the late eighties. Whether
this expansion signals a problem for
families will depend on the purposes for
which they are using credit and their
ability to manage increasingly complex
financial instruments.
Financial Management Issues
Families will enter the late eighties with
the benefits of a sustained period of eco­nomic
growth behind them. They have used
this growth to increase net worth, acquire
durables, and adjust to noninflationary
spending and saving patterns. They have
demonstrated growing economic sophistication
and financial management skills during the
past several years. This will aid them in
meeting the goal of financial independence
in a world of growing economic
interdependence.
The economic environment affecting family
choices is expanding. World economic issues,
particularly currency exchange rates and
trade; national political policies. particu­larly
income tax reform; and interstate and
regional agreements. such as those in bank­ing
and industrial development, will affect
the income opportunities and marketplace
choices available to individuals and
families throughout the remainder of the
decade.
Tax reform is an important part of the
political and economic agenda for 1986.
Proposed reforms attempt to simplify the
Federal income tax system by reducing the
number of tax brackets and deductions and
streamlining the definition of taxable
income. This could generate lower marginal
tax rates coupled with higher taxable
incomes. Families may need to relearn the
basic principles of tax planning in 1986.
Family financial management will be
influenced in 1986 and beyond by several
legislative and regulatory actions signaling
a modest return to consumer protection
initiatives. For example, agencies regulat­ing
credit practices issued rules effective
January 1, 1986. that will prohibit certain
remedies used to enforce consumer credit
obligations.12 Prohibited remedies will
include confessions of judgment, wage
assignments, and pyramiding of late charges.
Also, co-signers will receive a notice
explaining co-signer obligations.
A more controversial form of consumer pro­tection
has been proposed by professional
organizations representing the financial
planning industry. They would like to see
official registration, certification, or
licensure of financial planning profes-sionals
to protect consumers from unscru­pulous
financial advisors. As the financial
planning industry grows, tension between
those who wish to limit entry into the pro­fession
and those advocating an open market
likely will work to move this issue to the
consumer agenda.
The most significant change in financial
services in 1986 is likely to be the
continued expansion of interstate banking.
Although official policy in this country
over the last 50 years has opposed inter­state
banking, efforts to circumvent this
policy have been numerous and growing.
Large banking organizations now conduct a
wide range of banking activities across
State lines. About 7,600 offices of out-of­State
banks provide services through
consumer finance companies, loan production
offices, and Edge Act Corporations. Other
banking services, such as credit cards and
automated teller machines, operate without
bank offices. "Nonbank banks," such as
retailers and financial corporations, provide
similar services across State lines.
Closely related to changes in the banking
system is the issue of regulatory reform of
deposit insurance. If financial institutions
become larger as the result of interstate
banking, the risks to insurance funds will
become more concentrated. Given this, and
the increasing--although still low--rate of
bank failures and the collapse of several
State-supported deposit insurance systems,
regulatory reform is likely to be proposed
soon. This could be a significant expansion
in consumer protection.
12Agencies included are the Federal Reserve
Board, Federal Home Loan Bank Board, and
the Federal Trade Commission.
LITERATURE CITED
1. Duncan, Greg J. 1984. Years of Poverty,
Years of Plenty. Institute for Social
Research, University of Michigan,
Ann Arbor, MI.
2. Goodman, John L., and Charles A.
Luckett. 1985. Adjustable rate financing
in mortgage and consumer credit. Federal
Reserve Bulletin 71(11):823-835. Board of
Governors of the Federal Reserve System.
3. Hefferan, Colien. 1984. Economic outlook
for families--1984. Family Economics
Review 1984(2): 12-19.
4. Pearce, Douglas K. 1985. Rising house­hold
debt in perspective. Economic
Review 70(7):3-17. Federal Reserve Bank
of Kansas City.
5. Samuelson, Robert J. 1985. Inflation's
stubborn hangover. Newsweek 106(9) :49.
6. U.S. Department of Commerce, Bureau of
the Census. 1985. After-tax money income
estimates of households: 1983. Current
Population Reports. Series P-23, No. 143.
7. U.S. House of Representatives, 99th
Congress, Select Committee on Children,
Youth and Families. 1985. Tax Policies:
How Do Families Fare, Report 49-871.
8. • A Family Tax Report Card,
Report 51-381.
Some New USDA Publications
The following are for sale from the Super­intendent
of Documents, U.S. Government
Printing Office, Washington, DC 20402,
202-783-3238.
•
Economic Structure and Change in
Persistently Low-Income Nonmetro
Counties. 1985. Stock No. 001-019-
00413-4. $2.25.
Food Consumption, Prices, and
Expenditures, 1964-84. 1985. Stock
No. 001-019-00423-1. $4.25.
The Diverse Social and Economic
Structure of Nonmetropolitan America.
1985. Stock No. 001-019-00389-8. $1.50.
1986 No.2 family Economics Review 9
Farm Families: Economic
Outlook for 19861
By Kathleen K. Scholl
Consumer economist
Some farm families had to make the
difficult decision to leave their farming
businesses in 1985. Unless the economic
factors that influence the agricultural
sector make positive movements in the near
future, additional farm families will be
faced with the same decision in 1986.
Although individual farmers and their
families cannot make a direct impact upon
the macroeconomic factors that influence
their situation, they can take actions to
provide some protection for the family from
further adverse economic conditions.
MACROECONOMIC INFLUENCES
Background and Situation 2
The current distress among farmers is
rooted in the inflationary decade and high
farm income of the seventies and adjustment
to sharply different economic conditions of
the eighties. Throughout the seventies,
farmers faced rapidly expanding exports,
accelerating inflation, and low to negative
real interest rates. High commodity prices
increased farm income, providing both the
incentive and financial means for farm ex­pansion.
As the value of farmland increased
with the prospects for future growth in farm
income, farmers used this additional wealth
as a base on which to borrow heavily to
invest in new capital equipment, adopt new
production technologies, and purchase in­creasingly
expensive farmland. Between 1970
and 1981 the value of farmland rose by
306 percent nationally (_!) and debt-to-asset
ratios of farms declined.
The early eighties brought an abrupt halt
to prosperity in the agricultural sector.
Commodity prices fell world wide; the value
of the dollar rose rapidly against major
1 This article is adapted from a paper
presented at the Agricultural Outlook Con­ference
in December 1985 in Washington, DC.
2 This section extensively utilizes infor­mation
contained in references 5 and 11.
10 family Economics Review 1986 No.2
currencies, further dampening export demand;
and inflation was slowed by stringent con­trol
of monetary growth. Real interest rates
jumped to unprecedented levels of 8 to 10
percent. Rising production costs coupled
with lower prices received by farmers
increased fluctuations in net farm income.
Revenue prospects were dimmed even further
by droughts in the early eighties. Not only
did land price escalation halt in 1981 as a
result of these developments, but prices
since then have declined substantially in
some of the most prominent farming areas.
Interest rates on real estate debt
skyrocketed, making the purchase of farmland
and refinancing more burdensome. Farmers'
debt levels, which were based on the value
of farmland in the seventies, no longer were
sustainable on the declining land values of
the eighties. Farmers whose solvency de­pended
on continuously rising land values or
who pursued an aggressive expansion strategy
were pushed toward financial failure.
Impact on Farm Families
Although farm families always have experi­enced
fluctuations in levels of income from
one year to another, the great variability
of net farm income since the late seventies
makes it difficult for farm families to make
financial management plans. As depicted in
the chart on p. 11, 3 real farm income
3Note that the data points in the chart
were calculated by dividing aggregate income
data by the number of farms. Averages,
however, present statistical aberrations.
The large number of rural residential small
farms distorts the off-farm income averages,
whereas large net farm incomes of a few
large farms distort net farm income aver­ages.
For example, large farms with agricul­tural
sales of $500,000 or more constitutes
1 percent of all farms, produce about
one-third of all U.S. farm production, and
earn about 4 percent of their total income
off the farm. Whereas, minifarms with agri­cultural
sales of $2,500 or less constitutes
about 25 percent of all farms, produce less
than 1 percent of all farm production, and
earn over 100 percent of their income off
the farm. (On the average, these farms have
a negative net farm income, and off-farm
income is used to balance the losses.)
experienced a steady increase through the
sixties, then varied from a per-farm high of
$9,144 in 1973 to a low of $2,121 in 1983.
The levels of living of farm families with
declining farm income deteriorated as the
prices of the goods and services they
purchased for consumption continued to
rise.
The majority of farm families use off-farm
employment as a means to provide a safety
net for their widely fluctuating farm in­come.
This is not a new economic reaction by
farm families; for 16 of the last 18 years,
off-farm income has exceeded net farm
income. Since the midseventies, real farm
income has declined on a per-farm basis,
whereas off-farm income has been fairly
stable (chart). When combined together into
total family income, however, fluctuations
as exhibited in net farm income still are
present. Many families experience negative
total family income, even after combining
net farm income with off-farm income (see
box on p. 12).
The majority of farm families have a farm
operator whose primary occupation is farming
(..!!_). This, together with the fact that the
larger share of total family income is from
off-farm earnings, suggests that families
are sending someone other than the main
operator into the labor market. They may
feel that the full-time farming status of
their operation is in jeopardy if the male
(95 percent of all farm operators (..!!_)) is
employed off the farm; therefore, other
Income of Farm Operator Families (In 1967 Dollars)
$thousand
16r---------------------------.-------------------------,
14
12
Total family
10
8
1985 forecast.
Sources: U.S. Department of Agriculture, Economic Research Service, 1984,
Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics,
1983, ECIFS 3-3, table 51. U.S. Department of Agriculture, Economic Research
S";;';ice, 1985, Agricultural Outlook, A0-113, p. 16. and unpublished data.
1986 No.2 Family Economics Review 11
family members are employed off the farm.
Farm women, especially, are continuing to
enter the labor market at a rapid pace.
Although the labor force participation rate
increased in the seventies for all women,
the rate of increase for farm women was
approximately 170 percent of that of their
nonfarm counterparts--42.4 percent, compared
to 25.0 percent (see Family Economics Review
1983(1): 10).
Data from a recent study (!) in a Missouri
corn belt county, of farmers who had left
their farms over the last few years,
suggests that many women work off the farm
regardless of the farm's financial situa-tion,
whereas men usually seek outside
employment at the downturn of the farm
operation. About nine-tenths of the families
NEGATIVE HOUSEHOLD INCOME
indicated they had intended for the farm to
provide most of the family's income; but
even when the farm operation was at its
largest, one-third of the men and one-half
of the women earned off-farm income. When
financial stress reached its maximum during
the last year of farming, 60 percent of the
men and 57 percent of the women held
off-farm employment. Ten percent felt they
could have kept their farm if they could
have gotten a nonfarm job, but 50 percent
apparently recognized the limitations of
this income-generating strategy, saying they
could not keep the farm even if they had a
nonfarm job. Apparently, a few of the farm
families under severe financial stress
viewed off-farm employment as a way to pre­serve
their chosen farm lifestyle, but more
Using the value of agricultural sales to define farm size, the proportion of farms
that had negative total household income1 in 1984 varied little by size of farm.
Interestingly, the smallest sales class was least likely to experience negative income.
Within the $40,000 to $99,999 sales class, which is sometimes considered to be
family-sized farms, 3 of 10 farm households had income of less than $10,000.
