3 The Nutritive Content of Type A School Lunches , ~ _
PRO _K I f .- TH c.
LIBR I'(
5 Use of Vitamin and Mineral Supplements
5 Saving by U.S. Households .J Ul , 1::;oJ L..
. . . . . y OF NORTH CAROLINA
· 7 Some Considerations m Fam1ly Cred1t ~fsfi,"lfsoREENSBORO
9 Issues in Income Maintenance Design
13 The Changing Income Distribution
17 Rural Change - Perspective for the 1970's
19 Budgets for Three Standards o~ Living for an Urban
Family of Four
21 "Truth-in-Lending" Goes into Effect
22 Consumer Education Bibliography Available
22 Some New USDA Pub1.ications
23 Cost of Food at Home
24 Consumer Prices
ARS 62-5
June 1969
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.
f THE NUTRITIVE CONTENT OF TYPE A SCHOOL LUNCHES
Scho.ol~ taking ?art in. the National School Lunch Program use the Type A lunch
patter~ to aid m pla~mg the1r menus. The nutritional goal of this pattern is to provide
one-th1rd of t~e dally R~commended Dietary Allowances (RDA's) set by the National
Acad.emyof SC1ences-Natwnal Research Council. The National School Lunch Regulations
spec1fy that a Type A lunch shall contain, as a minimum:
1/2 pint of fluid whole milk, served as a beverage.
2 ounces (edible portion as served) of lean meat, poultry, fish; or 2 ounces
of cheese; or one egg; or 1/2 cup of cooked dry beans or peas; or 4 tablespoons
of peanut butter; or an equivalent of any combination of these
foods. To count in meeting the requirement, these foods must be served
in a main dish or a main dish and one other menu item.
3/4 cup of two or more vegetables or fruits or both. A serving ( 1/4 cup
or more) of full-strength vegetable or fruit juice may be counted to meet
not more than 1/4 cup of this requirement.
1 slice ofwhole-grain or enriched bread; or a serving of other bread such
as cornbread, biscuits, rolls, muffins, made of whole-grain or enriched
meal or flour.
2 teaspoons of butter or fortified margarine.
These kinds and amounts of foods are based on the RDA's for 10- to 12-year-old
children. Smaller quantities of the protein-rich foods, vegetables and fruits, and butter
or margarine may be served to younger children, based on the lesser food needs of these
children. Larger quantities of the foods specified in the pattern are suggested for boys
and girls in junior arid senior high schools to meet their greater nutritional needs. It is
recommended, but not required, that lunches include a Vitamin C food and several foods
for iron each day, and a Vitamin A food twice a week. Other foods may be used as needed
to satisfy appetites and round out the meal.
The study reported here was designed by the Consumer and Food Economics Research
Division of the Agricultural Research Service to obtain information regarding the
nutritive content of Type A lunches as served to sixth graders. The School Lunch Division
of the Consumer and Marketing Service and 19 State school lunch agencies cooperated
in the study. The purpose was to test the interpretation by the schools of the Type A
pattern rather than to determine actual nutrient intakes of the children. Therefore, data
were obtained on the basic lunches as served, not as eaten. No information was obtained
on second helpings, extra food offered, or plate waste.
During the autumn of 1966, lunches from four trays were collected on 5 consecutive
days in each of 300 schools. Because most sixth graders are in the age group whose
food needs form the basis for the Type A pattern, lunches were collected at the time sixth
graders were served. The twenty-lunch sample from each school was sent to a labora-tory,
and analyzed for nutrients.
Results showed that lunches, on the average, met or exceeded thenutritional goal
of one-third of the RDA for all nutrients except iron and magnesium (see table). They
tended to fall below the goal for food energy (calories). Lunches that were low in food
energy also tended to be low in one or more other nutrients. Extra servings of foods,
JUNE 1969 3
Nutritional goal (l/3 RDA !/) and nutrient content of Type A school lunches
served to sixth graders in 300 schools in the National School Lunch Program
Item
Food energy---------------cal.
Protein---------------------g.
Vitamin A-----------------I.U.
Niacin equivalents §/------mg.
Riboflavin-----------------mg.
Thiamine-------------------mg.
Vitamin B6-----------------mg.
Vitamin B12----------------mg.
Vitamin D-----------------I.U.
Calcium--------------------mg.
Iron-----------------------mg.
Magnesium------------------mg.
Phosphorus-----------------mg.
Calories from fat---------pet.
l/3 RDA y
790
16
1,500
5.3
0.43
o.4o
0.47
1.7
133
4oo
4.7
100
4oo
(l/)
Content of lunches
Minimum I Maximum J Average
456
20.4
380
6.2
0.45
0.12
0.23
l.l
0
323
1.3
61
338
27
1,149
47.0
10,300
21.5
1.69
0.80
0.76
51.5
370
908
17.9
152
848
54
735
29.8
2,100
11.8
0.76
0.44
0.46
2.7
180
455
4.2
93
518
39
1/ Average Recommended Dietary Allov~.nces (1968) of the National Academy of
Sciences-National Research Council (NAS-NRC) for boys and girls 10 to 12 years
of age. gj Includes niacin ~ouiv'3.lents provided by tryptophan.
1J No allowance set by NAS-NRC.
where available, could easily have brought the average level of food energy and of some
nutrients up to the goal.
The nutrient content of the lunches from the 300 schools varied considerably.
Samples from all schools were above the goal of one-third of the RDA for protein, riboflavin,
and niacin equivalents. Lunches from a number of schools were below the goal
for food energy and certain vitamins and minerals, particularly Vitamin A, Vitamin B6,
iron, and magnesium. Lunches from a number of schools failed to meet the goal for
Vitamin D. Since children can obtain VitaminD from the action of sunlighton their skin,
however, the significance of this finding is questionable.
The protein content of lunches was significantly related to the content of several
nutrients, including niacin, Vitamin B6, iron, and magnesium. This indicates that the
so-called pl·otein-rich foods in the Type A pattern also provide these nutrients.
No data were obtained on ascorbic acid (Vitamin C) in the lunches. The goal for
Vitamin C should not be as hard to reach now as formerly, because the recommended
allowance was considerably reduced in 1968.
An average of 39 percent of total calories in the lunches was supplied by fat. In
more than one-third of the schools, fat accounted for over 40 percent of the total calories.
No RDA's have yet been established for fat. However, levels of fat that account for less
than 40 percent of total calories probably are more desirable than levels accounting for
more than 40 percent.
The information from this study will provide part of the basis for the continuing
review of the School Lunch Program by the Agricultural Research Service.
--Percilla C. Koons and Elizabeth W. Murphy
4 FAMILY ECONOMICS REVIEW
USE OF VITAMIN AND MINERAL SUPPLEMENTS
In the U.S. Department of Agriculture's food consumption survey in spring 1965,
information was obtained about the vitamin and mineral supplements individuals used as
well as the foods they ate. The interviewers asked, "Did (name of family member) take
any vitamin or mineral pills, capsules, oil, or other supplements yesterday?" They did
not ask about the kinds and amounts of supplements used.
The findings showed that vitamin and mineral supplements were used by relatively
more young children and elderly pers~ms than by other age groups. For example--
More than one-half (55 percent) of the infants under one year of age received
supplements during the 24-hour period;
About 40 percent of the children between 1 and 2 years old had supplements.
The proportion using them declined to 25 percent among children aged 6 to 8, 14 percent
among 12-to-14-year olds, and 12 percent among boys and girls of 15 to 17 years.
Among adults, those 75 years old and over were most likely to use supplements.
About 34 percent of this age group used them compared with 18 to 20 percentof
the women and 12 to 14 percent of the men in age groups 20 to 54 years.
