Family Economics Review [1966, Number 2]

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Consumer and Food Economics Research Division, Agricultural Research Servi•·•·~
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CONTENTS
Page
INCOME AND CONSUMPTION AS MEASURES OF ECONOMIC STATUS ------ 3
FARM FAMILY SPENDING FOR INSURANCE, GIFTS; AND CONTRIBUTIONS 5
TWENTY-FIVE YEARS OF CEREAL ENRICHMENT --------------------- 10
SOME NEW USDA PUBLICATIONS --------------------------------- 13
THE COST OF USDA FOOD PLANS AND FAMILY GROCERY BILLS ------- 13
MEDICAL CARE PROGRAM FOR THE AGED BECOMES EFFECTIVE -------- 17
CONSUMER PRICES -------------------------------------------- 19
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FAMILY ECONOMICS REVIEW is a quarterly report on
research of the Consumer and Food Economics Research
Division and on information from other sources relat­ing
to economic aspects of family living. It is devel­oped
by Dr. Emma G. Holmes, research family economist,
with the cooperation of other staff members of the
Division. It is prepared primarily for home economics
agents and home economics specialists of the Cooperative
Extension Service.
INCOME AND CONSUMPTION AS MEASURES OF ECONOMIC STATUS
_A year's income is commonly used to measure the economic well-being of
families. This practice has been followed, for example, in estimating the
extent of poverty in the United States. A family's level of consumption is
not determined by a year's income alone, however. It depends also on the fami­ly's
net worth--usually a product of past income--and its future prospects. A
farm family may be able to spend $6,000 to maintain its normal manner of living
in a year when crop failure has reduced its income to the vanishing point.
Such a family should not b.e called poor. Also, many young families take the
breadwinner's next raise into account in setting their scale of living.
Economic status--a complex of income, net worth, and future prospects-­cannot
be measured precisely. However, it is reflected in a family's level of
consumption. A comparison of the incomes families receive with the value ~f
the goods and services they consume in a year shows the error of measuring
economic status by income alone.
Consumption frequently exceeds income, according to data from the 1960-61
Survey of Consumer Expenditures, conducted by the U.S. Departments of Agricul­ture
and Labor. In the North Central Region, for example, 17 percent of the
farm families had after-tax money incomes under $2,000 in 1961, but only 9 per­cent
had consumption that low (table 1).!/ Here--and elsewhere in this article
unless otherwise specified--"income" or "money income" includes money income
after tax plus the value of food and housing received as pay but not the value
of home-produced food. Throughout this article "consumption" includes all
money actually paid during the year for consumer goods and services, plus the
retail value of qome-produced food and of goods and services received without
direct expense.§! Thus, the usual concept of income as a measure of economic
status is being compared with a more precise measure. Even if income is
defined to include the value of home-produced food to match the definition of
consumption, more families had incomes under $2,000 than had consumption that
low--12 percent and 9 percent, respectively.
The consumption level of low-income families gives some indication of the
extent to which low income is a temporary condition, to be distingui~hed from
low economic status. Of the families with money incomes below $2,000 in 1961,
66 percent had consumption levels above $2,000--60 percent consuming between
$2,000 and $6,000 worth of goods and services and 6 percent more than $6,000
worth (table 2). Only for the 34 percent that consumed less than $2;000 worth
could income be said to be a relatively true measure of economic status.
sis.
Data from the North Central Region have been retabulated for this analy­"
Families" include financially independent individuaJ.s as well as those
made up of two or more persons .
gj In the Statistical Reports of t~e.survey, the de~init~on of ~ncome i~
the same as that above but the defin~t~on of consumptlon d~ffers ~n that ~t
includes the total cost of credit purchases made during the schedule year-­regardless
of when payment is made--and excludes payments made on credit
purchases of earlier year.
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Table 1.--Distribution of farm families by after-tax income and value of con­sumption,
North Central Region, 1961
No. of Percent of families at specified level
families Under $2,000 $4,000 $6,000
Classification in All $2,000 to to and
sample $3,999 $5,999 over
Money income after tax -- 742 100 17 29 24 30
Money plus nonmoney
income after tax !/---- 742 100 12 26 26 36
Value of consumption g/-- 742 100 9 42 31 18
!( Nonmoney income is mainly the retail value of home-produced food.
gj Consumption includes all money paid during the year for consumer goods
and services, plus the retail value of home-produced food and of goods and
services received without direct expense.
Table 2.--Percent of low-income farm families (under $2,000 after tax) with
consumption at specified levels, North Central Region, 1961
(Percentages do not add to 100 because of rounding)
Classification
Money income after tax
under $2,000 ------------
Money plus nonmoney income
after tax under $2,000 ?)
!/, See footnote 2, table 1.
g{ See footnote 1, table 1.
No. of
families
in
sample
128
87
Percent of families with value of
consumption at specified level 1/
Under $2,000 $4,ooo $6,ooo
All $2,000 to to and
$3,999 $5,999 over
100 34 47 13 6
101 43 39 14 5
It was not only because these farm families had home-produced food that
th~y could live above their incomes, though this food did help. If the value
of home-produced food is included in income, 58 percent of the families with
incomes below $2,000 had consumption above $2,000. We must assume that these
families had other resources--savings or credit--with which they could main­tain
a level of living out of line with their year's income.