Farm size
All U.S. farms .•.•••.•....•
Sales of--
$9,999 and less •••••••••
$10,000-$39,999 •••••••••
$40,000-$99,999 •••••••••
$100,000-$499,999 •••••••
$500,000 and over •••••••
Total household income
Negative $0 to $9,999
income
Percent
15 18
12 25
18 19
18 11
17 6
17 1
$10,000
or m>re
67
63
63
71
77
82
1 The definition of total household income used here differs from the official USDA
total family income concept presented elsewhere in this article because the value of the
change in inventories is omitted.
Source: Ahearn, Mary, Jim Johnson, and Roger Strickland, 1985, The distribution of
income and wealth of farm operator households, (Talk presented at the American Agricul­tural
Economics Association Meetings, Ames, lA, August 5, 1985), U.S. Department of
Agriculture, Economic Research Service.
1Z f am ily Econom i cs Rev i ew 1986 No.2
(especially male operators) used it as a
means to exit farming and enter another
career.
·In the early eighties nearly one in four
people living on farms lived in poverty (~).
The high poverty rate has . been fairly stable
over the eighties. 4 The needs of farm people
are placing a heavy burden upon local and
State governments in depressed farming
areas. As revenues decline from lower taxes
received, local and State government agen­cies
are unable to provide cos~ly services
and economic support for farm families and
other families seeking assistance.
As local businesses experience a slowdown
from less spending by farm families, they
too must curtail their economic activity.
Often this results in fewer employment
opportunities or high unemployment in the
smal], farm community, which can be
devastating to the local farm family who is
dependent on off-farm employment.
Agricultural banks, which often are the
financial centers of the rural community,
are encountering problems as they try to
serve the growing financial needs of the
rural community. Banks are under severe
financial stress as some borrowers are not
paying interest on their loans and loan
losses at these banks have risen. In
addition, farm families who have a poor cash
flow are using personal and household
savings accounts for living expenses and for
retiring farm debt. The resulting decline in
rate of increase of savings accounts,
coupled with a decline in farmland values,
results in a downward economic spiral for
agricultural banks. In 1985, 68 agricultural
banks failed; these represent 58 percent of
all bank failures (_~).
Since commercial banks provide about
one-fourth of all outstanding farm credit,
they can provide information on the economic
well-being of farms. Agricultural members of
the American Bankers Association in the 1985
4 A trend over a longer period of time
cannot be tracked, since the separate pover­ty
threshold for persons living on farms was
eliminated in 1981. The elimination of the
differential increased the number of farm
families in poverty by about 20 percent.
Midyear Farm Credit Survey estimated that
3. 8 percent of all farmers filed for bank­ruptcy
(2). The rate has more than tripled
- 5 in the last 3 years (!).
ECONOMIC PROJECTIONS AND IMPACT ON
FARM FAMILIES
A general slowdown in the economy with a
stabilization of real family income is fore­cast
for 1986 (see "Economic Outlook for
Families--1986," by Colien Hefferan, p. 1
of this issue). A gradual decline in
economic well-being is projected for farm
families. The economic position of farm
families will be relatively worse than
predicted for families in the rest of the
economy. Farm families with predominantly
cash grains, general livestock, or dairy
operations will continue to experience
financial stress. The Corn Belt, the Lake
States, and the Northern Plains regions will
sustain the highest concentration of
families under severe financial stress.
Although 1984 was the best year of the
eighties for net farm income, great vari­ability
continues. Net farm income for 1985
is forecast to be near the level obtained in
1981 (see chart). Assuming no major policy
changes or weather disruption in the year
ahead, net farm income in 1986 is projected
to be near or slightly lower than the 1985
level. With a decline in net farm income,
the 1986 U.S. farm economy will continue to
be sluggish.
According to a recent USDA survey (_~) of
1. 7 million farms, 6 about 214,000 farms are ·
estimated to be experiencing financial
stress because of a combination of high debt
5 The number of farms filing for bankruptcy
could increase with passage of pending
legislation (HR 2211) that would raise for
family farms the debt ceiling of Chapter 13
of the bankruptcy code. Because debts are so
high, most family farms must file under the
tougher provisions of Chapter 11.
6 The survey's estimate of the total number
of U.S. farms is less than that counted by
the 1982 Census of Agriculture, primarily
because the census included 253,147 farms
with sales of less than $1, 000. Most of the
farms undercounted by the survey are in the
smallest sales classes.
1986 No.2 Family Economics Review 13
load (a debt-to-asset ratio of at least 40
percent) and an inability to generate enough
cash to meet production expenses, repay debt
installments on principal and interest, and
provide for family living expenses. An esti­mated
38,000 farms are technically insolvent,
with debts exceeding the value of their
assets.
An effect of this financial stress on farm
families will be an increased dependency on
off-farm employment, with the labor force
participation of farm women projected to
continue to rise. As indicated earlier, farm
families may need to travel beyond their
local communities as unemployment will con­tinue
to be extremely high in economically
depressed farming areas.
In an effort to stop the erosion of farm­land
prices and to prevent further slippage
of their assets, agricultural lenders are
temporarily retaining the farmland they
obtain through foreclosure. Therefore, farm
tenancy is anticipated to increase in the
short run as farmers who were owner opera­tors
rent farmland. Some farmers eventually
will reenter farming as owner operators as
the price of farmland stabilizes.
FARM FAMILY FINANCIAL MANAGEMENT
For the following discussion. families are
classified into four groups.
Group 1. The majority of farm families
(88 percent) are not experiencing severe
financial stress <!>. Nevertheless. they
will need to give increased attention to
family financial management in 1986. As the
value of farm assets continues to decline,
some of these farm families will begin to
experience severe financial stress. They
will need professional assistance to
preserve or to prevent deterioration of
their current financial position.
Families who conceptualized goals and
financial plans in the midseventies when in­come
peaked will need to develop new plans.
These high levels should not be anticipated
in a realistic financial plan for the rest
of this decade.
Guidance materials from the State Coopera­tive
Extension Service (for an example, see
Farm Family Living Expenses--Taking
Control <..!Q.>) can be used to analyze the
farm family's current financial management
14 Family Economics Review 1986 No.2
plan or develop new plans. These aids are
designed specifically for farm families and
can help them determine cash flow for family
living expenses. These guidance materials
identify discretionary budget categories
that can be cut when expenses exceed farm
family income.
The financial plan needs to incorporate
saving, insurance, and retirement. As
income from farming dwindled, many farm
families excluded those protections for the
family. Now they need inexpensive ways to
reduce their high personal risks. Some farm
families provide group health insurance for
family members through off-farm employment.
Other employment fringe benefits, such
as life insurance, also provide economic
security that the self-employed. farm­operator
family otherwise may be unable to
afford. Since farm operators are not
required to pay self-employment tax when net
farm income for the year is less than $400,
and since spouses of self-employed farm
operators are excluded from earning Social
Security credits for their contribution to
the farm business, a limited number of
farm-operator families presently qualify for
Social Security benefits as retired workers,
disabled workers, or survivors. Farm fami­lies,
however, can continue coverage on the
operator by paying self-employment tax on
gross income in bad years. Paying into the
Social Security system would provide minimal
protection for the farm family. Although
most farm families do not currently need or
seek income tax shelters, payment into an
IRA or Keogh account will allow them to
establish a savings plan for retirement.
Group 2. About 10 percent of all farm
families are having severe financial prob­lems.
Highly leveraged and with poor cash
flows, families in this group are concerned
about maintaining their desired farming
lifestyle.
Off-farm employment of the farm woman is
an economic strategy implemented by many
financially stressed farm families. More
than a replacement of the "egg and butter"
money of the previous farming era, off-farm
earnings have, in many instances, kept the
family on the farm. Of the farm women who
worked off the farm in 1980, one-fourth
stated that they worked because farm income
was inadequate to pay farm expenses. These
women, however, were not pleased with their
role as economic provider and were signifi­cantly
less satisfied with farming as a way
to make a living than women who worked off
the farm for other reasons.
Farm families who are dependent on
off-farm earnings must receive the maximum
return for their investment of time and
skills; a career guidance counselor may be
able to identify broad options for both
spouses. Since women on the average earn
less than men (they earn 65 cents, compared
to every dollar that men earn), the farm
couple may be able to obtain a better rate
of return if the husband works off the farm
while the wife runs the farm operation.
Limitations in the availability of off-farm
employment and other factors such as unmar­ketable
skills may prevent many financially
stressed families from entering the labor
market. Alternative approaches for increasing
family economic well-being include increased
household production for the family's own
consumption and the bartering of home­produced
goods and services with others in
the community.
The financially stressed farm family needs
to carefully scrutinize all purchases for
the home and farm. Many households may
find it difficult to control family living
expenses, which appear small compared to
the massive amounts spent on agricultural
supplies and equipment.
In an effort to maintain economic viabil­ity,
some farm families are making tradeoffs
with their independence. For example, some
farm families are encouraging nonfamily
investors into limited partnerships or the
addition of nonfamily stockholders into
family corporations. Fringe benefits, such
as farm vacations and hunting privileges,
may be offered to lure city partners.
Today's farm families need to be autono­mous
from the farm, especially if the farm
has a debt-to-asset ratio of 40 percent or
more. They no longer can use personal
savings and checking accounts to finance the
farm; doing so jeopardizes the family's
economic well-being. Using one financial
account for both the household and farm in
some situations may allow farm creditors
access to all of the family's finances.
Group 3. Two percent of all operating
farms are technically insolvent (2_).
Apprehensive about the family's economic
security, this group has the greatest need
for financial counselors, educators, social
workers, and county extension workers. Some
may have used household savings to pay farm
debts and lack funds to begin a new
lifestyle or a new career.
Farm families facing foreclosure of the
farm mortgage need to develop an economic
strategy to protect the family's finances
from farm creditors. These families may need
to turn to privately funded and government
programs and services for support until they
can relocate.
Group 4. A small group of families seek to
reenter farming or to enter farming for the
first time. These families need guidance on
beginning a farm lifestyle--typically as
tenant farmers, although some eventually
will be able to purchase land. This begin­ning
group will need specific counseling in
how to develop a healthy farm financial
environment for their families.
LITERATURE CITED
1. American Bankers Association. 1983.
1983 Mid-year Farm Credit Survey.
2. Herr, William McD. 1985. High debt­asset
ratios burdens 28% of borrowers.
ABA Bankers News Weekly 4(46) :7.
3. Melichar, Emanuel. 1986. Board of
Governors of the Federal Reserve
System, Division of Research and
Statistics. [Personal communication on
January 7, 1986.]
4. U.S. Department of Agriculture,
Economic Research Service. 1984.
Economic Indicators of the Farm Sector:
Income and Balance Sheet Statistics,
1983. ECIFS 3-3, table 51.
5. , Economic Research Service.
1985. The Current Financial Condition
of Farmers and Farm Lenders. Agricul­ture
Information Bulletin No. 490, p. vi.
6. , Economic Research Service.
1985. Financial Characteristics of
(References continued on p. 16.)
1986 No.2 Family Economics Rev i ew 15
U.s. Farms, January 1985. Agriculture
Information Bulletin No. 495.
7. , Economic Research Service.
1985. Farmers who leave their farms.
Newsletter. Agriculture and Rural
Economics Division. July issue.