Use of vitamin and mineral supplements also varied among income groups, generally
increasing as income rose. For example, about 38 percent of the infants in families
with incomes under $3,000 received vitamin and mineral supplements and 66 percent
in families with incomes over $5, 000. Of the young women 18 and 19 years old in these
same income groups, 3 and 22 percent, respectively, used supplements.
--Alexandria Spanias
Source: U.S. Department of Agriculture, Consumer and Food Economics Research Division.
Food Intake and Nutritive Value of Diets of Men, Women, and Children in the
United States, Spring 1965. U.S. Dept. Agr. ARS 62-18, 97 pp. 1969.
SAVING BY U.S. HOUSEHOLDS
u.s. households save by adding to their financial assets and to their investment
in homes and consumer durable goods. At the same time, they may take on new debts
and their homes and durables depreciate in value. Their net saving (additions minus
depreciation) in 1968 averaged $909 per household, of which 45 percent was in financial
assets, 24 percent in homes, and 31 percent in durables. This amount, $909, was 119
percent higher than the net saving of households in 1960 in current dollars and 86 percent
higher in constant dollars.
Financial Assets
U . S . h ouseh o.l ds added an average of $982 to their financial assets in 1968 (s. ee
table). This amount included an increase of $647 in savings accounts, ~er:nand depos1t~,
and currency; $333 m· pens1· on fund and ·l ife insurance reserves; $94 m mves.t ments m
secun·t 1· es; and a d ec 1m· e of $92 1·n other assets · In 1968, also, hous. eholds m. creased
their liabilities by an average of $573. Of this amount, $252 was an mcrease m mort-
JUNE 1969 5
gage debt on homes; $182 was an increase in consumer debts such as installment debts,
charge accounts, and single-payment loans; and $139 was an increase in other debts.
The net increase in financial assets in 1968--after deducting :Liabilities--averaged
$409 per household. This figure was low compared with the 1967 gain of $539, chiefly
because of smaller additions to savings accounts and larger additions to mortgage and consumer
debts. However, the annual net gain washigherin 1968 than earlier in the 1960's.
At the end of 1967, total financial assets averaged about $26,800 and liabilities
$6,400 per household. The market value of corporate stocks was a large part of total
assets. Comparable figures are not yet available for the end of 1968.
Other Assets
Consumer durables. --Purchases of consumer durables --automobiles, appliances,
and furniture--averaged $1, 366 per household in 1968. The net increase in the value of
Average change in net saving and components per household~ selected years
Item
Total net saving (financial assets~
durables, and homes) ---------------
FinanciaJ
Financial assets, total -------------Saving
and demand deposits, currency
Pension fund and life insurance
reserves gj ---------------------Investments
in securities 1/ -------
Other ~ ---------------------------
Liabilities~ total ------------------Mortgages
on family homes 5/ -------
Consumer debt ------------~---------
Other §/ ---------------------------
Net financial assets (assets less
liabilities) -----------------------
Consumer durables
Purchases
Depreciation on durables ------------Net
(purchases less depreciation)
Homes 2/
Purc~ses of new homes and additions -
Depreciation on homes ---------------Net
(purchases less depreciation) ----
Dol. Dol. Dol.
415 574
386 596
218 477
214 229
23 -31
-69 -79
341 375
212 236
85 101
44 38
45 221
703
766
541
277
57
-109
487
286
143
58
279
905 1,057
784 857
121 200
373 342
100 llO
273 232
345
121
224
Dol. Dol.
809
737
363
310
181
-117
377
205
119
53
360
322
129
193
922
762
325
-68
-97
383
177
75
131
539
1,235
1_,031
2o4
282
133
149
1968 y
Dol.
909
982
647
333
94
-92
573
252
182
139
409
1,366
1,086
280
356
136
220
1/ Preliminary.
gf U.S. Government life insuranceJ Government employee and railroad retirement
funds, and private programs. Excludes Old Age Survivors and Disability Insurance.
3/ Government and corporate securities, investments in mortgages.
~ Investment in own business and partnerships, and statistical discrepancy.
5/ 1- to 4-family houses. £/ Other mortgages, other bank loans, and statistical discrepancy.
6 FAMILY ECONOMICS REVIEW
durables owned, after allowing for depreciation, averaged $280--the highest of any year
in the 1960's.
Homes. --Purchases of new homes and additions to existing homes in 1968 averaged
$356 per household and depreciation on homes averaged $136. The net increase in
this form of saving for all U.S. households--including both owners and renters--averaged
$220. For homeowners alone, purchases of new homes and additions averaged $555
and depreciation $212, leaving a net increase of $343. Average savings in homes are
small mainly because relatively few new homes are bought and few additions are made to
existing homes in a year.
Home purchases in 196~ were considerably higher than in 1967. In general, home
purchases declined between 1960 and 196 7, mainly due to a drop in home construction because
of high interest rates and scarcity of mortgage mo~ey.
--Lucie G. Krassa
Sources: Computed from data published by the Board of Governors of the Federal Reserve
System in Flow of Funds Accounts, 1945-1967, Feb. 1968; Flow of Funds, Seasonally
Adjusted, 4th Quarter, 1968, Feb. 1969: and Federal Reserve Bulletin, Feb. 1969;
and data from the U. S. Department of Commerce.
SOME CONSIDERATIONS IN FAMILY CREDIT DECISIONS
No simple formula has been devised that families can use to determine how much
debt they can safely carry or what percentage of income they can safely commit to installment
payments. Because families differ so much in their needs, wants, prospects,
and financial resources, such decisions must be made on an individual basis. Basically,
sound decisions to use credit must take into account the relationship between the family's
income and expenditures for living. Another consideration is how well the family is prepared
for hazards that may reduce income or increase expenses. For example, a family
may want to consider whether its liquid and investment assets are enough to maintain its
levelof living and make debt payments for the averagetime the breadwinner might be out
of work if he became unemployed.
Figures 1 to 4 show the financial characteristics in the early 1960's of average
families in four broad age groups roughly comparable to the stages of the faj-ily life
cycle. The information is based on surveys made by Government agencies . .!. Credit
commitments are discussed in relation to these financial characteristics ~Jd to average
periods of unemployment, as reported by the U.S. Department of Labor.-
1/ U.S. Departments of Agriculture and Labor. Consumer Expenditures and Income,
Total United States, Urban and Rural, 1960-61, Supplement 2 to U.S. Bur. Labor Statis.
Rpt. 237-93. 1966; and Projector, D. S., and Weiss, G. Survey of Financial Characteristics
of Consumers, Board of Governors of the Federal Reserve System. 1966.
2/ u.s. Department of Labor, Bureau of Labor Statistics. Employment and Earnings
and Monthly Report on the Labor Force, Jan. 1968, and unpublished data.
7
JUNE 1969
THE YOUNG FAMILY
Head under 35 years
Income
Family size: 3.7
DElfS· Penor~ol • Mortgage oncf lnweiiMel'lt g
ASSETS Lu~"'u:J • lnve""'•"' Q
ll. c~Cl •Dtf "O.l &UTO •"0 IUllo<fU •IJf TJ
soo•cr uso• ,.,o,.tor•hL 'ltu-•~r •o••o
Figure 1
THE GROWING FAMILY
Head 35 to 54 years
Income
Family size: 4.1
DElfS: Penor~ol • Morteo1• and lnve•t• e r~t ml
ASSETS: Liq~o~icf • ln•.,.,t. ... nt 8]
4 rxCLUOf J I'IOoof aura. '""0 auSiw£H HUH
s01.1•cr uso• .. ,.o,ror•• '- • rsu vr•ou o
Figure 2
Young families (head under 35 years) had expenditures averaging slightly
higher than income ($5,265 and $5,216, respectively), indicating the use of some savings
or credit during the year (fig. 1). In decisions about new debt, the family's first consideration
is whether they can make additional payments from current income. They
also need to consider the possibility that their expenses may increase as the family grows
in size and the needs and wants of the children increase. The average debt of these families
was $4, 246, of which three-fourths was home mortgage debt . Liquid and investment
assets averaged about $1, 660--enough to last about 15 weeks at their current level
of spending. For men under 35 years who were out of work, unemployment averaged
about 8weeks. Thus, these young families had some leeway for handling living expenses
and making payments on debt during unemployment. Their assets in homes, businesses,
and cars--averaging about $6,000--were not considered because they cannot be converted
easily to cash in an emergency.