Since more families had low incomes than low consumption, it is evident
that using a year's income to measure the extent of poverty results in classi­fying
too many farm families as poor. However, the effect is not the same for
all sizes of families. A somewhat higher proportion of 2-person families and
a considerably higher proportion of larger families are at the bottom of the
scale--that is, below $2,000--when the measure is a year's income rather than a
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Table 3.--Percent of farm families below the $2,000 income and consumption
levels, by family size; North Central Region, 1961
Family size
All families ----------
1 person ------------
2 persons -----------
3 persons -----------
4 persons -----------
5 persons -----------
6 or more persons ---
Families below $2,000 level when classified by-­Money
income after tax Consumption !/
Percent
17
56
26
14
9
12
6
Percent
9
68
16
2
2
2
1
!/ See footnote 2, table 1.
year's consumption (table 3). The effect is the opposite for unrelated indi­viduals--
more are below the $2,000 level when measured by consumption than by
income.
The proportion of low-income families living above their current income is
larger in farm than rural nonfarm or urban areas, even when income is defined
to include home-produced food. This is because farmers, like other self­employed
families, have sharper year-to-year variations in income than wage and
salary workers. When their incomes vary, families tend to maintain consumption
at a relatively stable level insteaq of adjusting it to income each year. They
draw on savings or accumulate debts in the bad year, and add to savings and pay
off debts in the good years. Although salaried workers have the steadiest
level of individual earnings, their families have some year-to-year variation,
too. The number of workers may vary as the wife and children move into and out
of the labor force, some workers may "moonlight," others may be unemployed or
ill. Also, income from sources other than earnings may vary.
--Jean L. Pennock and Helen Armstrong
Sources: Table 1--Consumer Expenditure Survey Report No. 2 (1965) USDA, and
unpublished data; Table 2--unpublished CES data, USDA; Table 3--CES Report
No. 17 (1965) USDA. Copies of the reports are available free from the Consumer
and Food Economics Research Division, Agricultural Research Service, U.S.
Department of Agriculture, Federal Center Building, Hyattsville, Md. 20782.
FARM FAMILY SPENDING FOR INSURANCE, GIFTS, AND CONTRIBUTIONS
Family expenditures for personal insurance and for gifts and contributions
to persons and groups outside the family are usually small in comparison with
those for such necessities as food and clothing. Nevertheless, they are
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important items in the family budget--insurance for its promise of future
security and gifts and contributions for the personal satisfaction of sharing.
Families that like to know how they "stack up" with others in their spending
for these items may compare their own outlays with those reported in the
nationwide Survey of Consumer Expenditures~ conducted by the U.S. Department
of Agriculture and the Bureau of Labor Statistics. This article summarizes
the data on spending for insurance and for gifts and contributions by farm
families in 1961.
Insurance
In 1961, farm family ex:pendi tures for personal insurance averaged $200 ~
or 4.5 percent of their average after-tax income (table 1). !( This was a
smaller proportion of income than nonfarm families used for personal insurance.
Insurance payments amounted to 5.4 percent of the urban and 5.1 percent of the
rural nonfarm family's average after-tax income.
"Personal insurance" in this report includes payments--and deductions
from pay--for life~ endowment, annuity, personal liability, and unemployment
insurance; social security taxes; and payments into public and private retire­ment
systems. It also includes the portion of mortgage debt payments that was
for life insurance, if this could be identified. It does not include amounts
for personal insurance that were a minor part of another expenditure, such as
automobile association membership fees and installment credit charges. Nor
does it include insurance payments made on behalf of family members by
employers and others outside the family.
About 45 percent of the $200 spent for insurance went for job-related
coverage. This was mainly Social Security (Old Age,survivors, and Disability
Insurance), Railroad Retirement, and other Federal, State, and local govern­ment
retirement systems. Except for the social security taxes paid by farm
operators and other self-employed persons, payments for these job-related plans
were deducted from pay by employers and did not pass through the hands of the
families.
The remaining 55 percent of the average expenditure for insurance was
made directly by family members. Premiums on commercial life insurance of
various types accounted for almost all of this.
Almost 9 out of 10 farm families reported some insurance payment in 1961.
Many of these paid on more than one kind of insurance. More than 7 out of
every 10 families contributed to social security or other public retirement
systems. About 5 out of every 10 paid premiums on life, endowment, or annuity
policies. other types of insurance were reported much less frequently.
Undoubtedly more families were covered by insurance than had made payments in
1961, since some had payments made for them by persons outside the family and
some probably had paid-up policies.
~ Families here include financially independent single individuals as
well as those made up of two or more persons.
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Table 1.--Average expenditure per frunily for personal insur~ce, and percentage
of families reporting, 1961
Average expenditure Families reporting
(dollars) y (percent)
Item
Rural Rural
Farm nonfarm Urban Farm nonfarm Urban
Personal insurance, total .------ 200 241 323 87 86 90
Life, endowment, annuity, etc.