8. U.s. Department of Commerce, Bureau
of the Census. 1984. United States
summary and state data. 1982 Census
of Agriculture. Vol. !--Geographic
Area Series. Part 51, tables 5 and 49.
9. , Bureau of the Census. 1985.
Characteristics of the population below
the poverty level: 1983. Current
Population Reports. Consumer Income,
Series P-60, No. 147, table 8.
10. Weagley, Robert 0., and Cynthia E.
Crawford. 1985. Farm Family Living
Expenses--Taking Control. Home
Economics Guide GH 3925. University of
Missouri-Columbia, Extension Division,
College of Home Economics, Columbia,
MO.
11. Wilson, Gene, and Gene Sullivan. 1985.
Farmland price behavior: A study in
diversity. Economic Review 60 ( 4): 20-24.
Federal Reserve Bank of Atlanta.
Award and Receipt of Child
Support and Alimony
The third in a series of surveys to obtain
data on child support and alimony was con­ducted
by the U.s. Bureau of the Census in
1984 and sponsored, in part, by the Office
of Child Support Enforcement, U.s. Depart­ment
of Health and Human Services. Similar
studies were conducted in 1979 and 1982, and
the results were presented in Current
Population Reports, Special Studies, Series
P-23, Nos. 112 and 140.1
As of spring 1984, 8. 7 million mothers
were living with children under age 21 whose
fathers were not living with them. Of these
women, 58 percent were awarded or had an
1 See "Child support and alimony: 1978,"
Family Economics Review, fall 1981,
pp. 15-16, and "Child support and alimony,"
Family Economics Review 1985(4): 24.
16 fam i ly Economics Review 1986 No.2
agreement to receive child support payments,
and 46 percent had been due payments in
1983. Of those due payments, one-half
received the full amount due, one-quarter
received partial payments, and the remaining
one-quarter received no payments. Although
the child support award rate of 58 percent
reported in 1984 did not change signifi­cantly
from the rates reported in the two
previous surveys, the proportion of women
receiving payments increased from 72 percent
in both 1979 and 1982 to 76 percent in the
1984 survey.
The mean amount of child support for
women who received payments in 1983 was
$2,341, compared with $1,799 received in
1978. After adjusting for inflation during
the period from 1978, the average child
support payment showed a 15-percent
decrease from the 1978 figure. However,
child support payments as a percentage of
the average income of men remained at about
13 percent during this period.
As in the previous two surveys, the women
most likely to be awarded and to receive
child support payments were white women and
women with 4 or more years of college. Women
with voluntary written agreements received
88 percent of the amount they were due,
whereas women with court-ordered payments
received only 58 percent of the amount due.
Of the 17 .1 million ever-divorced or
currently separated women as of spring 1984,
14 percent were awarded alimony payments.
The alimony award rate did not change
significantly from that reported in the two
previous surveys. The mean amount of alimony
received by women in 1983 was $3,980, which
represents 22 percent of the average income
of men.
Of the 14.5 million ever-divorced women as
of spring 1984, 37 percent were awarded a
property settlement, compared with 42
percent in 1982 and 44 percent in 1978,
which appears to establish a downward trend.
Women with property settlements had a higher
average total income ($12,920) than women
without property settlements ($10,370).
Source: U.S. Department of Commerce,
Bureau of the Census, 1985, Child support
and alimony: 1983, Current Population
Reports, Special Studies, Series P-23,
No. 141.
Recent n-ends in Clothing
and 1extiles1
By Joan C. Courtless
Family economist
Clothing Expenditures and Prices
In 1985 apparel and upkeep prices, as
measured by the Consumer Price Index ( CPI) ,2
rose 4.4 percent over 1984 (table 1). This
is the first time since 1969 that clothing
prices have increased at a higher rate than
prices for the "all items" category. Women's
suits and women's separates and sportswear
led the increase in clothing prices; only
prices of boys' and girls' footwear, and
men's coats and jackets declined during the
year.
Annual spending for clothing and shoes in
1985 is estimated at $617 per person accord­ing
to preliminary figures for the first
three quarters of 1985 (table 2). This
amount exceeds 1984 spending by $25 per
person; 76 percent of the increase can be
attributed to higher prices and 24 percent
to increased buying.
When the effect of inflation is removed,
the percentage of personal consumption
expenditures for clothing and shoes shows
gradual increases since 1970 (indicated by
constant dollars in table 2). The rise in
per capita expenditures for clothing (in
constant dollars) further supports the
premise that consumers have increased their
clothing purchases over the years.
In current dollars, however, clothing is a
shrinking percentage of personal consumption
expenditures. This can be attributed, in
part, to the many years when clothing prices
increased at a lower rate than prices for
other items. Data from the U.s. Bureau of
Labor Statistics' Consumer Expenditure
Survey (CES) provide further evidence of
1 This article was adapted from a paper
distributed at the Annual Agricultural
Outlook Conference in December 1985 in
Washington, DC.
2 Consumer Price Index for Urban Wage
Earners and Clerical Workers.
this trend. Consumer units spent an average
of 5. 5 percent of their total expenditures
on apparel and related services (current
dollars) (Q). This share was unchanged in
1982-83 from 1980-81. A previous CES
conducted in 1972-73 found that 7. 7 percent
of total expenditures were allotted to
apparel and related services <.!~).
Trade in Textiles, Apparel, and Footwear
The increasing trade deficit in textiles
and apparel was the dominant clothing and
textiles issue in 1985. In 1984 this deficit
reached $11.9 billion, the largest in
history and 44 percent higher than in 1983.
The textile and apparel trade deficit for
1985 probably will exceed this amount; for
the first 9 months of 1985 it was 6 percent
higher than during the same period in 1984.
Volume of textile and apparel imports (in
square yards equivalent) was up only
0. 5 percent for the first 9 months of 1985
compared with the same period in 1984.
Corresponding changes in volume by fiber
were cotton, 6 percent lower; wool,
4 percent higher; and manmade, 2 percent
higher. The trade deficit for textiles for
the January-September 1985 period was down
2 percent from the same period in 1984;
volume of textile imports was down 10
percent. The trade deficit for apparel was
8 percent higher for the first 9 months of
1985 than during the same period in 1984; in
square yards equivalent, apparel imports
were up 4 percent.
Quotas established under multilateral or
bilateral agreements limit the number of
apparel items that most foreign countries
can export to the United States. Therefore,
producers in exporting countries realize
maximum profits by upgrading the value of
the garments shipped to this country. Higher
priced imported apparel helps to explain why
the trade deficit increased at a higher rate
than volume during the first 9 months of
1985. The CPI for clothing items is also
affected by this higher priced imported
merchandise because imports are such a large
1986 No.2 Family Economics Review 17
Table 1. Percent change in prices of apparel and upkeep, December 1984 to
September 1985 1
Group and item
All items ••••..........•....•.•....•.....•..•.••.•..••..•...
Apparel and upkeep •......•...............•..•.•••.•..••.
Men's and boys' clothing ••••••••••••••••••••••••••••••••
Men's ••••••••••••••••••••••• • • • • • • • • • • • • • • • • • • • • • • • • •
Suits, sport coats, and jackets •••••••••••••••••••••
Coats and jackets ••••••••••••••••••••••••••••••••••
Furnishings and special clothing ••••••••••••••••••••
Shirts .........•.•.•..•......••••..••••.•••.........
Dungarees, jeans, and trousers •••••••••••••••••••••
Boys' •..•...............•....••... · ...... • •.• • • • • • • • •
Coats, jackets, sweaters, and shirts ••••••••••••••••
Furnishings ....••............•.....•...•.•••••••••.
Suits, trousers, sport coats, and jackets •••••••••••
Women's and girls' clothing •••••••••••••••••••••••••••••
Women's ..............................................
Coats and jackets ••••••••••••••••••••••••••••••••••
Dresses ......................................•.....
Separates and sportswear •••••••••••••••••••••••••••
Underwear, nightwear, and hosiery •••••••••••••••••
Suits . ............................................. .
Girls' ........................•..............•........
Coats, jackets, dresses, and suits •••••••••••••••••
Separates and sportswear •••••••••••••••••••••••••••
Underwear, nightwear, hosiery, and accessories ••••
Infants' and toddlers' clothing •••••••••••••••••••••••••
Other apparel commodities ••••••••••••••••••••••••••••••
Sewing materials and notions •••••••••••••••••••••••••
Jewelry and luggage ....•...... .......................
Footwear •........................•...•......••••••.•..•
Men's
Boys' and girls' ..................................... .
Women's ••••••••••••••••••••••••••••••••••••••••••••••
Percent change
(annualized)
+3.6
+4.4
+3.4
+3.3
+3.9
-2.2
+5.5
+7.1
+0.3
+4.0
+8.3
+1.4
+1.9
+7.7
+8.5
+7.8
+6.0
+13.6
+2.0
+24.0
+4.1
+6.6
+2.5
+3.1
+5.3
+1.0
+1.9
+0.7
-0.4
+1.9
-3.8
+0.1
1Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Source: Calculated from the CPI Detailed Report, December 1984 and September 1985,
U.S. Department of Labor, Bureau of Labor Statistics.
18 Family Economics Review 1986 No.2
Table 2. Annual expenditures on clothing and shoes 1
Percent of Aggregate
Per capita personal expenditures
expenditures2 cons\IIl>tion
Year expenditures Bill ions Bill ions
of of
Constant Ulrrent Constant Ulrrent constant current
dollars dollars dollars dollars dollars dollars
(1972) (1972) (1972)
1960 ............. $203 $148 8.1 8.2 $36.6 $26.7
1961 ............. 203 149 8.1 8.2 37.3 27.4
1962 ............. 209 154 8.1 8.1 38.9 28.7
1963 ............. 209 156 7.9 7.9 39.6 29.5
1964 ............. 222 166 8.1 8.0 42.6 31.9
1965 ............. 227 172 7.9 7.8 44.2 33.5
1966 ............. 239 186 8.0 7.9 46.9 36.6
1967 ............. 236 192 7.8 7.8 46.9 38.2
1968 ............. 242 208 7.7 7.8 48.6 41.8
1969 ............. 245 223 7.6 7.8 49.6 45.1
1970 ............. 240 227 7.4 7.5 49.2 46.6
1971 ............. 249 244 7.5 7.6 51.6 50.5
1972 ............. 264 264 7.5 7.5 55.1 55.1
1973 ............. 281 291 7.7 7.6 59.2 61.3
1974 ............. 279 308 7.8 7.3 59.1 65.3
1975 ............. 288 328 7.9 7.2 61.4 70.1
1976 ............. 293 345 7.7 6.9 63.8 75.3
1977 ............. 306 375 7.8 6.9 67.5 82.6
1978 ............. 331 415 8.1 6.9 73.6 92.4
1979 ............. 341 440 8.3 6.6 76.7 99.1
1980 ............. 342 459 8.4 6.3 77.9 104.6
1981 ............. 359 497 8.7 6.2 82.6 114.3
1982 ............. 362 511 8.7 6.0 84.2 118.8
1983 ............. 377 541 8.8 5.9 88.5 127.0
1984 ............. 408 592 9.1 6.0 96.5 140.2
19853 ............ 414 617 9.0 5.9 98.9 147.3
1 Includes yard goods, but excludes services such as cleaning and repairing clothing and
shoes.
2 Calculated by dividing aggregate expenditures for each year by population figures for July
of each year.