Growing families (head 35 to 54 years old) had income averaging $6, 888, a
little higher than their $6,702 expenditure (fig. 2). Their debt averaged $5,344--higher
than that of the younger families. Liquid and investment assets of $4,576 were enough to
last for about 35 weeks at their current level of spending. Unemployed men in this age
group were out of work an average of 9 weeks. These families were prepared to handle
more debt if they could currently make payments out of income without reducing their
level of living.
Contracting families (head 55 to 64 years) were smaller and had higher incomes
and expenditures than young families (fig. 3). As the children leave home, the
pressure to assume debt declines. The debt of contracting families averaged $2, 833-only
about half of that of the younger families. Their liquid and investment assets-$
10, 325--were enough to cover their spending for 2 years. Men aged 55 to 64 who became
unemployed were out of work an average of 17 weeks. They were a little more
likely to become unemployed than were the younger men. In general, this age group is
more concerned with saving for retirement than with buying goods for which they must
assume new debts.
8 FAMILY ECONOMICS REVIEW
THE CONTRACTING FAMILY
Head 55 to 64 years
Income
Assetsl:J..
DEBTS: P•rsonol • Mortgog• ond '""•''"'•"' m
ASSET~ liq\ltd • Investment Q
A t.fCLUOU>'OJOf_ .AUTO,.AJ001U$1>1fH A1SfTS
SOI.IIICf USO.A .AHO ~fPfOULIIfU:II~fiiOUO
Figure 3
Family size: 2.6
THE RETIRED FAMILY
Head 65 years and over
Income
$3,910
$3,888
Debts
r:::::m::::m~ $1,499
OEITS: Penonol • Mot1goge ond lnY•tltunl ([:)
A55lT5: liq\lid • lr~v•tlfUrll [IT;)
A r.wCLUOft.,Oool . .aUrO, AHOIUSI>'lUHJffl
SOli•Cf UUia A>IO,(OU• L •Ufll~f 10 .. 0
Figure 4
I Family 1ize: 2.1
$14,783
Retired families (head 65 years and over) had relatively low incomes and expenditures
(fig. 4). Their liquid and investment assets averaged almost $15, 000. They
had a tendency to sell their homes and businesses, converting the assets into forms that
were more easily available for use. Average debt was low--$1, 500--and was owed
mostly on homes and other real estate. Working men aged 65 and over who became unemployed
were without work an average of 17 weeks. However, the heads of most of the
survey families in this age group were retired. They were more concerned with using
their assets for current living than for protection against unemployment.
Families in all four age groups had average liquid and investment assets more
than adequate to cover living expenses and make debt payments for an average period of
unemployment. However, since they were spending just about what they were earning,
a major consideration in making new credit commitments would be whether they could
handle more payments out of monthly income.
--Katherine D. Smythe
ISSUES IN INCOME MAINTENANCE DESIGN.!/
Much public attention is currently focused on mechanisms to eliminate poverty
and provide economic security. This paper deals with some of theproblems of designing
programs to provide income for those who are poor despite such existing programs as
social insurance, job training, employment, and social services.
Issues in Designing Income Maintenance Programs
Should programs be designed for specific groups of the yopulation? --All. exist~ng
Federal programs are designed for specific groups or categones of the populatwn, w1th
1/ Condensed from a talk by Robert Harris, Executive Director, President's CommiSsion
0 n Income Maintenance Programs, at the Agricultural Outlook Conference,
Washington, D. C., Feb. 1969.
JUNE 1969
9
such factors as age, physical condition, and employment status as well as need determining
eligibility. Using categories makes it possible to tailor programs to the special
needs of population groups and to avoid reducing incentives to work, since the programs
are designed to aid persons not in the labor force or temporarily unemployed.
Some arguments against designing programs for specific groups or categories of
the population are that ( 1) such programs make it difficult to ensure that all needy persons
who cannot work or find a job receive aid, (2) some groups are given considerably
more aid than others and the difference cannot be justified on the basis of objective need,
and ( 3) an incentive is created for some persons to become members of the population
category eligible for benefits. The pull of categories is not troublesome in programs for
the aged, blind, or disabled, since one cannot easily put oneself into these categories.
Such programs become suspect, however, when they make it possible for families with
female heads to receive benefits that may be higher than the earnings of intact families
that are ineligible for aid; or for unemployed men covered under a public program to be
better off financially than employed men. For example, some family breakup has been
alleged to result from men deserting their families so the families can qualify for Aid to
Families With Dependent Children ( AFDC). The problems of equity become more severe
and the pull of categories greater as program benefits are increased to approach adequacy.
Should a means test be used? -- Opponents of the use of a means test argue that
such a test is demeaning, since one must publicly declare oneself to be poor to receive
benefits. Popular acceptance of Social Security is often attributed to the lack of a means
test, and popular derogation of public assistance to the use of such a test. A woman eligible
for survivor's benefits under Social Security applies to the local Social Security
office and begins to receive monthly checks when her eligibility has been verified. A
woman applying for AFDC undergoes a study of her history, living arrangements, assets,
liabilities, and other income. She may also have to account for the way she spends her
assistance payments.
Some, therefore, argue that the demeaning aspect of public assistance is due
largely to the way it is administered, the low benefits, t:'le close supervision of recipients,
and the needs tests that often require virtual paupacy. Some of the objections to
means-tested programs could be overcome by using a simple, impersonal income test
and separating income support from social service functions.
The statement is often made that programs based on such characteristics as age
rather than a need test do not divide society into a "poor" receiving class and the rest of
the population. All persons in the same category--such as all children--are eligible for
benefits. However, programs providing payments on some basis other than need are
inefficient in getting money to the poor, for they cost more per dollar going to the poor
than need-tested programs, benefit some of the nonpoor, and may not benefit all of the
poor. The strongest case for a need -tested program is the cost-benefit ratio. Moreover,
if payments are set high enough to help the poor substantially, special mechanisms
may be needed to recoup benefits from the nonpoor and to finance benefits to the poor.
To design and finance programs where everyone is a net beneficiary or to conceal the
selectivity of benefits from those who must pay for them is impossible.
Should employables be aided ?--No Federal programs to supplement the earnings
of employed men with low wages have been developed, and programs for unemployed men
are not well developed. Yet a large part of the poverty population falls into these cate-
10 FAMILY ECONOMICS REVIEW
gories. In 1966, one-third of all persons in poor families were in families in which the
head worked all year.
Aiding employable men may impair incentives to work and has been avoided largely
because of this· Programs may be designed with built-in work incentive provisions, however,
ensuring that those who work will be better off than those who do not.
Much emphasis has been placed on employment and training programs, for it is
often assumed that persons who work will not be poor. Certainly finding jobs for employable
persons or finding better jobs at higher wages is a desirable goal. However,
training programs are often costly and i.Iivolve a long time lag, jobs are not now available
for all who want them, and ma~y jobs do not pay enough to keep families out of poverty.