Veterans ------------------- 4 6 9 3 6 8
Group (deducted from pay) -- 2 7 ll 4 11 18
Other ---------------------- 95 89 129 45 51 62
Mutual aid ------------------- 2 l (g/) 8 6 1
Disability income ------------ 3 2 4 4 4 6
Other personal insurance ----- 5 6 4 9 9 6
Social Security, railroad and
other government retirement 88 119 152 73 75 81
Private retirement ----------- 2 12 17 2 5 7
y Components may not add to totals because of rounding and unc.lassifiable
insurance refunds.
?} Less than 0 .5.
Farm families with incomes at the high. end of the income scale spent more
on personal insurance than those that were less well off. A larger proportion
of the upper-income group made insurance payments, and individual payments
were larger. Frunilies with incomes of $51 000 or more paid an average of $360
for insurance, or 4 percent of income. Families with incomes under $21000
paid only $75, but this was a larger share--8 percent--of their average income.
Many of these families with under $21000 normally had incomes considerably
higher than this and had not adjusted their spending to live within their
1961 income.
Some types of frunilies spent a larger share of income for insurance than
others, even when average income was roughly the same (table 2) • Among farm
families with incomes between $21000 and $5,000 these variations were noted:
•
•
As might be expected, families at the stages or" the life cycle when
responsibilities are greatest--when the family head was 25 to 54
years old--spent a larger share f or insurance than those at other
stages.
Families with children at home used a larger share of income on
insurance than those with no children present.
Families headed by a person who attended high school or college spent
a larger share of income on insurance than those with a head whose
formal education stopped in grade school.
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Table 2. --Average amount and percent of after-tax income spent for personal insurance and for gifts and contributions
by farm families with income of $2,000 to $4,999; by family characteristics, 1961
No. of Average Average expenditure for-- Percent of income spent
Family families income for--
charac.teristic in after tax Personal Gifts and Personal Gifts and
sample insurance contributions insurance contributions
Dollars Dollars Dollars
All families ----------- 815 3,.379 141 155 4.2 4.6
Family size:
1 person ----------- 31 3,243 232 163 7.2 5.0
2 persons ---------- 253 3,230 114 193 3.5 6.0
3 persons ---------- 188 3,401 134 164 3·9 4.8
4 persons ---------- 129 3,506 178 136 5.1 3·9
5 persons ---------- 72 3,680 166 162 4.5 4.4
6 or more persons -- 142 ~,375 130 87 3.9 2.6
Age of head .:
Under 25 years ----- 20 3,619 131 86 3.6 2.4
25-54 years -------- 457 3,463 151 128 4.4 3·7
55 years and over -- 338 3,253 127 196 3·9 6.0
Family type: y
Husband-wife only -- 206 3,249 122 212 3.8 6.5
Oldest child under 6 60 3,559 146 125 4.1 3.5
Oldest child 6-17 -- 239 3,482 161 126 4.6 3.6
Oldest child
18 or over ------- 151 3,452 142 148 4.1 4.3
Education of head: gJ
8 years or less· ---- 501 3,263 106 142 3.2 4.4
9-12 years --------- 270 3,529 194 178 5.5 5.0
13-16 years -------- 41 3,765 212 156 5.6 4.1
- ------ ------- -
y Husband and wife present in each type. Families with another adult present (except an adult son or
daughter) are not included •
g/ Families headed by a person with 17 or more years of education not shown.
I
CXJ
I
Gifts and Contributions
Farm families spent an average of $221, or 5 percent of their after-tax
income, for gifts and contributions in 1961 (table 3). This was the same pro­portion
of income as urban families used for this purpose, and slightly higher
than the 4. 7 percent that rural nonfarm families used. "Gifts and contribu­tions"
here include cash outlays for the purchase of goods and services given
to persons outside the family and to organizations. They do not include the
value of home-produced food, services, ·or goods on hand that were given away
during the year.
About $120, or 55 percent of what farm families gave, went to organiza­tions.
Most of this was for church and other religious organizations, with
small amounts to welfare organizations and educational, medical, and political
causes. The remaining 45 percent--about $100--was given to persons outside
the immediate family.
Table 3.--Average expenditure per family for gifts and contributions, and
percentage of families reporting, 1961
Average expenditure Families reporting
(dollars) y (percent)
Item
Rural Rural
Farm nonfarm Urban Farm nonfarm Urban
Gifts and contributions, total 221 221 298 92 91 95
To persons not in
family, total --------------- 99 105 148 72 73 78
Cash ----------------------- 37 39 65 15 17 27
Goods and services --------- 63 66 83 70 71 75
To organizations, total ------ 121 l16 151 86 85 91
Church and other religious
organizations ------------ 107 96 115 77 73 77
Community Chest, Red Cross,
etc. --------------------- 9 13 23 64 66 74
Educational, medical, politi-cal,
and other ----------- 5 7 12 14 15 20
y Components may not add to totals because of rounding.
About 9 out of every 10 farm families contributed to one or more organi­zations:
8 out of 10 gave to churches, 6 to welfare organizations, and 1 to
a medical, political, or educational -cause. About 7 out of 10 gave gifts to
persons outside the family.
Families with incomes at the high end of the scale spent more for gifts
and contributions than those with low incomes, because more of them gave and
those who did gave more. Families with incomes of $5,000 or more used an
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average of $393 for gifts and contributions, or 4.8 percent of income.