3 Preliminary figures--average of estimates for first 3 quarters of 1985 (i.e., seasonally
adjusted quarterly totals at annual rates).
Sources: Calculated from U.S. Department of Commerce, Bureau of the Census, 1985,
Population estimates and projections, Current Population Reports, Series P-25, No. 974; and
U.s. Department of Commerce, Bureau of Economic Analysis, 1985, Survey of Current
Business 65(7):11 (tables 2.2 and 2.3), and personal communication.
1986 No.2 family Econom i cs Rev i ew 19
share of the U.S. retail apparel market--42
percent of all apparel, excluding underwear
and accessories, was imported in 1984 <i>·
The domestic textile and apparel indus­tries
are finding it difficult to compete
with foreign producers who have access to
low-cost labor, Government subsidies, and
Government protection from imports. This
situation has been exacerbated by fraudulent
practices to evade quota restrictions (such
as false labeling and smuggling), and by the
comparative strength of the U.S. dollar
against foreign currencies. Some U.S.
apparel manufacturers have established over­seas
operations where garments are assembled
and sewn together from components originat­ing
in the United States. Because labor
costs are lower in developing countries,
such products then can be sold at lower
(more competitive) prices than if they were
made entirely in the United States. Others
connected with the U.S. textile and apparel
manufacturing industries have lobbied mem­bers
of Congress to enact legislation that
would offer them protection from further
massive increases in import penetration.
Those in opposition to this legislation are
equally vocal and include retailers and
importers (who believe higher prices for the
American consumer would result), and
members of leading export industries (who
believe they would suffer retaliation from
foreign markets).
The import issue has been of critical con­cern
to the shoe industry. The International
Trade Commission determined that imports of
nonrubber footwear are causing substantial
injury to a domestic industry in the United
States and recommended an increase in duty
or import restriction necessary to alleviate
the injury. On August 28, 1985, President
Reagan made the decision (_~) that granting
import relief would not be in the national
economic interest for three reasons:
1. Import relief would place a costly bur­den
on the U.S. economy and consumers. Jobs
in the shoe industry have an average annual
wage of $14, 000, but each job created or
saved by restricting imports would cost the
Nation's consumers $26,300 through higher
priced shoes.
20 family Economics Review 1986 No.2
2. Import relief would result in serious
damage to U.S. trade through retaliatory ac­tions
by foreign suppliers and by adversely
affecting the ability of these foreign
suppliers to import goods from the
United States.
3. The shoe industry is successfully
adjusting to increased import competition by
consolidating to become more efficient,
investing in the most advanced equipment,
diversifying into profitable retail opera­tions,
and using imports to supplement
product lines.
The U.S. Department of Labor announced
an initial commitment of $5 million for a
program that will retrain shoe workers who
become unemployed because of foreign
imports. Governors of shoe producing States
were asked to participate in establishing
retraining programs under the Job Training
Partnership Act.
Supplies, Prices, and Consumption of
Fibers
World production of fibers was 11 percent
higher in 1984 than in 1983. Natural fiber
production rose by 14 percent, increasing
from 53 percent of all fibers in 1983 to 55
percent in 1984 (!Q_).
The 1985 U.S. mill consumption of total
fibers is estimated at 46.3 pounds per
capita. This includes 11.5 pounds of cotton,
0.5 pound of wool, and 34.3 pounds of
manmade fibers. Per capita use in 1984 was
45.7 pounds, including 11.5 pounds of
cotton, 0.6 pound of wool, and 33.6 pounds
of manmade fibers. Since 1960, 1984 was the
only year in which domestic consumption
increased as mill consumption decreased (see
chart). This is reflected in the growing
textile trade deficit.
Cotton. The 1985 domestic cotton crop is
expected to be about 13.8 million bales, up
6 percent from 1984. Cotton prices are
expected to drop in 1986 because the 1985
surplus (forecast at 4.6 million bales)
added to 1984's ending stocks would yield
nearly 9 million bales in carry-over.
Cotton's share of U.S. mill use was less
than 25 percent in 1984. Textile imports,
almost 50 percent cotton, raised cotton's
share of U.S. fiber consumption to 30
percent (table 3). In 1984 over 37 percent
of total U.S. domestic cotton consumption
was in the form of imported textiles. Hong
Kong and China were the largest suppliers of
U.s. imported cotton textiles, 19 and 14
percent, respectively. About 25 percent of
the cotton in textile imports was grown in
the United States. Korea and Japan were the
two largest markets for U.S. · raw cotton
exports, purchasing 44 percent of total 1984
cotton exports. Consequently, almost
79 percent of cotton textiles imported from
Korea were manufactured with U.S. cotton.
Other countries that used a high percentage
of u.s. cotton in their mills include Taiwan
(40 percent) and Hong Kong (33 percent).
Net U.S. Trade in Textile Products
Lbs. per capita
55
Domestic consumption *---1.·:-':
50
45
40
Wool. U.S. wool production for 1985 is
estimated at more than 8 percent below the
1984 yield. Mill consumption of apparel wool
is expected to be 17 percent below the 1984
level. Increased imports of wool textiles
and apparel contributed to this decrease in
mill demand.
Between 60 and 70 percent of the raw wool
used in U.S. mills is imported. After
increasing by 27 percent in 1983 and 21
percent in 1984, raw wool imports are ex­pected
to drop by about 10 percent in 1985.
U.S. farm prices for wool in 1985 should
reflect lower mill demand, and average about
10 cents per pound less than in 1984. Prices
paid to American farmers are influenced by
those paid for foreign wool, however. A
weakened dollar would cause prices of
imported wool to rise, and domestic prices
would also rise above this estimate.
35 ~~~-L~~~~~~~-J--~~~~~-J--~~~-L~~~~
1960 65 70 75 80 84
* O:Jmestic consumption includes mill consumption plus the raw fiber equivalent of net U.S. trade in textile products.
1986 No.2 Family Economics Review 21
Manmade fibers. Shipments of manmade
fibers by U.S. producers during the first
8 months of 1985 were 1 percent above
shipments a year earlier <.!.!> and only
2 percent above the 1983 level (.!!_). In 1984
almost 7 5 percent of all fibers used by U.S.
mills were manmade; 57 percent of all fibers
used for apparel were manmade (.!.!).
Developments in Fibers and Fabrics
Fabrics made entirely of wool, cotton,
linen, and silk continue to constitute a
substantial portion of the textile market
for clothing. Fiber blends, however, are
becoming more prevalent in both foreign and
domestic garment production. Because the
Multi-Fiber Agreements (MFA) specify
numbers of garments made of cotton, wool, or
manmade fibers that may be imported, foreign
Table 3. Annual domestic consumption 1 of ff.bers
Total fibers
Year (pounds Cotton Wool Marmlde
per capita)
- - - - - Percent - - - - -
1960 ................ 36.6 64.4 8.2 27.5
1961 ................ 35.9 61.7 8.1 30.2
1962 ................ 38.8 59.6 7.9 32.5
1963 ................ 39.4 56.1 7.5 36.4
1964 ................ 41.5 54.9 6.2 39.0
1965 ................ 45.3 53.5 6.0 40.5
1966 ................ 48.2 52.7 5.3 41.9
1967 ................ 47.3 50.2 4.5 45.2
1968 ................ 51.4 43.4 4.5 52.1
1969 ................ 50.9 40.9 4.2 54.9
1970 ................ 47.0 42.8 3.6 53.6
1971 ................ 51.5 39.7 2.5 57.8
1972 ................ 54.8 36.3 2.4 61.2
1973 ................ •56.2 32.7 1.7 65.5
1974 ................ 48.1 33.2 1.4 65.4
1975 ................ 46.3 31.7 1.6 66.7
1976 ................ 53.0 32.1 1.8 66.1
1977 ................ 54.9 28.7 1.8 69.5
1978 ................ 56.0 28.3 1.9 69.8
1979 ................ 54.1 27.4 1.8 70.8
1980 ................ 49.9 29.2 1.9 68.9
1981 ................ 49.6 29.0 2.1 68.9
1982 ................ 45.2 29.9 2.1 68.0
1983 ................ 54.5 29.1 2.2 68.7
1984 ................ 55.4 30.1 2.6 67.3
1Domestic consumption includes mill consumption plus the raw fiber equivalent of net U.s.
trade in textile products.
Source: U.s. Department of Agriculture, Economic Research Service, 1985, Cotton and Wool
Outlook and Situation Report CWS-43, p. 17.
22 Family Economics Review 1986 No.2
producers are succeeding in circumventing
these quotas by using blends with ramie,
linen, or silk. 3
American designers are influenced by the
infinite aesthetic effects that can be
achieved by blending two or more fibers.
Fiber blends being promoted for 1986 will
emphasize a shiny, lustrous appearance and
bright, vibrant colors that are possible by
combining rayon, acetate, and/or acrylics
with cotton or wool. Improved fiber perfor­mance,
lower costs, and consumer demand also
are cited by domestic fiber producers as
reasons for using fiber blends.
Garments of 100-percent cotton yarn are
accepted by American consumers for
year-round use. Cotton clothing is available
in all price ranges and in most garment
types including coats, jackets, sweaters,
shirts, dresses, skirts, and underwear.
Cotton end-use in women's sweaters has
nearly tripled in the last decade.
Because low-cost imports of high-volume
yard goods are forcing many textile mills to
lay off workers or close,'+ some textile
companies are diversifying by developing
special-use, high-priced fabrics that are
aimed at small segments of the population.
To compete with expensive Gore-Tex (a teflon
membrane laminated to a breathable synthetic
fabric that is waterproof), several firms
are producing water-repellent, breathable
synthetic sports fabrics to be used in
running suits and other actionwear. For
example, Versatech is water-resistant and
made of tightly woven superfine polyester
yarn with no chemical coating and no need
for lining. Apparel makers may choose
Versatech for its price advantage and its
suitability for mild climates. Another exam­ple
is Bion II, a polyurethane coating that
3 Non-MF A apparel imports increased by 171
percent in 1984, compared with a rise of 21
percent in MFA-covered apparel imports;
non-MF A sweater imports increased by 280
percent, compared with an 8-percent increase
in MFA sweater imports during the same year
<!>·
'+During the first 6 months of 1985, more
than 40 domestic textile mills closed and
over 7, 000 workers became unemployed (1_) •
is sprayed on a fabric to produce a breath­able,
waterproof material. In 1985-86, a
one-piece ski suit of Bion II will be avail­able;
future applications include tents,
hiking jackets, raincoats, and disposable
surgical gowns and sanitary products.
A new permanent flame-resistant pile
fabric, blended of 65 percent rayon and
35 percent wool, has been patented <.i) and
will be known as "Glentec." It is designed
as an inner fabric for lining garments used
in fire-hazardous jobs, such as in the mili­tary.
A proposed application is in airline
seat upholstery. Other performance charac­teristics
include warmth without weight,
durability, washability, pile recovery
capability, shrink resistance, and easy
dyeability. The fabric has been approved by
the U.S. Surgeon General and is nontoxic.
A fine-denier nylon yarn called "Supplex"
became available in 1985 (1). It is
considered to be softer, with a more natural
hand, and lighter in weight than conven­tional
nylon, and is appropriate for all
broadwoven nylon end uses such as light­weight
jacket shells, ski wear, and active
wear.