At what level should incomes be supported ?--This is the most difficult question
in program design. One obvious problem in setting income-support levels at or above
the poverty line in a public program is cost. The higher the basic level the higher the
cost, since more people are eligible for support. Moreover, the higher the level of income
assured, the greater the problem of maintaining incentives to work. At its heart,
the question of levels is political. Technicians can develop P-stimates of the costs and
effects of any program, but a collective decision is required to make a social choice.
Specific Program Proposals
The basic objective of an income maintenance program might be stated as assuring
adequate incomes through transfer mechanisms that do not harm financial incentives
to work, do not demean recipients, and do not have socially disruptive effects. Many
programs with these objectives are being proposed. This paper deals with only a few of
these.
Two kinds of programs being discussed in addition to or as alternatives to social
insurance modifications are ( 1} those that would supplement incomes and thus have an
income test, and ( 2} those that would provide payments to people regardless of their
other income.
Income supplement programs. --One proposed program would guarantee a minimum
annual income for all. The Government would pay thedifferencebetween a family's
income and a socially defined minimum income. If the Federal Government administered
the program, welfare agencies would be relieved of providing cash payments except for
emergency aid. Reforming public assistance by setting a uniform standard for payment
levels, making men who work eligible for income supplements, and including unrelated
individuals would, in effect, provide a guaranteed annual income administered by State
and local agencies.
The latter program was essentially proposed by the Advisory Council on Public
Welfare in 1966. The plan as outlined is universal in coverage. If the guarantee level
is set at the poverty line, poverty is eliminated. One defect of this plan is that it would
make it unprofitable to work unless earnings exceeded the guarantee level. A work incentive
feature can be added, however, by reducing the guaranteed income payment by
something less than a dollar for each dollar earned, rather than dollar for dollar. This
type of plan is known as a negative income tax.
All negative income tax plans guarantee a certain income, then allow persons to
add earnings that are only partly taxed away. Most propose~ plans for negative inco~e
taxation cover the entire population, but plans may be des1gned to cover only certam
11
JUNE 1969
groups. The 1967 amendments to the Social Security Act, for example, converted the
AFDC program into a negative income tax plan for broken families, since only a part of
earnings are deducted from payments. A negative income tax plan for all families with
children has sometimes been proposed.
The universal negative income tax provides work incentives, is administered in
an impersonal manner, and--by tailoring benefits to family size and income--need not
make it profitable to become a broken family. Because of the work incentive feature,
however, payments are also made to the non poor if the guarantee level is set near the
poverty line. With a guarantee of $3,300 for a family of four and a 50-percent tax rate,
payments are made to families with incomes up to $6,600. If the guarantee level is lower,
poverty is not eliminated, although many poor people are helped. With a guarantee
level of one-half of the poverty line and a 50-percent tax rate, the program would help
all of the poor. A negative income tax program at a low level added to present programs
for specified groups would reduce the differentials between persons in these groups and
others. Incentives for families to separate would be lessened and all poor persons, including
those not in current program categories, would be aided.
Programs unrelated to need.--Programs can bedesigned to makepayments without
an income test of any sort. In general, such programs select some groupin the population--
for example, children under age 18--and the Government makes a flat payment
to all persons in that category, regardless of family income. If the program covers the
whole population, it is known as a social dividend.
A children's allowance program could eliminate poverty for most families with
children if payments were high. A universal social dividend could eliminate poverty
completely if set at the poverty level. In this type of program, no stigma or loss of dignity
is involved. No reduction in work incentives should result, since payments theoretically
are not affected by earnings. However, receiving poverty level payments would
give people the options of not working or of reducing their work effort. Family structure
might be enhanced, since poor fathers would find it easier to support their children.
Moreover, a woman without a husband would be more marriageable, since the new husband
would not have to worry about taking on the support of her children.
The basic problem with programs of this type is cost. To eliminate poverty for
families with children by means of a children's allowance would be quite costly, since
payments would go to rich and poor alike. Financing such a program would require taxing
the benefits away from the nonpoor and increasing taxes to pay for benefits to the
poor. Payments could be set at a considerably lower level--and require no special taxback
from the non poor-- but then payments would not be adequate for the poor and the
poor would still receive a relatively small part of total expenditures for the program.
Comparison of programs. --While the mechanisms for transferring funds to the
needy are different for negative tax and children's allowance-type programs, the programs
can be made the same in meeting income needs of the poor. The main difference
is that in negative tax programs an income deficiency is explicitly met, while in children's
allowance-type plans payments are made to all in the specified group, and if payments
are set at a level to substantially aid the poor, those with incomes above the stated
level pay back the benefit in taxes. Given the similarity of the final distribution of costs
and benefits under the two programs, the argument that one is more or less socially
divisive than the other loses much of its force.
12 FAMILY ECONOMICS REVIEW
THE CHANGING INCOME DISTRIBUTION Y
The average ·(median) income of U.S. families has grown steadily since World
War II. Median income in 1967 dollars grew at an annual rate of 2. 7 percent from 1947
to 1957 and 3. 1 percent since 1957. The rate of growth was somewhat higher for nonwhite
than for white families. As a result, median income of nonwhite families was 62
percent as large as that of white families in 196 7, compared with 54 percent in 1950. In
terms of absolute dollars, however, the income gap between the two groups has been
widening. Their median incomes (in 1967 dollars) differed by about $3,100 in 1967 compared
with $2,200 in 1950.
At a projected annual growth rate of 3 percent, median income in 1985 might be
about $13, 800 in 1967 dollars compared with $8, 000 in 1967 (table 1). About 44 percent
of the families would then have incomes over $15,000 and poverty as defined today would
be greatly reduced. The projected median income in 1985 for nonwhite families is $11,600
and the projected proportion of families with incomes under $3,000 is 8 percent. Although
incomes of white families would still be higher than those of nonwhites, they would not
have grown as fast. The median income for white families inl985 would be about 3 times
what it was in 1947 and the median for nonwhites about 5 times the 1947 level.
The share of total income received by the wealthiest 5 percent of the families
dropped from about 17 percent in 1960 to about 15 percent in 196 7, indicating some reduction
in income inequality (fig. 2). The share received by the poorest 20 percent has
Median Income of White families and Nonwhite families: 1947 to 1967
jln19670ollarsj
Figure 1
Percentage Share of Aggregate Income Received by Poorest fifth
and Richest 5 Percent of All families: 1947 to 1967
""
Figure 2
changed very little. Since the mid-1950's, it has been about 5 percent. The chart sh.ows
a slight upward trend, but next year it could go down .. If all of the poor could be raised
above the poverty line, the share of total income receiVed by the lowest 20 percent would
probably not go much over 6 percent.
Persons below the poverty level dropped from about 22 percent of the total population
in 1959 to 13 percent in 1967 (table 2). The proportion of nonwhite pers.ons bel.ow
th e pavert y lm. e d ropped f ro m 55 to 35 percent · Data indicate t. ha. t the . poverty lm$e , whfi ch
is adjusted for price changes but ~ot .for rising standards of hvmg, rises about 0.30 or
every $1 increase in average family mcome.
1/ c d d f om a talk by Herman P. Miller, Chief, Population Division, U.S. Burea-
u of tohne Cenensesu s,r at t h e Ag n.c ul tura·l Out·l ook Conference, Washington, D.C., Feb. 1969.
JUNE 1969
13
Income increases between 1959 and 1967 were greater in suburban areas than in
citi es. Media!l income rose 16 percent (from $6, 700 to $7, 800) in central cities and 22
percent (from $7, 700 to $9, 400) in suburban areas (table 3). Median income of central
cities as a percentage of median income of areas outside central cities declined.