Although families with under $2,000 gave much less--an average of $91--thia was
a larger share--9.5 percent--of their average income. Again, this reflects the
fact that 1961 income was unusually low for many of these families, but they
were maintaining their usual level of giving.
Among families at approximately the same income level, some types spent a
larger share on gifts and contributions than others (table 2) • Some varia­tions
among families with after-tax incomes between $2,000 and $5,000 were:
•
Small families --those made up of a single consumer or 2 or 3
members--gave a larger percentage of income than larger families.
Families in the contracting stages of the family life cycle-­headed
by persons 55 and over--gave a larger share than those
in the beginning and growth stages •
Families made up of hueba.nd and wife only gave a larger share
of their income than families with children.
The gifts and contributions the farm families gave in 1961 amounted to
more than they received--$221 compared with $172. It may be, however, that
they underestimated the value of what they received, much of which was in the
form of goods and services rather than cash. The reported value of goods and
services received-- including surplus food, medical care, and other assistance
in kind from public and private organizations, as well as gifts from individ­uals--
averaged $134, while cash gifts averaged $20 and public assistance and
private relief payments $18.
--Mary Jane Ellis
Sources: Tables 1 and 3 - Consumer Expenditure Survey Reports Nos. 35 (1966)
and 4o (1965) USDA, and Supplement 3,. Part c, to Consumer Expenditure Survey
Report No. 237-38 (1964) Bureau of Labor Statistics.
Table 2 - CES Reports Nos. 5 and 20 (1965) USDA. Copies of the USDA reports
are available free from the Consumer and Food Economics Research Division,
Federal Center Building, Hyattsville, Md. 20782. The BLS report is .available
from the Bureau of Labor Statistics, U.S. Department of Labor, Washington,
D.C. 20210.
TWENTY-FIVE YEARS OF CEREAL ENRICRMENT
In 1966 we are observing the 25th anniversary of the Cereal Enrichment
Program. This is .an appropriate time to review the meaning of the term
"enriched;" the beginnings and development of the program, and ita effect on
the health of the population.
The term 11enriched" was used at first with flour and bread and later
extended to .a few other cereal products. To be labeled 11enriched 11 the product
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Minimum and maximum amounts of required nutrients for foods labeled "enriched" ygj
(Milligrams per pound of product)
Item
Thiamine Riboflavin Niacin Iron Calcium
Min. Max. Min. Max. Min. Max. Min. Max. Min. Max.
Mg. ~· Mg. ~· ~· ~· Mg. ~· Mg. ~·
Bread, rolls, and
buns, white -------- 1.1 1.8 0.7 1.6 10.0 15.0 8.0 12.5 - -
Cornmeal; corn grits 2.0 3.0 1.2 1.8 16.0 24.0 13.0 26.0 - -
Cornmeal, self-rising 2.0 3·.0 1.2 1.8 16.0 24.0 13.0 26.0 500 l, 750
Farina -------------- 2.0 2.5 1.2 1.5 16.0 20.0 13.0 (~) - -
Flour, white -------- 2.0 2.5 1.2 1.5 16.0 20.0 13.0 l ·5 - -
Flour, self-rising -- 2.0 2.5 1.2 1.5 16.0 20.0 13.0 16.5 500 1,500
Macaroni and noodle
products ----------- 4.0 5.0 1.7 2.2 27.0 34.0 13.0 16.5 - -
Rice, milled -------- 2.0 4.0 (!t/)1.2 (!t/)2.4 16.0 32.0 13.0 26.0 - -
Y Information from the Federal Register, as follows: Rice - August 27, 1957; self-rising
cornmeal - August 10, 1961; other items - December 20, 1955.
gj Enrichment standards provide also for calcium and vitamin D within stated limits as
optional ingredients for each product except self-risi~g flour and self-rising cornmeal.
3/ No maximum amount has been established.
;/ Requirement stayed pending f~ther hearings.
must contain added nutrients in kinds and amounts that meet standards estab­lished
by the Federal Food and Drug Administration. The ~oods ~or which there
are Federal enrichment standards are listed in the table above. The amounts
(milligrams per pound o~ product) o~ required ingredients are shown also.
The enrichment program was launched in May 1941 by the National Nutrition
Conference ~or De~ense. This con~erence had been called by President Roosevelt
to ~ormulate recommendations ~or a national program o~ action to improve the
nutritional status o~ the population. Evidence had been accumulating ~or some
time that diets o~ many individuals were poor. Data ~rom the nationwide sur­vey
o~ ~ood consumption conducted in the 1930rs by ~ood economists o~ the USDA
had shown this. Hospitals were reporting clinical evidence o~ dietary de~ici­encies,
especially among some groups in the population. Then the World War II
dr~ ~ocused attention on the poor physical condition o~ young adults by its
unexpectedly high rate o~ rejection for physical causes related to diet.
Participating in the National Nutrition Conference were pro~essional
nutritionists, physicians, scientists ~rom industry, consumer groups, and
representatives o~ the Public Health Service and other government agencies.