For 6 years Lycra spandex in 20-denier
count has been used in the manufacture of
sheer hosiery to provide stretch, fit,
comfort, a "silky" hand, run-resistance, and
good dyeing properties. A 10-denier Lycra
has become available <.!>, and at least 5
major hosiery mills are using it to produce
ultrasheer pantyhose. Promotional materials
emphasize the "silky" hand, sheerness, and
fit in an effort to overcome any stigma
associated with the fiber's use in support
hosiery.
The Wool Bureau, Inc., is participating in
an international program to increase demand
for wool knitted jersey by establishing it
as a standard fabric option available to
designers of apparel (_~). In a three-part
marketing effort directed towards knitters,
apparel manufacturers, and retail buyers,
the Wool Bureau will seek to ensure that
knits are considered an alternative to
1986 No.2 Family Economics Review 2'
wovens from season to season and year to
year. In 1985 the Wool Bureau's technicians
worked with knitters to develop new fabrica­tions
that can be engineered to adapt to
fashion requirements for silhouettes,
patterns, and seasonal weights. In 1986 the
Wool Bureau will help the knitters promote
jersey fabrics to manufacturers and store
buyers.
Trends in Retailing
Over the last decade department stores
have lost retail sales to specialty shops
and off-price stores. The major advantages
once held by department stores--one-stop
shopping and credit--have been nullified by
the enclosed shopping mall and the avail­ability
of bank credit cards. In order to
become more competitive and to update their
image, some department stores are eliminat­ing
their least profitable merchandise clas­sifications.
Examples of departments being
discontinued include fabrics, as well as
major appliances, books, budget "stores,"
and toys.
A major retail catalog establishment for
over 100 years, Montgomery Ward & Co.,
has announced the closing of its catalog
operations, which had sustained losses since
1979. Other retailers are establishing
highly profitable direct-mail divisions. A
recent innovation is the selling of adver­tising
pages in up-scale catalogs; national
advertisers are enthusiastic about the
well-targeted audience which can be reached
through this print medium, and the retailer
can anticipate large profits.
Private labels are appearing on top qual­ity
merchandise in a concerted effort to win
customers away from name brands. Because
name brands can be purchased in most stores
including "off-price" outlets, they are sub­ject
to intense price cutting. Many of the
largest retailers hope to achieve higher
profits by stocking well-made, fashionable
garments bearing their exclusive label that
they alone can sell.
24 family Economics Review 1986 No.2
Federal Legislation and Regulations
Related to Textiles and Apparel
Amendment to rules and regulations under
the Wool Products Labeling Act of 1939 and
Textile Fiber Products Identification Act
(1958). Public law 98-417, effective
December 24, 1984, amended the Wool Act to
require imported products to be labeled with
the country of origin. Both the Textile Act
and Wool Act were amended to require domes­tically
manufactured products to be labeled
as "Made in the USA" (_~). The objective of
the legislation was to clarify and improve
country of origin labeling requirements for
textiles and to increase consumer awareness
at the time of purchase. Both acts were
further amended to require:
1. The country of origin disclosure to be
placed in the neck of the garment or, for
garments without necks, on a conspicuous
place on the inside or outside of the
product.
2. All products to be separately labeled.
(Hosiery packaged for direct sale to the
consumer, however, may have all required
information on a label affixed to that
package.)
3. All packages (in addition to the
products) to be labeled, unless the package
is transparent and the individual product
label can be seen through the package.
4. Mail order catalogs and mail order
promotional materials to disclose in the
description of each textile and wool product
whether the product is made in the USA,
imported, or both.
The Federal Trade Commission (FTC)
further amended the rules and regulations,
effective May 17, 1985, so that final regu­lations
for the disclosure of the country of
origin of imported textile and wool products
(including those under the "807" program for
textile or wool products assembled and sewn
together in a foreign country of components
from the United States) would be consistent
with U.S. Customs Service regulations. 5
5 For further information, see "Recent
trends in clothing and textiles," by Joan C.
Courtless, Family Economics Review
85(2):6-7.
Requirements for the three different cate­gories
of domestic origin disclosure were
defined as follows:
1. For products made entirely in the
United States, the regulation provides that
the words "Made in USA," or the equivalent,
must be used.
2. For products made in the United States
using foreign materials, the words "Made in
the USA of imported fabric," or similar
terms, must be used.
3. For products partially manufactured in
the United States and partialfy manufactured
in a foreign country, the regulation
requires a disclosure that the product was,
for example, "Sewn in USA of imported
components."
The FTC requires a manufacturer to go
back one step to determine origin--a manufac­turer
of yarn would look to the source of
its fiber and a manufacturer of cloth would
designate the source of its yarn. For
products having both domestic and imported
components or manufacturing operations, the
foreign aspects may be described in general
terms, such as "imported," rather than by
specifying the foreign country involved.
The FTC added provisos permitting place­ment
of the disclosure label in proximity to
another label already affixed to the inside
center of the neck, provided it is conspicu­ous
to the consumer. Alternately, required
information (origin, fiber content, and
manufacturer's name) may be placed on a
hang tag or label attached in a conspicuous
place on the inside or outside of the
garment, provided a label with country of
origin is affixed to the inside neck in the
center or just adjacent to the center label.
Thus, a standard location for the country
of origin is preserved, crowding of infor­mation
in the neck area is alleviated, and
the pre-existing requirement that all
required information appear on the label
together is retained.
Regulations concerning mail order catalogs
and mail order promotional materials were
amended to make clear that they apply only
to advertising that solicits the retail
buyer to purchase a product by telephone or
mail without first examining that product.
Regular advertising that attracts the retail
buyer to the store to purchase the product
is not covered.
The FTC suggests that mail order catalogs
include a legend explaining the meaning of
their country of origin disclosures. Also,
mail order catalogs should use the phrase
"Made in USA and Imported" to indicate
partial manufacture in USA and partial manu­facture
in a foreign country, whereas "Made
in USA or Imported" should be used when a
product's source may be both domestic and
foreign.
Employment of home workers in certain
industries. The ban on employment of home
workers in the knitted outerwear industry,
which lasted nearly 40 years, has been
rescinded (_!i). In the judgment of the U.S.
Department of Labor, such a ban unfairly
deprives persons of the right to work at
home if they so choose.
In order to prevent the circumvention or
evasion of the minimum wage provisions of
the Fair Labor Standards Act, employers of
industrial home workers in the knitted
outerwear industry are required to obtain
certificates from the U.S. Department of
Labor authorizing such employment; this
requirement was effective December 5, 1984.
Employers without a certificate will be
prohibited from employing home workers.
Violations of the Fair Labor Standards Act
can result in the denial or revocation of
existing certificates for a period up to
1 year. The employer may be required to
restore back wages found due employees.
Goods produced in violation of the act are
prohibited from commercial interstate
shipment.
SELECTED REFERENCES
1. Cressy, Terrence. 1985. E.I. du Pont
de Nemours & Co. Inc. [Personal
communication on October 2, 1985.1
2. Federal Trade Commission. 1985.
Amendment to rules and regulations
under the Wool Products Labeling Act
of 1939 and Textile Fiber Products
Identification Act. Federal Register
50(74):15100-15107.
(References continued on p. 26.)
1966 No.2 family Economics Review 2S
3. Halpern, Mitchell N. 1985. Massive
surge in garments in blends to avoid
MFA coverage. Knitting Times 54(6): 14.
4. Knitting Times. 1985. Vol. 54, No. 6,
p. 76.
5. • 1985. Vol. 54, No. 8,
p. 64.
6. Priestland, Carl. 1985. American
Apparel Manufacturers Association.
[Personal communication on October 17,
1985.]
7. Raiman, Gale. 1985. American Textiles
Manufacturers Institute. [Personal
communication on October 3, 1985.1
8. Reagan, Ronald. 1985. Weekly Compila­tion
of Presidential Documents.
Vol. 21, No. 35.
9. Textile Organon. 1984. Vol. 55, No. 8,
p. 176.
10. • 1985. Vol. 56, No. 7-8,
p. 151.
11. • 1985. Vol. 56, No. 9,
PP• 180 and 203.
12. U.S. Department of Agriculture,
Economic Research Service. 1985. Cotton
and Wool Outlook and Situation Report
CWS-42.
13. • 1985. Cotton and Wool
Outlook and Situation Yearbook CWS 43,
and personal communication with John
Lawler.
14. U.S. Department of Commerce, Interna­tional
Trade Administration. 1984 and
1985. Textile and Apparel Import
Report.
15. U.S. Department of Labor, Employment
Standards Administration. 1984.
Employment of homeworkers in certain
industries; final rule. Federal Register
49(215):44262-44271.
16. , Bureau of Labor
Statistics. 1985. Consumer Expenditure
Survey: Interview Survey, 1980-81.
Bulletin 2225.
17. • 1985. Consumer
Expenditure Survey Results from
1982-83. News. USDL No. 85-402.
26 family Economics Review 1986 No.2
Food and Nutrient Intakes
by Women and Children,
Spring 1985
The first report from USDA's Continuing
Survey of Food Intakes by Individuals
(CSFII) presents 1-day food and nutrient
intake data for 1, 503 women 19 to 50 years
of age and their 548 children 1 to 5 years
of age.1 One-day dietary intakes on these
individuals are being collected six times
during a 1-year period that began in spring
1985. A future report is planned that will
present the data for all 6 days. The CSFII,
conducted by the Human Nutrition Informa­tion
Service of the U.S. Department of
Agriculture, is the first nationwide dietary
intake survey to be performed on a regular
basis in this country.2 The survey comple­ments
the larger nationwide food consumption
surveys conducted by USDA approximately
every 10 years. The yearly data collection
will provide up-to-date information on the
adequacy of diets of selected population
groups and early indications of dietary
changes.
In the spring of 1985, the women reported
dietary intakes for themselves and their
children that were generally higher in food
energy and as high or higher in all vitamins
and minerals studied than the intakes
reported by a comparable group of women and
children in the spring of 1977 as part of
USDA's Nationwide Food Consumption Survey
1977-78. Dietary intakes by both women and
children were relatively lower in fat and
higher in carbohydrate in 1985 than in 1977.
The women in the CSFII survey reported diets
that provided 37 percent of total Calories
from fat--down from 41 percent in 1977;
and 46 percent of total Calories from
1 Copies of the report, GPO No. 001-000-
04458-3, are available for $4.25 from the
Superintendent of Documents, Government
Printing Office, Washington, DC 20402
(202-783-3238).
2 For a more complete description of the
survey, see "Continuing Survey of Food
Intakes by Individuals," by Robert L. Rizek
and Linda P. Posati, Family Economics Review
1985(1): 16-17.
carbohydratedrate--up from 41 percent in
1977. Total Calories consumed were 6 percent
higher in 1985 than in 1977.
Women's intakes on average (regardless of
income, race, region, or urbanization) were
above the 1980 Recommended Dietary
Allowances (ROA) for 8 of 15 nutrients but
failed to meet the RDA for vitamin B-6,
vitamin E, folacin, calcium, iron, magne­sium,
and zinc. Children's intakes of food
energy and nutrients, expressed as percent­ages
of the 1980 RDA, were higher in 1985
than in 1977. However, their iron and zinc
intakes failed to meet the RDA (88 percent
and 84 percent, respectively) in 1985.