Table l .- ~edian money income and di stribution by income of U.S., white, and nonwhit e
families , 1947, 1957, 1967, and 1985 (pr ojected ), i n 1967 dollars
Families and 1985
money income (pr ojected ) 1967 1957 1947
All u.s. famili es
Total number -----thousands --- 68, 282 49, 834 43,696 37, 237
Median income --- -dollars ----- 13, 800 7,974 5,889 4,531
Per cent Percent Percent Percent
All ----------------------- 100 100 l OO 100
Under $3, 000 ---------------- 6 13 20 27
$3, 000 to $4, 999 ------------ 6 13 19 30
$5, 000 to $6, 999 ------------ 8 16 24 21
$7, 000 to $9, 999 ------------ 12 24 22 14
$10, 000 to $14, 999 ---------- 25 22 11 )
$15, 000 and over ------------ 44 12 4 ) 9
White families
Total number -----thousands --- <iQ 44, 814 39, 676 34,120
Median income --- -dollars ----- l ,100 8, 274 6,130 4,720
Per cent Per cent Per cent Percent
All ----------------------- 100 100 100 100
Under $3, 000 ---------------- 4 11 18 24
$3, 000 to $4, 999 ------------ 6 12 19 30
$5, 000 to $6, 999 ------------ 7 16 25 22
$7, ooo to $9, 999 ------------ 12 25 23 14
$10, 000 to $14, 999 ----- - ---- 24 24 12 ) 10 $15, 000 and over ------------ 47 13 4 )
Nonwhite families
Total number -----thousands --- OJ ) 5, 020 43020 3, 117
Median income ----dollars ----- n , 6oo 5, 141 3, 278 2,418
Percent Percent Per cent Percent
All ----------------------- 100 100 100 ' 100
Under $3, 000 ---------------- 8 27 47 62
$3, 000 to $4, 999 --- - ------- - 9 22 24 22
$5, 000 to $6, 999 ------------ 10 18 16 8
$7, 000 to $9, 999 --- - ------ - - 16 17 9 5
$10, 000 to $14, 999 ---------- 21 12 3 · ~ 2 $151 000 and over ------------ 36 5 (§/)
~ Not available . §/ Less than 0.5.
14 FAMILY ECONOMICS REVIEW
Table 2.--Persons below the poverty level,~ 1959 to 1967
Number Year Percent
Total I White I Nonwhite Total I White
Millions Millions Millions
1959 ------- 38.9 28.2 10.7 22 18
1960 ------- 40.1 28.7 ll.4 22 18
1961 ------- 38.1 26.5 ll.6 21 17
1962 ------- 37.0 25.4 ll.6 20 16
1963 ------- 35.3 24.1 11.2 19 15
1964 ------- 34.3 23.4 10.9 18 14
1965 ------- 31.9 21.4 10.5 17 13
1966 ------- 29.7 20.1 9.6 15 12
1966 gj----- 28.8 19.5 9·3 15 12
1967 "Y----- 26.1 17.8 8.4 13 10
!( Reflects improved statistical procedures in processing income data.
gj Based on revised methodology.
I Nonwhite
55
55
55
54
51
49
46
41
40
35
Table 3.--Median income in 1967 and 1959 (in 1967 dollars) of families in metropolitan
areas, by race, and percentage increase, 1959 to 1967
Metropolitan area
and race
Median income
All metropolitan areas -------
White ---------------------Negro
----------------------
Central cities ---------------
White ---------------------Negro
----------------------
Areas of l,ooo,ooo or more ---
White ---------------------Negro
----------------------
Areas under 1,ooo,ooo --------
White ---------------------Negro
----------------------
Outside central cities -------
White ---------------------Negro
----------------------
Ratio of Negro to white
family income
All metropolitan areas ------Central
cities --------------Areas
of l,ooo,ooo or more --Areas
under 1,ooo,ooo -------Outside
central cities -------
JUNE 1969
1967
Dollars
8,700
9,000
5,700
7,800
8,300
5,600
9,100
8,500
5,800
8,200
8,100
5,300
9,4oo
9,500
5,900
Percent
0 .63
0.68
0.68
o.65
o.62
1959
Dollars
7,200
7,500
4,300
6,700
7,200
4,4oo
7,700
7,6oo
4,8oo
6,6oo
6,800
3,6oo
7,700
7,800
4,ooo
Percent
0.58
0.61
0.64
0.52
0.51
Increase,
1959 to 1967
Percent
21
20
31
16
16
28
18
12
20
24
19
48
22
22
47
15
In central cities, the median income of Negro families (the major part of the nonwhite
population) gained relatively more than that of white families -- 28 percent and 16
percent, respectively. In large cities such as New York and Chicago, median income
was up 20 percent for Negroes and 12 percent for white families. Thus, the income gap
narrowed somewhat even in the central cities.
The number of families with incomes of $10,000 or more has grown dramatically.
About one-fifth of theNegro families in metropolitan areas have incomes that high (table
4). The proportion of Negro families in these areas with incomes of $10,000 or more
has doubled since 1959.
Table 4.--Families in metropolitan areas with incomes of $10,000 and over in 1967 and
1959 (in 1967 dollars), by race
Metropolitan area $10,000 and over $15,000 and over
and race 1967 I 1959 1967 J 1959
Percent Percent Percent Percent
All metropolitan areas
Total ---------------------- 40 26 15 9
White -------------------- 42 28 16 9
Negro -------------------- 18 7 5 1
Central cities
Total ---------------------- 33 23 12 7
White -------------------- 37 27 13 9
Negro -------------------- 18 7 5 1
Areas of 1, ooo,ooo or more
Total ---------------------- 34 27 13 8
White -------------------- 39 30 15 10
Negro -------------------- 20 10 6 2
Areas under 1,ooo,ooo
Total ---------------------- 33 21 11 6
White -------------------- 35 23 12 7
Negro -------------------- 15 4 4 4
Outside central cities
Total ---------------------- 45 29 17 10
White -------------------- 46 30 18 10
Negro -------------------- 19 8 6 1
Working wiveshave contributed much to therising levelof familyincomes. About
37 percent of U.S. wives are in the labor force today, compared with 23 percent in March
1952. About one-half of the husband-wife families with incomes of $10,000 and over in
1967 had wives in the labor force, helping to bring the incomes to this level. In families
with incomes under $3,000, only 14 percent of the wives were in the labor force.
The proportion of wives in the labor force was highest ( 44 to 46 percent) in families
where the husband earned between $3, 000 and $7, 000, and lowest ( 17 percent) in those
where his earnings were $25, 000 and over. Working wives whose husbands had high
earnings contributed a smaller percentage of the family income than those whose husbands
earned smaller amounts.
16 FAlVITLY ECONOlVITCS REVIEW
RURAL CHANGE - PERSPECTIVE FOR THE 1970's ij
Some business analysts began the current decade by referring to it as the "soaring
sixties." In the aggregate, much of the promise was more than fulfilled. So far in
the 1960's the Gross National Product had real growth of about 50 percent, more than 10
million additional workers entered the labor force, and unemployment dropped to 3. 5
percent from 5. 5 percent. The effects of this expansion have special significance for
rural America. During the 1960's--
The rate of decline in the farm population continued through most of the decade,
with some apparent slowd()wn in 1967-68.
Loss of population by migration from rural-semirural areas slowed greatly.
It varied considerably among regions, however. Some 1, 000 counties, mostly rural,
declined in population because of outmigration.
Nearly 700 rural-semirural counties gained over 500 nonfarm jobs each. In
about 300 of these counties, jobs increased by 1,000 or more between 1962 and 1967. In
about 750 counties the number of jobs grew slowly, and in 268 counties declined.
Jobs for rural people increased more near the north-northeast industrial complexes
and in the South than elsewhere. Little or no growth occurred in most of the rural
counties of the Intermountain, Great Plains, Ozark, and Appalachian Regions.
In rural-semirural counties, growth in nonfarm employment just about offset
declines in farm employment. However, growth in nonfarm jobs and losses in farm jobs
were not necessarily in the same regions.