Many members had been working in smaller groups by trying to initiate programs
to improve nutritional status. This meeting provided a means o~ unifying
their e~forts. During the conference they recommended enrichment of flour and
bread as an economical way of improving American dietaries. Action taken by
the Federal Food and Drug Administration in promulgating standards for enrich­ment
o~ flour was help~ul as background for the deliberations at the con~er­ence
and later in gaining support for enrichment of bread.
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NEG. 66(5)-5789 AGRICULTURAL RESEARCH SERVICE
Much of the success of the enrichment program at the beginning was due to
the voluntary cooperation of many groups, especially the baking and milling
industries and local nutrition leaders. By mid -1942 it was estimated that
three-fourths of the white bread was being enriched with iron, thiamine, nia­cin,
and riboflavin, the latter supplied largely by nonfat milk. The addition
of synthetic riboflavin was not possible until October 1943 because of
inadequate supplies.
Industry and nutrition leaders were ready to support Food Distribution
Order No. 1, issued in 1943, which required the enrichment of all commercial
white bread. This order, which applied throughout the country, was in effect
until the end of World War II.
Even before the order was issued, however, some States had begun to pass
State laws requiring enrichment of flour and bread. South Carolina in 1942
was first and later that year Louisiana passed such legislation. At the pres­ent
time 30 States, including Alaska and Hawaii, require enrichment (see
chart). Another State is currently considering an enrichment law.
Enrichment has made an important contribution to the nutritive value of
our diets, and hence to general well-being. The vitamin B-deficiency dis­eases
have been practically eliminated from the U.S. population. Because of
enrichment, the average thiamine content of our diets is increased by a third,
iron and niacin by a fifth, and riboflavin by a tenth. Since cereals are
important in low-cost diets, the benefits of enrichment are especially
significant for low-income families.
--Martha Richardson
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SOME NEW USDA PUBLICATIONS
CONSUMER EXPENDITURES AND INCOME, URBAN AND RURAL, 1960-61. USDA Reports
CES 43-44. These reports give data from the Survey of Consumer Expenditures
for the Southern and Western regions. (Single copies free from the Consumer
and Food Economics Research Division, ARS, USDA, Federal Center Building,
Hyattsville, Maryland 20782. Use your Zip Code on all requests.)
HOME CANNING OF MEAT AND POULTRY, Home and Garden Bulletin No. 106 (1966).
Supersedes Home and Garden Bulletin No. 6. (Single copies free from the Office
of Information, U.S. Department of Agriculture, Washington, D.C. 20250.)
POULTRY IN FAMILY MEALS, Home and Garden Bulletin No. 110 (1966). Super­sedes
Home and Garden Bulletin No. 45. (Single copies free from the Office of
Information, U.S. Department of Agriculture, Washington, D.C. 20250.)
THE COST OF USDA FOOD PLANS AND FAMILY GROCERY BILLS
With the recent increase in retail prices of some foods, families are
more interested than ever in their grocery bills. Many want to know what they
"should" be spending for food or how their grocery bills compare with the
amounts others spend.
Homemakers may get help in answering these questions from the "Cost of
Food at Home Estimated for Food Plans at Three Cost Levels," published quar­terly
in Family Economics Review (table 1). These costs do not show how an
average family spends or should spend its food money. Rather, they show the
costs of separate market baskets of foods that will provide well-balanced
meals that are similar to those commonly eaten in our country.
The food costs in table 1 are estimates for families who use the USDA
plans, buy all of their food, and eat all meals and snacks at home or as
lunches carried from home. They make no allowance for higher costs of meals
or snacks eaten out. The cost of food in the plans for individual families
may be more or less than the estimated amounts, depending on where they live,
prices in the stores where they shop, whether they produce some of their food,
whether they shop for bargains, how much they entertain, and how often they
eat out.
The food plans on which these cost estimates are based specify amounts
of each of 11 groups of food to buy in a week for boys and girls and men and
women of different ages. !( The costs given for the low-cost, moderate-cost,
and liberal plans assume selections within the food groups similar to those
reported in a food consumption survey by low-, middle-, and high-income fami­lies.
Prices paid by these families are updated to current levels by using
the Estimated Retail Food Prices by Cities of the Bureau of Labor Statistics.
!( Family Economics Review, October 1964.