Both women and children reported drinking
a higher percentage of lowfat or skim milk
than whole milk in 1985. They both used more
grain products. Women shifted away from
eating meat separately toward eating meat as
part of mixtures, such as stews, and so
forth (see table below). A higher proportion
of women reported use of soft drinks in 1985
than in 1977.
Eating snacks was reported by larger
percentages of women and children in 1985
than in 1977. In 1985, 76 percent of the
women and 83 percent of the children identi­fied
one or more of their eating occasions
as a "snack." In 1977, 60 percent of the
women and 62 percent of the children
reported one or more snacks. In 1985, 57
percent of women and 43 percent of children
obtained and ate some food away from home
on the day of the survey, compared with
45 percent of women and 30 percent of
children in 1977.
Source: U.S. Department of Agriculture,
Human Nutrition Information Service, 1985,
Women 19-50 Years and Their Children 1-5
Years, 1 Day--1985, Nationwide Food Con­sumption
Survey, Continuing Survey of Food
Intakes by Individuals, NFCS, CSFII Report
No. 85-1.
Use of selected foods tn a day tn spring 1985, by women ages 19 to 50, and change from spring 1977
Food group or subgroup
Total meat, poultry, and fish •••••••••••••
Meat mixtures .••.•••...... • • • • • • • • • • • • •
Beef (reported se~arately) •••••••••••••
Pork (reported separately) •••••••• • • • • •
Poultry (reported separately) •••••• • • • • •
Fish and shellfish (reported)
separately) ••••••••••••••••••••••••••••
Total fluid milk ••••••••••••••• • • • • • • • • • • •
Whole ••••••••••• • • • • • • • • • • • • • • • • • • • • • • •
Lowfat or skim •..•.....•.. • • · · · · • · · • • • •
Eggs •••••••••••••• ••• • • • • • • • • • • • • • • • • • • • •
Total vegetables . ....... • • • • • • • • • • • • • • • • • •
Total grain products ....... • • • • • • • • • • • • • •
Grain mixtures .••••..•.. • • • • • • • • • • • • • • •
Total carbonated soft drinks ••• • • •• • • • • • • •
Regular ••...••...•.•• · · · · · · · • • • • • • • • • • •
Low-calorie . .••.....•. • • • • • • • • • • • • • • • • • •
Individuals
using
Percent
88
37
23
20
19
12
51
26
26
24
83
94
26
54
36
20
Mean intakes
1985 Otange fran
1977 to 1985
Grams Percent
181 -3
88 +35
27 -45
14 -22
22 -8
13 +18
141 -5
64 -35
77 +60
18 -28
173 -8
209 +29
74 +72
287 +53
179 +28
105 +123
Source: u.s. Department of Agriculture, Human Nutrition Information Service, 19~5, Women 19-50 Years and
Their Children 1-5 Years, 1 Day--1985, Nationwide Food Consumption Survey, Contmuing Survey of Food
Intakes by Individuals, NFCS, CSFII Report No. 85-1.
1986 No.2 family Economics Review 27
Food Habits of
Vietnamese Immigrants
By Amy Tong
Home economist
Human Nutrition Information Service
Since 1975, a large number of Vietnamese
refugees have fled to the United States from
South Vietnam. The Vietnamese are making a
relatively rapid assimilation into American
society. Nevertheless, these immigrants
encounter many problems in making the tran­sition,
including a different climate, an
unfamiliar· language, scarce or expensive
housing, lack of employment, and culture
shock. Unfamiliar food and a different food
marketing system are among the most
immediate problems confronting Vietnamese
immigrants.
TRADITIONAL FOOD HABITS
In Vietnam, food is purchased daily.
Vendors sell meat, seafood and fish, fresh
produce, and other foods in open markets.
The Vietnamese spend much time in food
preparation. Meat and vegetables are cut
into bite-size pieces before they are
cooked. Cooking methods include boiling,
steaming, stir-frying, simmering, and
charcoal broiling.
In the homeland, a Vietnamese typically
consumes three meals a day. Breakfast is
usually a light meal served with a soup
called pho (which contains rice noodles,
thin slices of beef or chicken, bean
sprouts, and fresh herbs), or eggs with
french bread, or sticky rice with mung beans
(xoi). Lunch and dinner are more substan­tial,
consisting of several dishes served
communal style. Rice is eaten with small
quantities of fish, seafood, or meat;
soybean curd (tofu); and fresh vegetables.
Other dishes include soup and fresh fruits.
The Vietnamese use fish sauce, nuoc mam,
as a condiment and as a seasoning in
addition to soy sauce and salt. Nuoc mam is
prepared by fermenting layers of fresh fish
and salt in large barrels. After several
months, a liquid that contains significant
amounts of protein and other water-soluble
nutrients is drained off. The first draining
is considered t~ be the best quality fish
sauce (nuoc mam nhut).
Tea typically is consumed at every meal.
The Vietnamese will drink carbonated bever­ages
but only occasionally. Fresh cow's milk
and other dairy products, however, are
nearly unknown. In the cities the well-to-do
have acquired a taste for canned, sweetened
condensed milk and often use it in breakfast
coffee.
CHARACTERISTICS OF VIETNAMESE IMMIGRANTS (_!)
More than 0. 5 million Vietnamese have been admitted to the United States since 1975.
Forty percent of this population resettled in California, and the remaining 60 percent
are scattered across the country. The greater Washington, DC, area has the largest
number of Vietnamese immigrants of any metropolitan area in the Nation.
The high educational level of Vietnamese immigrants has contributed to easing
language and employment barriers compared to immigrants from other countries. Over 36
percent have attended college. Monthly take-home income of Vietnamese immigrants is
higher than that of Cambodian and Laotian immigrants.
The Vietnamese live in nuclear or extended families with an average of five members.
This large size has made it difficult for many families to find appropriate housing
immediately. However, with a socially ingrained ethic of shared familial responsibility
and a lifestyle oriented toward few goods, minimal luxury, and a propensity to save,
many Vietnamese have been able to purchase single-family dwellings.
ZB fam i ly Economics Review 1986 No.2
DIETARY PATTERNS IN THE UNITED STATES
What has happened to Vietnamese dietary
habits in the United States? Have the Viet­namese
families adopted an American diet? Or
have they maintained the traditional food
patterns? A limited survey conducted in 1979
provides some insights into the food
patterns of Vietnamese immigrants (2).
Detailed information on food habit; of 50
households of Vietnamese immigrants who came
to the greater Washington, DC, area in 1975
was obtained through a dietary recall of the
type of meals, the foods used (aided by a
comprehensive food list). and the increase
or decrease in consumption of selected foods
in the United States compared with Vietnam.
The interview was aimed at the female house­hold
member who was most responsible for
family food preparation. A discussion of the
major findings follows.
Changes in Food Practices
In the United States, the Vietnamese
generally changed their food buying
practices--that is, they made purchases less
often and shopped for food in oriental food
stores and supermarkets. Many dietary
modifications occurred as well.
Although rice continued to be eaten abun­dantly
by all 50 households at least once a
day (at supper in the evening). it had been
partially replaced or supplemented by bread
or instant noodles at lunch and cereals at
breakfast. The consumption of red meat and
poultry was higher in this country. where
costs are more reasonable than in the home­land.
On the other hand, fish and seafood
were eaten much less because of the lack of
fresh and familiar kinds in the super­markets.
The survey further showed a
decrease in consumption of bananas and an
increase in consumption of oranges and
juices.
In all, 30 percent of the families in the
survey changed their eating habits .after
they came to America, but the remaining 70
percent did not change at all. Those who had
modified their eating patterns cited various
reasons. For example, many women worked
outside the home; consequently, they had
less time to shop for familiar foods. These
women also had less time than in Vietnam to
prepare traditional meals and had none of
the kitchen help that many previously
depended on. Of course, there is always
pressure to one degree or another to adapt
to the American lifestyle. This pressure
seemed to be greater in Vietnamese families
having children in school. As a result of
their school participation in the American
ways of life, the children often become the
agents in bringing about changes in the
traditional food habits. Nevertheless, the
Vietnamese immigrants, particularly the
older generations, continued to eat native
foods because they are foods they like and
have always eaten. Also, this adherence to
traditional food habits provided psycho­logical
stability and reassurance during the
period of great uncertainty which developed
as the refugees moved from one country. with
its tradition and culture. to a country that
is totally different.
Dietary Overview
Rice, vegetables, poultry. fruit, and pork
and pork products were the five types of
food most frequently eaten by the Vietnamese
immigrants. Milk and milk products was the
least used of the basic food groups.
Problems associated with drinking milk due
to lactose intolerance have been reported to
be high among the Vietnamese <.!). Respon­dents
expressed dislike for some American
foods (see table). Reasons frequently cited
were texture, flavor, and high fat content.
American food• liked and disliked by VIetnamese lmmlgi"GIIIa1
Food it ems
Likes :
Steak ••••••••••••••••• •• • • •
Fried chicken • • ••••••••••• •
Roast beef •••••••••• •• ••• • •
Barbecue ••••••••• • ••••••• ••
Spaghetti and meatballs ....
Ham •••••••••• • •••• •••••••••
Cheeseburgers ••••••••••••••
Potato chips •••••••••••••••
Turkey ••••• • ••••••••••••• ,.
Macaroni and cheese •• • •••••
Potato salad •••••••••••• • •••
Apple pie ................. .
Dislikes:
Hot dogs ••••••••••• • •••••••
Hamburgers •••••••• , •••••••
Number of households
20
14
12
5
4
3
3
3
2
1
1
1
24
18
1 50 households surveyed in Washington, DC, in 1979.
Source: Tong, A., 1979, Food habits of Vietnamese
immigrants in the greater Washington, DC, area,
(Unpublished thesis, Howard University, Washington, DC).
1986 No.2 family Economics Rev i ew 29
All 50 household respondents had tasted
American food--8 at the homes of American
friends, 22 at restaurants, and 18 at both
places. Only 2 families had tried American
food in their own homes only.
Compared to the American diet, the diets
of the Vietnamese immigrants had a much
smaller amount of meat and fat and dairy
products. The Vietnamese generally ate
adequate amounts of starch and fiber. The
average number of times people had foods
from the fats, sweets (cookies, cakes, and
so forth), and alcohol group was relatively
low. On the other hand, the consumption of
soft drinks was high.
Guidance for Nutrition Educators
The diet of Vietnamese immigrants is basi­cally
a healthy one. The Vietnamese should
be encouraged to maintain their good dietary
habits and modify poor food practices by
reducing the amount of salt and increasing
the consumption of milk and dairy products.
Nutrition educators and health service
providers must be aware of cultural differ-ences
when providing nutrition advice. With
nutrition education, balanced diets based on
readily available American foods (yet
prepared in a traditional manner) are
possible--and may even in the long run
enrich America's diverse dietary patterns
and culinary heritage.
SELECTED REFERENCES
1. Anh, N.T., T.K. Thuc, and J.D. Welsh.
1977. Lactose malabsorption in adult
Vietnamese. American Journal of
Clinical Nurition 30:468-469.
2. Tong, A. 1979. Food habits of
Vietnamese immigrants in the greater
Washington, DC, area. [Unpublished
thesis, Howard University, Washington,
DC.]
3. U.S. Department of Health and Human
Services, Social Security Administra­tion,
Office of Refugee Resettlement.
1985. Report to the Congress--Refugee
Resettlement Program.