The Seventies
Agriculture.--In some respects, a continuation ofwhat has been evolving in agriculture
in the 1960's can be expected. Although the major impact of technological change
on labor needs has probably occurred, a decline of nearly one-third in the use of labor
is anticipated in the 1970's. The remaining single crop requiring large amounts of labor
--tobacco-- will likely undergo fairly complete mechanization. This will have serious
consequences for the rural population and institutions in about 300 counties of the Southeast,
for it may add large numbers of poorly qualified, immobile people to the region.
Mechanization of vegetable and fruit crops will proceed, also. We can look forward to
the elimination of most migratory labor.
Larger farm production units will evolve, for economies of scale have not yet
been fully realized. Needs for capital in agriculture will be an important factor in further
change, pressing toward economies of capital management rather than technological
adjustments. Computerization of management information introduces a new level of scale
in the farm production plant, moving it toward a size that challenges past and current
ideas of size efficiency. Probably the number of farms will not be more than one-half
to two-thirds of the current number by the end of the 1970's.
Agriculture in all its phases is now in the process of "industrialization. " It has
taken on such characteristics 0 f nonfarm industry as specialization, standardization of
1/ Condensed from a talk by John H. Southern, Economic Research Service, U.S. Depa;
tment of Agriculture, at the Agricultural Outlook Conference, Washington, D.C., Feb.
1969. (Retired, Feb. 1969.)
17
JUNE 1969
product, and separation of functions of ownership, financing, management, and labor.
Nearly all technological change is pressing in this direction. The 1970's will see a continuation
of this process.
Rural development.--The scope and direction of rural development are moredifficult
to examine and evaluate than the changes expected in agriculture. Economic development
is an area not yet well defined or documented. However, several reasonable
statements may be made about the next few years.
The dispersion of job growth has been favorable for several regions. Undoubtedly
this has occurred because of a rapidly growing economy, which serves to generate growth
in many areas. A national growth environment must exist if rural areas are to grow at
all. Growth of the total economy rather than decentralization has been the chief factor
in dispersed economic growth. The situation in the past few years, when growth in nonfarm
employment just about offset the decline in farm employment, is significant in essentially
rural counties.
If the rate of economic growth slows down, small cities and their rural manpower
reservoirs will probably be first to feel the impact. A shrinking economy would not be
likely to reach into small cities and towns with new investments, plants, and establishments.
Rural areas and their labor forces might be expected to have a declining share
of growth. If such a decline did not occur, it would signal a real change in industrial relocation
and decentralization.
Regional variations in rates of past growth and the reasons for growth in some
areas when others declined are important considerations in planning for future development.
Mechanized agricultural areas, coal mining, and forestry regions have lost population
rapidly. Nearness to metropolitan centers has generally slowed population loss
in rural areas. In California, Arizona, Florida, and the Gulf Coast region, rural areas
as well as towns and cities have grown rapidly. Where the economy offers job opportunities,
the rural population will remain stable or increase. In rural areas where a sound
economic base does not exist, small cities and adjacent areas might be revitalized by
attracting industry, creating recreational enterprises, establishing educational institutions,
training the labor supply, and providing cultural amenities to make the area more
attractive.
Past performance indicates that no one size of city is optimal for all purposes.
Growth has occurred in cities and towns varying in population from 10, 000 or less to
1,000,000. More important for potential growth than numbers of people will be: Diversified
economy; viable local government and other institutions; adequate housing; adequate
highways; and possibly proximity to larger centers ofpopulation. Other considerations
will be: Economies of scale in relation to other cities and towns in the region; .
opportunity for people at all levels of income and skill to form a community; and flexibility
in rate and direction of future growth. Towns and cities of many sizes and types
are needed to provide for growth of dispersed areas, to counter the massive piling up of
population in large metropolitan areas.
The climate for and concept of rural development are now more favorable than
before. A substantial knowledge and analytical base are being made available through
the colleges, the U.S. Department of Agriculture, other Government agencies, and many
private schools. Beginnings for better approaches to human and economic development
are available from regional development commissions and other public and private efforts.
18 FAMILY ECONOMICS REVIEW
Some Implications
Industrialization is creating new areas of concern for agriculture as an industry.
Past goals and objectives in research, education, and public policy need modification.
Treating farming as America's last "cottage industry" and therefore something to be preserved
must give way to concern about industrialization--how producers can adjust to it
and how the benefits of change can best be spread among the factors of productionc A
major concern must be labor returns to persons rather than to land or commodities.
Policies duriilg the 1970's probably will show much more concern about "who gets what"
in the industry of agriculture. ·
There is a definite implication of close interdependence among sectors in the
process of economic growth and development. Social issues may play a much greater
role. Social goals may require that policies cannot be used to drain large regions of
population and resources, piling them up in a few megalopolises. Public goals and objectives
for growth through regionalization can be realized in part when the expanding
public sector of the economy is used to bring growth and development to lagging regions
and rural areas.
BUDGETS FOR THREE STANDARDS OF LIVING FOR AN URBAN FAMILY OF FOUR
The Bureau of Labor Statistics (BLS) has prepared spring 1967 cost et;;timates
for its budget for a moderate standard of living for an urban fa;.nily of four. Y It has
also published two new budgets --one for a lower standard and the other for a higher
standard of living--for the same type of family. The family is made up of a 38-year-old
husband employed full time, a wife not employed outside the home, a boy 13, and a girl 8.
The husband is assumed to be an experienced worker, well-advanced in his trade or profession.
Average estimated cost for urban areas in spring 1967 was $5,915 for the lower,
$9, 076 for the moderate, and $13, 050 for the higher budget.
The BLS budgets reflect ways of livi..'1g and consumer choices in the 1960's. The
selection of goods and services was based, where possible, on standards of adequacy as
defined by scientists and experts and translated to reflect actual buying practices of families.
Where such standards were not available, the kinds, quantities, and qualities of
items were based on analyses of data from studies of consumption and spending. Each
budget assumes that maintenance of health, nurture of children, and participation in community
activities are desirable and necessary goals.
The manner of living represented by the lower budget differs from that in the
other two mainly in that the family lives in rental housing without air conditioning, performs
more services for itself, and uses more free recreation facilities. The higher
budget differs from the moderate one in that it reflects a higher rate of homeownership
and provides f 0 r a larger automobile allowance, more household appliances and equip-ment,
and more paid services.
1/ u.s. Department of Labor, Bureau of Labor Statistics. Three St~dard? of Living
fo~ an Urban Family of Four Persons, Spring 1967. Bur .. Labor Stabs. ~ul. 1570-5.
1969. For sale for $1.00 by Supt. of Doc., U.S. Govt. Prmt. Off., Washmgton, D. C.
20402.
JUNE 1969
19
Annual costs of budgets for 3 living standards for a 4-person family,!/ urban United States,
39 metropolitan areas, and nonmetropolitan areas in 4 regions, spr ing 1967
.Axea
Urban United States ---------Metropolitan
areas --------Nonmetropolitan
areas 11 ---
Northeast
Boston, Mass . ---------------Buffalo,
N.Y. ---------------Hartford,
Conn . -------------Lancaster,
Pa . ------------ - -New
York-Northeastern N.J . --Philadelphia,
Pa .-N.J . ------Pittsburgh,
Pa . -------------Portland,
Maine -------------Nonmetropolitan
areas 11------
North Central
Cedar Rapids, Iowa ----------Champaign-
Urbana, Ill . ------Chicago,
Ill .-Nor thwestern Ind .