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Table 1.--Cost of food at home estimated for food plans at
three cost levels, March 1966, U.S. average !(
Cost for 1 week Cost for 1 month
Sex-age groups ?}
low-cost Moderate- Liberal Low-cost Moderate- Liberal
plan cost plan plan plan cost plan plan
Dollars Dollars Dollars Dollars Dollars Dollars
FAMILIES
Family of 2:
20-35 years 3/ ----- 15.70 21.00 24.40 68.00 91.00 105.70
55-75 years J/ ----- 13.10 17.80 20.20 56.40 76.90 87.30
Family of 4:
Preschool children ~ 22.90 30.50 35-30 99-10 131.90 152.80
School children 2/ 26.40 35.40 41.20 114.00 152-90 178.30
INDIVIDUALS 0'
Children, under 1 year 3.10 4.00 4.30 13.50 17.50 18.80
l-3 years ---------- 4.00 5.20 5-90 17.20 22.30 25.70
3-6 years ---------- 4.60 6.20 7.20 20.10 26.90 31.00
6-9 years ---------- 5.60 7-50 8.90 24.10 32.30 38.60
Girls, 9-12 years ---- 6 .40 8 .60 9.60 27-70 37.20 41.70
12-15 years -------- 7.00 9-50 ll.OO 30.10 41.00 47.60
15-20 years -------- 7-30 9.60 10.90 31.70 41.80 47.30
Boys, 9-12 years ----- 6.50 8.80 10.10 28.10 37-90 43.60
12-15 years --------- 7.40 10.30 11.70 32.20 44.70 50.80
15-20 years --------- 8.80 11.70 13.40 38.00 50.80 58.20
Women, 20-35 years --- 6.70 8.90 10.20 29.00 38.70 44.20
35-55 years -------- 6.50 8 .60 9.90 27.90 37-30 42.70
55-75 years -------- 5-50 7.50 8.50 23.70 32.30 36.60
75 years and over -- 5.00 6.60 7-70 21.60 28.80 33-50
Pregnant ----------- 8 .00 10.40 11.70 34.60 45.00 50.50
Nursing ------------ 9.10 11.80 13.10 39.40 51.20 56.80
Men, 20-35 years ----- 7.60 10.20 12.00 32.80 44.00 ,1.40
35-55 years -------- 7.00 9-50 11.00 30.50 41.00 7· 0
55-75 years -------- 6 .40 8.70 9-90 27.60 37.60 42.80
75 years and over -- 6.00 8.40 9-50 25.80 36.30 41.30
~ Estimates computed from quantities in food plans published in Family Eco­nomics
Review, October 1964. Costs of the plans were first estimated by using
average price per pound of each food group paid by nonfarm survey families at
3 income levels in 1955. These prices were adjusted to current levels by use
of Retail Food Prices b Cities released by the Bureau of Labor Statistics.
2 Age groups include persons of the first age listed up to but not
including those of the second age.
J/ Ten percent added for family size adjustment. For derivation of factors
for adjustment, see Family Food Plans and Food Costs, HERR No. 20.
~ Man and woman, 20-35 years; children l-3 and 3-6 years.
5/ Man and woman, 20-35 years; child 6-9 and boy 9-12 years. £/ Costs given are for individuals in 4-person families. For those in other
size families, suggested adjustments are: 1-person, add 20%; 2-person, add
lO%; 3-person, add 5%; 5-person, subtract 5%; 6-or-more-person, subtract 10%.
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Selecting a plan.--Which of the three planB best fits an individual fami­ly's
situation? Probably the most impo~tant factors in determining this are
the family's income and the number of persons to be fed. Table 2 shows the
income at which an urban family probably can afford each plan if it spends the
same amount for food as the average survey family of the same size and
income. Y Table 3 shows the plan that is usually sui table for a family of
specified size and income, as indicated by expenditures of these survey fami­lies.
For example, a 4-person family with after-tax income of $91 000 could buy
the moderate-cost plan 1n March, 1966, if it spent the same amount for food as
the average four-person urban family at the same income level.
Figuring the cost of food for a family eating all meals at home.--Table 1
shows the cost of food in the low-cost, moderate-cost, and liberal plans for
four types of familiesJ for individuals of different ages; and for pregnant
women and nursing mothers. If the ~amily for which the cost of a week 1s food
at home is being calculated fits one of the four types, simply use the cost
given for such a family under the plan selected. For example, if it .is a
family of two (20 to 35 years old), the low-cost plan would cost $15.70. If
the family is of a different type than those given in the table, calculate its
food cost as follows:
•
•
List the costs given for each person eating at the family table,
then total these.
Adjust this total for family size if there are more or less than
four persons in the family. (This is done because large families
generaD.y have some economies that small families do not, such as
buying in quantity and less spoilage and other food losses~) To
adjust the total food cost when the family has--
1 person ------------
2 persons -----------
3 persons -----------
5 persons -----------
6 or more -----------
add 20 percent
add 10 percent
add 5 percent
subtract 5 percent
subtract 10 percent
Adjusting co~ts for meals away and extra meals at home.--The food costs in
table 1 are for the total week's food needs--21 meals plus snacks. Many fami­lies
have one or more members who regularly buy some meals away from home--at
work or school--and many serve meals to guests or hired help. The estimate of
the cost of food at home for these families should allow for all meals served
at home (or carried from home), but for only these.
To make a rough estimate of total cost of food at home for a week when
some meals are eaten out or extra persons are served, assume each meal costs
l/21--or a little less than 5 percent--of a person's total food cost. For
example, take a family of five in which the father regularly buys lunch at
workJ two children buy lunch at school each dayJ the whole family buys lunch
y The comparison is to data on retail value of food consumption by urban
families in consumer expenditure studies, when income and expenditures are
adjusted to current levels.
-15-
Table 2.--Income (after taxes) at which urban families probably
can afford food plans, March 1966 ~
Family size
Low-cost Moderate-cost Liberal
plan plan plan
2-person --------- $1,90.0 $3,900 $5,600
3-person --------- 3,500 6,4oo 8,400
4-person --------- 4,400 8,100 11,000
5-person --------- 5,500 9,200 13,100
~ Based on the estimated cost of food in the USDA plans, March 1966.