SubscdpUon Order Or
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Some New USDA Charts
Chart 142
Monthly Household Cash Income by Race
Under $600---------'-<o
$600-1 '199 ------/
$1 ,200-1 , 999-----+--"""f.~-­$
2,000-2,999--- - --\---+-­Over
$2,999 ---------'"'c-
White
Black
First quarter, 1984 data. Average income. Source: Survey of Income and
Program Part icipation. Bureau of the Census.
Chart 144
Weekly Earnings, Full· Time Wage and Salary
Workers
Dollars
Managerial and
professional 463
Precision
production,
3861
craft, and
repair
Technical,
sales, and
administrat ive 3001 I
support
Operators,
fabricators, 2871 I
and laborers
Service
occupations 2081
Farming, forestry, I
and f ishing 203_
'-------'
1984 median earn ings. Source: Bureau of Labor Statistics.
Chart 143
Monthly Household Cash Income by
Family Household Type
Percent
100 -
80 -
60 -
40-
20 -
o_
Married
couple
Female
householder
All other
famil ies
Over$2,999
$2,000-$2,999
$600 -$1 '199
Under $600
First quarter, 1984 data. Average income. Households headed by females
had children under 18, but no husbands present. Source: Survey of Income
and Program Participation, Bureau of the Census.
Char1146
Loan Rates
Percent
20
18
16
14
12
10
1981 82
•••
•• •• ••
Credit card
•••. .. ......... ········
83
Annual averages. Source: Federal Reserve Bulletm.
84
1986 No.2 Family Econom i cs Review 31
Households, Families, and
Living Arrangements,
March 1985
There were approximately 86.8 million
households in the United States in March
1985, a net increase of about 1.4 million
households over the previous year. Since
1980 the number of households has increased
by an average of 1. 2 million annually,
compared with 1.6 million annually from 1970
to 1980.
Nonfamily households accounted for the
greatest proportion of the increase in the
number of households between 1980 and 1985
(48 percent). Married-couple households
accounted for the smallest share of the
Household composition--1985, 1980, and 1910
[Numbers in thousands]
type of household 1985
increase (21 percent), whereas those family
households not maintained by married couples
accounted for 32 percent.
The share of all households represented by
families has fallen slightly since 1980 but
is substantially below the corresponding
proportion for 1970 (see table below). In 1985
there were 50.4 million married-couple
families. Of other family households, 10.1
million had a female householder (no husband
present), and 2. 2 million had a male house­holder
(no wife present). There were 24.1
million nonfamily households, 14.0 main­tained
by women and 10.1 maintained by men.
The average number of persons per
household was 2.69 in 1985--the lowest ever
recorded. Corresponding numbers in 1980 and
1980 1970
Number Percent Number Percent Number Percent
All households •••••••••••••••••••••••• 86,789 100.0 80,776 100.0 63,401 100.0
Family households •••••••••••••••••• 62,706 72.3 59,550 73.7 51,456 81.2
No own children under 18 •••••••• 31,594 36.4 28,528 35.3 22,725 35.8
With own children under 18 ••••••• 31,112 35.8 31,022 38.4 28,731 45.3
Married-couple family ••••••••••••• 50,350 58.0 49,112 60.8 44,728 70.5
No own children under 18 •••••• 26,140 30.1 24,151 29.9 19,196 30.3
With own children under 18 ••••• 24,210 27.9 24,961 30.9 25,532 40.3
Other family, male householder ••• 2,228 2.6 1,733 2.1 1,228 1.9
No own children under 18 •••••• 1,331 1.5 1,117 1.4 887 1.4
With own children under 18 ••••• 896 1.0 616 0.8 341 0.5
Other family, female householder • 10,129 11.7 8,705 10.8 5,500 8.7
No own children under 18 •••••• 4,123 4.8 3,261 4.0 2,642 4.2
With own children under 18~ •••• 6,006 6.9 5,445 6.7 2,858 4.5
Nonfamily households ••••••••••••••• 24,082 27.7 21,226 26.3 11,945 18.8
Male householder ••••••••••••••••• 10,114 11.7 8,807 10.9 4,063 6.4
Living alone ...•.. ....•....•..•• 7,922 9.1 6,966 8.6 3,532 5.6
Female householder ••••••••••••••• 13,968 16.1 12,419 15.4 7,882 12.4
Living alone .................... 12,680 14.6 11,330 14.0 7,319 11.5
Source: U.S. Department of Commerce, Bureau of the Census, 1985, Households, families,
marital status, and living arrangements: March 1985 (Advance report), Current Population
Reports, Population Characteristics, P-20, No. 402.
J2 family Economics Review 1986 No.2
1970 were 2.76 and 3.14. Average family size
also has declined. from 3. 58 in 197 0 to 3. 29
in 1980 and 3. 23 in 1985. These changes re­flect,
among other things, a decrease in the
average number of persons under 18 years
old in households and families and a
substantial increase in the proportion of
households that contain only one person.
One of the trends affecting changes in
household and family composition has been an
increase in the age at which young men and
women typically get married. Median age at
first marriage rose slowly between 1960 and
Consumer Prices
1970 but has increased dramatically since
1970. In 1985 the median age was 25.5 years
for men and 23. 3 years for women--an
increase since 1970 of 2.3 years for men and
2. 5 years for women. The median for women
is the highest ever recorded in the
United States.
Source: U.S. Department of Commerce,
Bureau of the Census, 1985, Households,
families, marital status, and living
arrangements: March 1985 (Advance report),
Current Population Reports, Population
Characteristics. P-20. No. 402.
Consumer Price Index for all urban consumers [ 1967 = 100]
Group
All items ................................... .
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 ••••••••••••••••••••••••••••
Jan.
1986
328.4
315.6
302.5
353.1
356.8
393.8
273.4
394.6
650.3
442.6
248.8
205.0
198.6
164.4
209.1
323.9
317.3
419.6
418.2
270.8
339.1
288.1
Unadjusted indexes
Dec. Nov.
1985 1985
327.4
313.2
299.3
352.1
355.8
392.3
272.4
393.3
657.3
439.9
248.8
209.0
202.0
172.6
213.1
324.0
317.8
412.9
414.7
268.3
336.5
286.3
326.6
311.0
296.6
351.3
355.0
391.3
271.7
392.1
641.6
440.5
248.9
211.2
203.6
176.5
215.5
323.2
317.0
412.8
413.0
269.0
335.3
285.4
Jan.
1985
316.1
307.3
296.1
339.9
342.0
371.2
257.1
387.2
621.6
441.1
244.2
199.8
193.2
161.3
208.6
314.7
309.1
394.5
391.1
261.0
319.1
277.2
Source: u.s. Department of Labor, Bureau of Labor Statistics.
1986 No.2 Family Econom ics Re vi ew 33
Updated Estimates of the Cost of Raising a Child
The cost of raising urban children: 1985 annual average; moderate-cost level 1
Region and Food Food
age of child Total at away Clothing Housing3 Medical Educa- Transpor- All
(years) haoo 2 fran care tion tat ion other•
hare
MIDWEST: 5
Under 1 ......... $4,430 $571 $0 $141 $1,905 $299 $0 $885 $629
1 ............. . .. 4, 560 701 0 141 1,905 299 0 885 629
2-3 •••••••••••••• 4,244 701 0 230 1,674 299 0 771 569
4-5 •••••••••••••• 4,494 805 146 230 1,674 299 0 771 569
6 ................ 4,701 779 146 318 1,588 299 141 771 659
7-9 •••••••••••••• 4,883 961 146 318 1,588 299 141 771 659
10-11 •••••••••••• 5,065 1,143 146 318 1, 588 299 141 771 659
12 ••••••••••••••• 5,406 1,169 175 459 1,646 299 141 828 689
13-15 •••••••••••• 5,536 1,299 175 459 1,646 299 141 828 689
16-17 •••••••••••• 6,070 1,454 175 636 1,703 299 141 913 749
Total •••••••••• 90,100 18,206 2,218 6,218 30,024 5,382 1,692 14,618 11,742
NORTHEAST:
Under 1 ......... 4,389 675 0 141 1,934 299 0 771 569
1 ................ 4,545 831 0 141 1,934 299 0 771 569
2-3 •••••••••••••• 4,425 805 0 247 1,761 299 0 714 599
4-5 •••••••••••••• 4,675 909 146 247 1,761 299 0 714 599
6 ................ 5,030 909 175 336 1,732 299 176 714 689
7-9 •••••••••••••• 5,212 1,091 175 336 1,732 299 176 714 689
10-11 ............ 5,445 1,324 175 336 1,732 299 176 714 689
12 ••••••••••••••• 5,776 1,324 175 494 1, 790 299 176 799 719
13-15 •••••••••••• 5,932 1,480 175 494 1, 790 299 176 799 719
16-17 •••••••••• •• 6,357 1,636 204 618 1,819 299 176 856 749
Total .......... 94,976 20,800 2,450 6,498 32,102 5,382 2,112 13,590 12,042
SOUTH:
Under 1 ......... 4,826 623 0 159 2,050 333 0 942 719
1 ................ 4,956 753 0 159 2,050 333 0 942 719
2-3 •••••••••••••• 4,643 727 0 247 1,819 333 0 828 689
4-5 .............. 4,867 805 146 247 1,819 333 0 828 689
6 •••••••••••••• •• 5,169 805 175 336 1, 732 333 211 828 749
7-9 .............. 5,325 961 175 336 1,732 333 211 828 749
10-11 •••••••••••• 5,533 1,169 175 336 1,732 333 211 828 749
12 ............... 5,895 1,169 204 494 1,790 333 211 885 809
13-15 •••••••••••• 6,050 1,324 204 494 1,790 333 211 885 809
16-17 •••••••••••• 6,495 1,454 204 636 1,848 333 211 970 839
Total .......... 98,047 18,515 2,566 s. 570 32,624 5,994 2,532 15,644 13,602
WEST:
Under 1 ......... 4, 753 623 0 141 1,992 366 0 942 689
1 ................ 4,909 779 0 141 1,992 366 0 942 689
2-3 •••••••••••••• 4,656 753 0 230 1,790 366 0 828 689
4-5 •••••••••••••• 4,935 857 175 230 1,790 366 0 828 689
6 ................ 5,309 831 204 336 1,761 366 176 856 779
7-9 .............. 5,491 1,013 204 336 1,761 366 176 856 779
10-11 •••••••••••• 5,725 1,247 204 336 1,761 366 176 856 779
12 •• ••••• •••••••• 6,040 1,247 204 477 1,819 366 176 942 809
13-15 •••••••••••• 6,169 1,376 204 477 1,819 366 176 942 809
16-17 •••••••••••• 6,764 1,558 233 600 1,905 366 176 1,027 899
Total .......... 100,151 19,477 2,856 _6,326 32,796 6,588 2,112 16,154 13,842
1 Annual cost of raising a child from birth to age 18, by age, in a husband-wife family with no more than 5 children.
For more information on these and additional child cost estimates, see USDA Miscellaneous Publication No. 1411, "USDA
Estimates of the Cost of Raising a Child : A Guide to Their Use and Interpretation," by Carolyn S. Edwards, Family
Economics Research Group, Agricultural Research Service, USDA.
2 Includes home-produced food and school lunches.
3 Includes shelter, fuel, utilities, household operations, furnishings, and equipment.
~Includes personal care, recreation, reading, and other miscellaneous expenditures.