Cincinnati, Ohio -Ky .-Ind . ---Cleveland,
Ohio ---------- ---- 1
Dayton, Ohio ----------------Detroit,
Mich . --------------Green
Bay, Wis . -------------Indianapolis,
Ind . ----------Kansas
City, Mo .-Kans . ------- ,
Milwaukee, Wis . -------------Minneapolis
-st . Paul 1 Minn . -- I
St . Louis, Mo .-Ill . ---- -----Wichita,
Kans . --------------Nonmetropolitan
areas 11 -----
South
Atlanta, Ga . --- --- - ------ - --- 1
Austin, Tex . --- - ------------Baltimore,
Md . --------------Baton
Rouge, La . ------------Dallas,
Tex . -----------------
Durham, N.C. -----------------
Houston, Tex . ---------------Nashville,
Tenn . ------------Orlando,
Fla . ---------------- 1
Washington, D . C . ~d .-Va .------Nonmetropolitan
areas 11 -----
West
Bakersfield, Calif . ------ ---Denver,
Colo . ---------------Honolulu,
Hawaii --- -- --- - -- - Los
Angeles -Long Beach, Calif .
San Diego, Calif . ---- - --- ---San
Francisco -Oakland, Calif .Seattle
-Everett, Wash . ------Nonmetropolitan
areas 11------
Low
budget
All
(renter s ) v
Dollars
5, 915
5, 994
5, 564
6, 251
6, o83
6, 422
5, 823
6, 021
5, 898
5, 841
5, 951
5, 703
6, 223
6, 257
6, lo4
5, 702
5, 915
5, 796
5, 873
5, 757
6,124
5, 957
6,104
6, 058
6, 002
5, 978
5,823
5, 597
5, 237
5, 820
5, 402
5, 607
5, 570
5, 542
5, 512
5, 419
6,133
5, 224
5, 779
5, 905
7, 246
6, 305
6, 002
6, 571
6, 520
6, 085
Moderate budget
All
Dollars
9, 076
9, 243
8, 322
9, 973
9, 624
9, 833
8, 960
9, 977
9, 079
8, 764
9, 195
8, 981
9, 358
9, 257
9, 334
8, 826
9, 262
8, 636
8, 981
8, 955
9, 232
8, 965
9, 544
9, 399
9,140
8, 907
8,5ll
8, 822
9, o8o
10, 902
9, 326
9, 209
9, 774
9, 550
8, 890
Home -
owners
Dollars
9, 273
9, 453
8,463
10, 322
9, 885
lO, o67
9, 126
10, 333
9, 321
8, 928
9, 405
9, 248
9, 529
9, 367
9, 567
9, 051
9, 580
8,743
9, 183
9, 201
9, 445
9, 107
9 ,842
9, 6o8
9, 340
9, 038
8, 654
8, 420
8, o41
8,743
8, 500
8, 417
8, 805
8, 4o8
8, 551
8, 329
9, 470
7,875
8, 983
9, 253
ll, llo
9, 449
9, 421
9, 902
9, 669
9, 027
Renters
Dollars
8, 485
8, 616
7,899
8, 925
8, 842
9, 132
8, 463
8, 9ll
8, 353
8, 273
8, 563
8,178
8, 847
8, 925
8, 636
8, 152
8, 3ll
8, 314
8, 374
8, 215
8, 593
8, 540
8, 650
8,772
8, 542
8, 514
8, o81
8, 053
7, 685
8, 512
7, 889
8, 130
8, 149
7, 979
7, 899
7, 922
8, 683
7, 514
All
Dollars
13, 050
13, 367
ll, 64o
14,568
13, 679
13, 814
12, 610
14, 868
13,131
12,551
12, 66o
12, 428
13, 307
13,199
13, 325
12, 283
12, 997
12, 392
12, 9ll
12, 944
13, lll
12,732
13, 636
13, 348
12, 813
12, 595
11, 982
11, 846
11, 299
12, 728
12, 375
12,157
12,431
ll, 897
12, 055
12, 024
13, 419
10, 909
12, 660
13, 0ll
16, 076
13, 645
13, 461
14, 079
13, 486
12, 438
High budget
Home -
owner s
Dollars
13, 139
13,449
ll, 754
14,791
13, 832
13, 953
12,708
14,987
13, 099
12, 668
12, 816
12, 621
13, 391
13, 278
13, 392
12, 433
13, 187
12, 4o8
12, 949
13, ll6
13, 286
12, 8o8
13, 812
13, 457
12, 924
12, 669
12,132
ll, 928
ll, 325
12, 733
12, 467
12, 082
12,561
ll, 954
12, ll8
12, 169
13, 495
10, 972
12,766
13, 018
16, 241
13, 639
13, 592
14,124
13, 568
12, 564
!( Employed husband 38 years of age, wife not employed outside the home, girl 8, and boy 13 .
gj All families assumed to be renters .
11 Places with population of 2, 500 to 501 000 .
Renters
Doll ars
12, 549
12, 897
10, 995
13, 301
12, 815
13, 029
12, 056
14, 201
13, 314
11, 889
ll,779
11, 341
12, 831
12,748
12, 938
11, 430
11, 923
12, 293
12, 698
ll, 968
12, 120
12, 301
12, 636
12, 728
12, 190
12,178
11,130
ll, 386
11, 150
12, 697
11, 857
12,577
11, 688
ll, 567
11, 699
ll, 207
12, 992
10, 551
12, 057
12, 973
15, 137
13, 683
12,714
13, 825
13, 022
11,723
20 FAMILY ECONOMICS REVIEW
BLS has estimated the average cost of each budget for urban United States, U.S.
metropolitan and nonmetropolitan areas, for 39 individual metropolitan areas, and for a
sample of nonmetropolitan areas in each of the four regions. It gives costs separately
for homeowners and renters at the two higher budget levels, but for renters only at the
lower level because renting is much more common among lower-income families. Total
budget costs for each of these groups at spring 196 7 prices are shown in the table on
page 20.
A detailed breakdown of the budget costs is given in the BLS report (see footnote
!/). Estimates are given for each budget level and geographic area for food, housing,
transportation, clothing, perso.p.al care, medical care, reading, recreation, education,
other family consumption, gifts and contributions, life insurance, social security and
disability payments, personal taxes, and occupational expense. The report also gives
details on quantities and qualities of items in each budget, intercity indexes of living
costs, and rough estimates of fall1968 costs for the family consumption part of the budgets.
BLS plans to reestimate the cost of the budgets each spring.
Budget costs for families differing in composition from the 4-person budget family
can be estimated by using a scale published in the BLS bulletin, Revised Equivalence
Scale for Estimating Equivalent Incomes or Budget Costs by Family Type. Y
The BLS budgets are not meant for use as patterns individual families should follow
in setting up their own spending plans. They have been prepared to fulfill the need
of social planners for objective, quantitative standards with which the incomes of families
and population groups can be compared. The budgets provide guides for social and
legislative programs dealing with wages, prices, credit, public assistance, and taxes.
They are also useful for measuring differences in living costs among cities and areas.
2/ U.S. Department of Labor, Bureau of Labor Statistics, Bul. 1570-2. 1968. For
sale for 35 cents by Supt. of Doc., U.S. Govt. Print. Off., Washington, D.C. 20402.
"TRUTH-IN-LENDING" GOES INTO EFFECT
The "truth-in-lending" part of the Consumer Protection Act of 1968 goes into effect
July 1, 1969. After that, creditors must disclose to consumers what they are paying
for most types of credit. The information must be given clearly and conspicuously
before the credit transaction is completed--for example, in the note, contract, or other
agreement the consumer signs when he makes a credit purchase or gets a loan.
Before the consumer signs up for a revolving charge account or credit card account
he must be told how the finance charge is to be figured; the finance charge as an
annu;l percentage rate; how long he has to pay a bill before a charge is imposed; the
minimum payment required; and additional charges he may be asked to pay. . .