Assumes family food consumption is similar to that of the average urban family
of the same size and income in the Survey of Consumer Expenditures, 1960-61
(with income and expenditures adjusted to current levels). Allows for some
meals eaten away from home.
Table 3.--Food plans suitable for urban families of different sizes
and incomes, March 1966 ~
Income 2-person 3-person 4-person 5-person
(after tax) family family family family
$2,000 to Low-cost or Low-cost Low-cost (?_/) (1/)
$4,000 moderate-cost
$4,000 to Moderate-cost Low-cost Low-cost Low-cost (g/)
$6,000 or liberal
$6,000 to Liberal Low-cost or Low-cost Low-cost
$8,000 moderate-cost
$8,000 to Liberal Moderate-cost Moderate-cost Low-cost or
$10,000 or liberal moderate-cost
$10,000 Liberal Liberal Moderate-cost Moderate-cost
and over or libe.ral or liberal
!/ See footnote 1, table 2.
g( These families can buy the low-cost plan only if they use the least
costly items from each food group.
~ It is unlikely that these families can afford even the low-cost plan.
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_at ·the shopping center on Saturday; and grandmother visits for the Sunday noon
and evening meals. The cost of the moderate-cost plan for this family for a
week would be computed as follows:
Meals at home Cost of food
No. Percent of 21 21 meals Meals at home
Man, 20-34 years ---- 15 71 percent--of-- $10.20 = $ 7.20
Woman, 20-34 years -- 20 95 percent--of-- 8.90 = 8.50
Boy, 13 years ------- 15 71 percent--of-- 10.30 = 7.30
Girl, 11 years ------ 15 71 percent--of-- 8.60 = 6.10
Boy, 5 years -------- 20 95 percent--of-- 6.20 = 5.90
Grandmother, 60 years 2 10 percent--of-- 7.50 = .80
Total
Five persons ---------------------- less 5 percent ------------
$35.80
1.80
$34.00
The $34.00 is roughly the amount it would cost this homemaker to give her
family foods in the moderate-cost plan for the meals they eat at home in a
week. It includes the amount she pays for all food bought for use at home-­;
from the milk delivery, the vegetable and fruit stand, the church bake sale,
and the supermarket. It does not include money spent at the supermarket for
nonfood items such as soap, paper goods, pet foods, clothing, cosmetics,
cigarettes, and alcoholic beverages. About one-fourth of the amount spent in
grocery stores goes for the nonfood items, so the cash register tape is not
usually a reliable record of food costs.
Warning: The family that spends as much for food as the costs of the
USDA food plans does not necessarily get a nutritionally adequate diet. Com­binations
of foods must be selected that lead to well-balanced meals. The USDA
food plans described in "Family Food Budgeting ••• for good meals and good nutri­tion"
(HG 94) will help the homemaker to choose foods that meet family needs
for the money she can afford. This publication has not been revised to include
1964 revisions of the USDA food plans, but it is still useful as a guide to
good food management. Single copies are available from the Office of Informa­tion,
USDA, Washington, D.C. 20250. (Use your Zip Code on all requests.)
-- Betty B. Peterkin
MEDICAL CARE PROGRAM FOR THE AGED BECOMES EFFECTIVE
On July 1 1966 the health insurance program for the aged, provided for
by the 1965 am~ndments to t he Social Security Act, goes into effect. This
includes two coordinated programs--a basic hospital insurance plan and a
voluntary supplemental medical insurance plan·
Hospital Insurance
Benefits of the hospital insurance program are available beginning July 1
to nearly all persons 65 years of age or over. Those excluded are Federal
employees who are under the Federal Employees Health Benefit Act of 1959, and
aliens who have been U.S. residents for less than 5 years. Four types of care
are provided for under the hospital insurance plan:
Hospitalization (inpatient).--Services in a hospital for up to 90 days in
each "spell of illness" are covered. The patient will pay the first $40 of
cost for the first 60 days and $10 a day for the 6lst through the 90th day.
The program will pay the balance. Services covered include ordinary nursing
care, drugs and supplies, and most other services customarily fUrnished by
hospitals. They do not include services of physicians (except interns and
residents in training), surgeons, and private nurses. For treatment in a
mental hospital the lifetime limit on coverage is 190 days.
Outpatient hospital diagnostic services.--The hospital insurance program
covers diagnostic services the aged person receives as a hospital outpatient.
The patient pays the first $20 of cost for such services received during a
20-day period, plus 20 percent of the rest of the bill. The program pays the
remainder.
Posthospital home health care services.--The program will pay for up to
100 home health care visits during the year after a patient is discharged from ·
the hospital following a stay of 3 days or more, if he i.s under the care of a
physician. The home care services included are those of visiting nurses,
physical therapists, and other health workers, but not the services of the
physician.
After January 1, 1967, home health care services will also be provided
for a year following discharge from an extended-care facility. (See follow­ing
item.)
Posthospital extended care.--Beginning January 11 1967, the hospital
insurance program will cover up to 100 days of care in an extended-care
facility--such as a nursing home with medical care facilities--following a
hospital stay of at least 3 days. The program will pay the entire cost of
the first 20 days of such care. After that the patient will pay $5 per day,
and the program will pay the rest.