5 Formerly the North Central Region.
J4 family Economics Review 1986 No.2
The coat of nrfafng rur-al nonfarm chfldren: 1985 annual aver-age; moder-ate-coat level 1
Region and Food Food
age of child Total at away Clothing Housing3 Medical Educa- Transpor- All
(years) hane2 fron care tion tat ion other4
hane
MIDWEST: 5
Under 1 ......... $4,186 $519 $0 $124 $1,819 $299 $0 $856 $569
1 •••••••••••••••• 4,316 649 0 124 1,819 299 0 856 569
2-3 •••••••••••••• 3,836 623 0 194 1,530 266 0 714 509
4-5 •••••••••••••• 4,057 727 117 194 1,530 266 0 714 509
6 •••••••••••••••• 4,392 727 146 300 1,501 266 141 742 569
7-9 •••••••••••••• 4,548 . 883 146 300 1,501 266 141 742 569
10-11 •••••••••••• 4,756 1,091 146 300 1,501 266 141 742 569
12 ••••••••••••••• 5,119 1,091 146 459 1,559 266 141 828 629
13-15 •••••••••••• 5,249 1,221 146 459 1,559 266 141 828 629
16-17 •••••••••••• 5,633 1,350 175 565 1 588 299 141 856 659
Total •••••••••• 83,968 16,880 2,044 5, 790 28,176 4,920 1,692 14,044 10,422
NORTHEAST:
Under 1 ......... 4,861 623 0 141 2,050 299 0 999 749
1 •••••••••••••••• 4,991 753 0 141 2,050 299 0 999 749
2-3 •••••••••••••• 4,765 727 0 230 1,877 299 0 913 719
4-5 •••••••••••••• 5,044 831 175 230 1,877 299 0 913 719
6 •••••••••••••••• 5,421 831 204 336 1,848 299 211 913 779
7-9 •••••••••••••• 5,577 987 204 336 1,848 299 211 913 779
10-11 •••••••••••• 5,811 1,221 204 336 1,848 299 211 913 779
12 ••••••••••••••• 6,161 1,221 204 512 1,905 299 211 970 839
13-15 •••••••••••• 6,316 1,376 204 512 1,905 299 211 970 839
16-17 •••••••••••• 6,864 1,532 233 671 1,963 299 211 1,056 899
Total .......... 102,0811 19,139 2,856 6,608 34,242 5,382 2,532 17,120 14,202
SOUTH:
Under 1 ......... 5,026 623 0 159 2,050 333 0 1,142 719
1 •••••••••••••••• 5,130 727 0 159 2,050 333 0 1,142 719
2-3 •••••••••••••• 4,643 701 0 247 1,761 333 0 942 659
4-5 •••••••••••••• 4,922 805 175 247 1,761 333 0 942 659
6 •••••••••••••••• 5,134 779 175 336 1,703 333 176 913 719
7-9 •••••••••••••• 5,290 935 175 336 1,703 333 176 913 719
10-11 •••••••••••• 5,498 1,143 175 336 1,703 333 176 913 719
12 ••••••••••••••• 5,907 1,143 204 512 1,761 333 176 999 779
13-15 •••••••••••• 6,037 1,273 204 512 1, 761 333 176 999 779
16-17 •••••••••••• 6,549 1,428 233 724 1,790 333 176 1,056 809
Total .......... 98,402 18,050 2,682 6,818 31,986 5,994 2,112 17,638 13,122
WEST:
Under 1 ......... 5,220 623 0 141 2,079 366 0 1,142 869
1 •••••••••••••••• 5,350 753 0 141 2,079 366 0 1,142 869
2-3 •••••••••••••• 4,829 727 0 230 1,790 333 0 970 779
4-5 •••••••••••••• 5,108 831 175 230 1,790 333 0 970 779
6 •••••••••••••••• 5,510 805 175 353 1, 761 366 211 970 869
7-9 •••••••••••••• 5,692 987 175 353 1,761 366 211 970 869
10-11 •••••••••••• 5,900 1,195 175 353 1,761 366 211 970 869
12 ••••••••••••••• 6,310 1,195 204 530 1,819 366 211 1,056 929
13-15 •••••••••••• 6,465 1,350 204 530 1,819 366 211 1,056 929
16-17 •••••••••••• 7,082 1,532 233 618 1,934 366 211 1,199 989
Total .......... 104,699 18,957 2,682 6,676 33,028 6,456 2,532 18,606 15,762
1 Annual cost of raising a child from birth to age 18, by age, in a husband-wife family with no more than 5 children.
For more information on these and additional child cost estimates, see USDA Miscellaneous Publication No. 1411, "USDA
Estimates of the Cost of Raising a Child: A Guide to Their Use and Interpretation," by Carolyn S. Edwards, Family
Economics Research Group, Agricultural Research Service, USDA.
2 Includes home-produced food and school lunches.
3 Includes shelter, fuel, utilities, household operations, furnishings, and equipment.
4 Includes personal care, recreation, reading, and other miscellaneous expenditures.
5 Formerly the North Central Region.
1986 No.2 Family Economics Review J5
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1 Cost of food at home esttmated (or food plans at 4 cost levels, January 1986, U.S. average
Sex-age group
FAMILIES
Family of 2: z
20-50 years
51 years and over ••••••••••••••••••
Family of 4:
Couple, 20-50 years and children--
1-2 and 3-5 years ••••••••••••••••
6-8 and 9-11 years •••••••••••••••
INDIVIDUALS3
Child:
1-2 years
3-5 years
6-8 years
9-11 years ........................ .
Male:
12-14 years
15-19 years
20-50 years ••••••••••••••••••••••••
51 years and over ••••••••••.•.•••••
Female:
12-19 years ••••••••••••••••••••••••
20-50 years ••••••••••••••••••••••••
51 years and over •••••••••••••••••
Thrifty
plan
$37 .so
35.70
55.00
63.10
9.90
10.70
13.10
15.60
16.30
16.90
18.10
16.40
16.20
16.30
16.10
Cost for 1 week
Low-cost
plan
$47.80
45.90
68.70
80.70
12.00
13.20
17.40
19.80
22.50
23.30
23.10
22.00
19.50
20.40
19.70
Mxlerate­cost
plan
$59.20
56.50
84.10
101.10
14.00
16.30
21.80
25.50
28.00
28.90
29.00
27.00
23.70
24.80
24.40
Liberal
plan
$73.40
67.60
103.00
121.60
16.80
19.50
25.50
29.40
32.90
33.40
35.00
32.40
28.60
31.70
29.10
Thrifty
plan
$164.00
155.10
238.10
273.40
42.80
46.20
56.80
67.50
70.70
73.20
78.40
71.10
70.20
70.70
69.90
Cbst for 1 tnonth
Low-cost
plan
$207.40
198.70
297.60
349.80
52.00
57.10
75.50
85.80
97.40
101.00
100.20
95.20
84.50
88.30
85.40
Mbderate- Liberal
cost plan plan
$256.20
245.20
363.90
437.60
60.60
70.40
94.40
110.30
121.50
125.20
125.60
117.10
102.50
107.30
105.80
$317.70
293.10
445.90
526.70
72.80
84.30
110.30
127.60
142.60
144.90
151.40
140.40
123.90
137.40
126.10
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.
z 10 percent added for family size adjustment. See footnote 3.
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.
()
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9.
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0
0.
9. g:
~
~
~
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~ 9.
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Cost of food at home for food plans at 3 cost levels, January 1986, Northeastern region 1
Sex-age group
FAMILIES
Family of 2: 2
20-50 years ••••••••••••
51 years and over ••••••
Family of 4:
Couple, 20-50 years
and children--
1-2 and 3-5 years ••••
6-8 and 9-11 years •••
INDIVIDUALS 3
Child:
1-2 years
3-5 years
6-8 years
9-11 years •••••••••••••
Male:
12-14 years
15-19 years
20-50 years
51 years and over ••••••
Female:
12-19 years ••••••••••••
20-50 years ••••••••••••
51 years and over ••••••
Cost for 1 week
Low-cost
plan
$~0. 60
48.30
72.30
85.10
12.50
13.80
18.30
20.80
23.70
24.60
24.50
23.20
20.50
21.50
20.70
Mbderate- Liberal
cost plan plan
$61.70
59.00
87.40
105.30
14.40
16.90
22.70
26.50
29.20
30.20
30.30
28.20
24.60
25.80
25.40
$77.40
71.40
108.40
128.10
17.50
20.50
26.70
31.00
34.60
35.20
37 .oo
34.20
30.20
33.40
30.70
Cost for 1 month
Low-cost
plan
$219.50
208.90
313.70
368.90
54.30
59.90
79.30
90.10
102.60
106.70
106.30
100.40
88.90
93.20
89.50
MOderate- Liberal
cost plan plan
$267.20
255.80
378.80
456.00
62.60
73.30
98.30
114.80
126.60
130.90
131.20
122.40
106.80
111.70
110.10
$335.20
309.40
469.60
555.10
76.00
88.90
115.90
134.50
150.10
152.70
160.10
148.30
131.00
144.60
133.00
1 Assumes that food for all meals and snacks is purchased at the store and prepared at home.
These estimates were computed from quantities in food plans published in Family Economics
Review, 1983 No. 2. The costs of the food plans are estimated by updating prices paid by
households surveyed in the Northeast in 1977-78 in USDA's Nationwide Food Consumption
Survey. USDA updates these survey prices using information from the Bureau of Labor
Statistics for Boston, New York, and Philadelphia.
2 10 percent added for family size adjustment. See footnote 3.
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.
1986 No.2 Family Economics Review 37
Cost of food at home for food plans at 3 cost levels, January 1986, Midwestern region 1
Sex-age groups
FAMILIES
Family of 2: 2
20-50 years ••••••••••••
51 years and over ••••••
Family of 4:
Couple, 20-50 years
and children--
1-2 and 3-5 years ••••
6-8 and 9-11 years •••
INDIVIDUALS 3
Child:
1-2 years ••••••.••..•••
3-5 years .•••••••••••••
6-8 years ............. .
9-11 years •••••••••••••
Male:
12-14 years ••••••••••••
15-19 years ••••••••••••
20-50 years ••••••••••••
51 years and over ••••••
Female:
12-19 years ••••••••••••
20-50 years ••••••••••••
51 years and over ••••••
Cost for 1 week
Low-cost
plan
$45.80
44.20
65.70
77.30
11.50
12.60
16.70
19.00
21.50
22.10
22.10
21.20
18.50
19.50
19.00
MOderate- Liberal
cost plan plan
$57.00
55.00
81.20
97.50
13.60
15.80
21.10
24.60
27.10
27.80
27.90
26.30
22.80
23.90
23.70
$69.70
64.80
98.20
115.60
16.20
18.60
24.20
28.00
31.20
31.60
33.20
31.00
27.10
30.20
27.90
Cost for 1 roonth
Low-cost
plan
$198.40
191.70
284.80
334.80
49.80
54.60
72.30
82.10
93.10
95.90
95.80
91.90
80.30
84.60
82.40
MOderate- Liberal
cost plan plan
$247.10
238.50
351.80
422.60
58.90
68.30
91.20
106.80
117.30
120.50
121.10
113.90
98.60
103.50
102.90
$301.90
280.40
425.20
50