Voluntary Supplementary Medical Insurance
Persons 65 and over who signed up for the voluntary medical insurance plan
by May 311 1966, are eligible for its benefits beginning July 1. They also
begin then to pay $3 a month for this insurance. If they are receiving monthly
social security checks the $3 will be deducted.
For services he receives under this voluntary insurance in a calendar
year, the patient will pay the first $50 and 20 percent of the balance of the
cost. The program will pay the other 80 percent. The services covered
include--
-18-
Physician's and surgeon's services--at home or in a doctor's
office, clinic, or hospital.
• Home health visits: Up to 100 visits under an approved plan in a
year, with no need for prior hospitalization. These are in addition
to the 100 visits provided for under hospital insurance (above).
• Other medical and health services, including X-ray and laboratory
tests; X-ray or radium treatments; surgical dressings, splints,
casts; certain ambulance services.J braces, artificial legs, arms,
and eyes; and rental of medical e~uipment such as iron lungs.
(The medical ins\U'ance program will not pay for such items as
dentures, eyeglasses, hearing aids, and orthopedic shoes.)
A person who was 65 years old before May 31, 1966, had to sign up for the
medical insurance plan by May 31 to begin coverage July 1. Those reaching 65
on or after May 31, 1966, are allowed 7 months to enroll, beginning 3 months
before their 65th birthday. However, coverage is delayed 1 to 3 months for
enrollment after the birthday month. If a person does not enroll when he is
first eligible he gets another chance. He can sign up during the last 3 months
of odd-numbered years (1967, 1969, 1971), if he does so within 3 years of the
end of his first eligibility period. Any u.s. resident 65 years old or over •
may enroll for the voluntary medical insurance.
For Further Details
Information about programs of medical ca!'e for the aged is available from
local Social Security offices. These will supply details about who is eligi­ble,
how to enroll, what benefits can be expected, and expense involved.
CONSUMER PRICES
Seasonally Adjusted Indexes Available
The Bureau of Labor Statistics added a new feature to the Consumer Price
Index beginning January 1966. Each month it now publishes seasonally adjusted
national indexes for certain groups and subgroups of goods and services that
have a significant pattern of seasonal price change. The seasonally adjusted
indexes are available for food (total and at home), fuel and utilities (total
and fuel oil and coal), apparel and upkeep ( t ot'3.1 and each subgroup), and
transportation (total and private ) . Both t he adjusted and the unadjusted
indexes appear in the Monthly Labor Review . The unadjusted index only is
given in Family Economics Review.
-19-
Price Indexes
Consumer Price Index for Urban Wage Earners and Clerical Workers
(including single workers)
(1957-59 = 100)
Group
All items ----------------------------­Food
--------------------------------
Food at home ---------------------­Food
away from home ---------------
Housing -----------------------------
Shelter ---------------------------
Rent ----------------------------
Homeownershi·p -------------------
Fuel and utilities ---------------­Fuel
oil and coal --------------­Gas
and electricity ------------­Household
fUrnishings and operation
Apparel and upkeep -----------------­Men's
and boys' ------------------­Women's
and girls' ----------------
Fbotwear --------------------------
Transportation ----------------------
Private --------------------------­Public
----------------------------
Health and recreation ---------------
Medical care ---------------------­Personal
care --------------------­Reading
and recreation -----------­Other
goods and services ----------
April
1965
109.3
107.3
105.5
116.8
108.2
110.1
108.8
110.8
107.2
105.4
107.7
103.1
106.3
106.6
102.5
112.0
111.0
109.5
121.3
115.4
121.6
110.7
115.9
110.3
Feb.
1966
111.6
113.1
111.8
120.8
109.4
112.1
109.8
113.3
106.5
109.0
108.2
103.8
107.6
108.6
103.1
116.2
111.1
109.6
122.0
117.1
124.5
110.8
115.9
113.6
March
1966
112.0
113.9
112.6
'121.2
109.6
112.3
109.9
113.5
106.6
108.9
108.2
lo4.o
lo8.2
109.0
103.9
116.9
111.4
109.9
122.1
117.6
125.3
111.0
116.6
113.8
Source: U.S. Department of Labor, Bureau of Labor Statistics.
Index of Prices Paid by Farmers for Family Living Items
(1957-59 = 100)
Item April Dec. Jan. Feb. March
1965 1965 1966 1966 1966
All items ----------------- 106 108 108 109 110
Food and tobacco -------- -- 111 -- -- 114
Clothing ---------------- -- 115 -- -- 115
Household operation ----- -- 110 -- -- 111
Household furnishings --- -- 96 -- -- 96
Building materials, house -- 102 -- -- 103
Autos and auto supplies - -- 104 -- -- 106
April
1966
112.5
114.0
112.7
121.6
110.3
113.0
110.1
114.3
108.3
108.5
108.3
lo4.4
108.7
109.6
104.2
118.1
112.0
110.5
122.1
118.1
125.8
111.6
116.8
114.3
April
1966
110
--
--
--
--
--
--
Source: U.S. Department of Agriculture, Statistical Reporting Service.
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