For other types of credit, such as installme~t pu.rchases and.loan.s, mformahon
given the consumer must include the total amount bemg fmanced; an. Item.Ized account of
charges being made; the total finance charge in dollars (not required m the sale of a
home); the finance charge as an annual percentage rate (not required for certain small
1o ans ) ; th e numb er, amount , and due dates of the payments to be m. a.d e by the debto. r;
charges that will be added for late payment of installments; a description of any security
21
JUNE 1969
the creditor will hold; and the penalty for prepayment of the debt. A customer who has
signed his residence as security for a debt that is not for purchase of a home has the
right to cancel the transaction within 3 business days if he changes his mind.
The law provides for truth in advertising consumer credit, also. An advertiser
may not mention any one credit term unless he gives all terms, clearly and conspicuously.
This would eliminate ads with such promises as "No money down, all the time
you want to pay" but with no mention of what the cost will be.
The truth-in-lending law does not fix maximum or minimum charges or interest
rates for consumer credit. Nor does it cover credit transactions within States that request
and obtain exemption because their laws have the same requirements as the Federal
law and adequate provision for enforcement.
CONSUMER EDUCATION BIBLIOGRAPHY AVAILABLE
Consumer EducationBibliography is anewpublicationprepared for the President's
Committee on Consumer Interests that will be useful to teachers and others interested in
consumer affairs. It lists and gives a brief description of the contents of over 2, 000
books, booklets, articles, films, and other materials. Copies are a vail able for 6 5 cents
from the Supt. of Documents, U.S. Govt. Printing Office, Washington, D.C. 20402.
SOME NEW USDA PUBLICATIONS
(Please give your ZIP code in your return address when you order these.)
Single copies of the following 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:
FOOD INTAKE AND NUTRITIVE VALUE OF DIETS OF MEN, WOMEN, AND
CIITLDREN IN THE UNITED STATES, SPRING 1965--A PreliminaryReport.
ARS 62-18.
CHARTS OF THE CONSUMER AND FOOD ECONOMICS RESEARCH DIVISION.
ARS 62-20.
This 16-page catalog shows 142 charts prepared for use in research reports,
speeches, journal articles, Family Economics Review, and other releases. The charts
illustrate the findings from studies conducted by CFE and other Federal agencies on such
topics as family income and expenditures, food consumption, diet quality, homefreezer
management, housing, and consumer prices. Persons wishing to use the charts may buy
them as slides or photographic prints from the Office of Information of USDA.
Single copies of the following are available free from the Office of Information,
U.S. Department of Agriculture, Washington, D. C. 20250:
PORK IN FAMILY MEALS: A Guide for Consumers. HG No. 160.
APPLES IN APPEALING WAYS. HG No. 161.
22 FAMILY ECONOMICS REVIEW
COST OF FOOD AT HOME
. Cost of food at home estimated for food plans at three
cost levels, March 1969, U.S average 1/
Sex-age groups gj
Cost for l week Cost for l month
Low-cost Moderate- Liberal low -costl Moderate-J Liberal
plan cost plan plan plan cost plan plan
FAMILIES Dollars Dollars Dollars Dollars Dollars Dollars
Family of 2:
20 to 35 years 3/---- 17.00 21.80 26.60 55 to 75 years II---- 73.90 94.oo 115.50 l4.oo 18.20 21.70 6o.6o 78.40 94.30 Family of 4:
Preschool children 4/ 24.70 31.60 38.40 107.50 136.90 166.50 School children 2/-~- 28.80 36.90 45.10 124.80 159.40 195.60
INDIVIDUALS 6/
Children, under l year 3.30 4.20 4.70 14.50 18.20 20.40 l to 3 years -------- 4.20 5.30 6.40 18.40 23.20 27.70 3 to 6 years -------- 5.00 6.50 7.80 21.90 28.20 33.80
6 to 9 years -------- 6.10 7.90 9.80 26.60 34.10 42.50
Girls, 9 to 12 years -- 7.00 9.00 10.60 30.30 39.00 45.70
12 to 15 years ------ 7.70 10.00 12.10 33.40 43.20 52.20
15 to 20 years ------ 7.90 9.90 11.80 34.10 42.90 51.00
Boys, 9 to 12 years --- 7.20 9.20 11.10 31.00 39.80 48.10
12 to 15 years ------ 8.40 11.00 13.10 36.30 47.60 56.70
15 to 20 years ------ 9.60 12.20 14.80 41.70 52.90 63.90
Women, 20 to 35 years - 7.20 9.20 11.00 31.20 39.70 47.80
35 to 55 years ------ 6.90 8.80 10.60 29.90 38.20 46.00
55 to 75 years ------ 5.90 7.60 9.00 25.40 32.80 39.10
75 years and over --- 5.30 6.70 8.20 23.00 29.20 35.70
Pregnant ------------ 8.60 10.70 12.60 37.10 46.30 54.80
Nursing ------------- 9·90 12.30 14.40 43.10 53.40 62.60
Men, 20 to 35 years --- 8.30 10.60 13.20 36.00 45.80 57.20
35 to 55 years ------ 7.70 9.80 12.00 33.40 42.60 52.10
55 to 75 years ------ 6.80 8.90 10.70 29.70 38.50 46.60
75 years and over --- 6.40 8.60 10.30 27.70 37.10 44.80
~ Estimates computed from ~uantities 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 urban survey families at
3 income levels in 1965. These prices were adjusted to current levels by use
of Retail Food Prices by Cities, released by the Bureau of Labor Statistics.
2/ Persons of the first age listed up to but not including the second age.
j/ 10 percent added for family size adjustment. For derivation of factors
for adjustment, see Family Food Plans and Food Costs, USDA, HERR No. 20.
~ Man and woman 20 to 35 years; children l to 3 and 3 to 6 years.
5/ Man and woman; 20 to 35 years; child 6 to 9; and boy 9 to 12 years. £/ Costs given for persons in families of 4. For other size families, adjust
thus: 1-person, add 20 percent; 2-person, add 10 percent; 3-person, add 5 percent;
5-person, subtract 5 percent; 6-or-more-person, subtract 10 percent.
JUNE 1969 23
CONSUMER PRICES
Consumer Price Index for Urban Wage Earners and Clerical Workers
(including single workers)
(1957 -59 == 100)
April Feb. March
Group 1968 1969 1969
April
1969
All items ----------------------------- 119.9 124.6 125.6 126.4
Food -------------------------------
Food at home ----------------------
Food away from home ---------------
Housing -----------------------------
Shelter --------------------------- Rent ---------------------------- Homeowners hip -------------------
Fuel and utilities ----------------
Fuel oil and coal ---------------
Gas and electricity -------------
Household furnishings and operation
Apparel and upkeep -----------------Men's
and boys' ------------------Women's
and girls' ----------------
Footwear --------------------------
Transportation ---------------------- 1
Private --------------------------Public
----------------------------
Health and recreation --------------Medical
care ---------------------Personal
care ----------~---------Reading
and recreation -----------Other
goods and services ----------
118.3
115.1
134.4
117.5
121.3
114.4
124.0
110.0
114.0
109.5
112.2
118.4
119.2
114.5
130.4
119.0
116.8
137.2
128.8
143.5
119.0
124.9
122.5
121.9
118.1
140.7
123.3
128.9
ll7 .2
133.6
lll.8
116.9
110.2
115.8
123.9
125.3
ll9.3
136·.8
122.0
119.3
145.5
133-7
151.3
124.1
128.4
125.8
122.4
118.5
141.3
124.4
130.5
117 ·5
135·7
ll2.2
117.2
110.6
116.4
124.9
126.4
120.6
137.6
124.3
121.6
147.5
134.3
152.5
124.8
128.7
126.1
Source: U.S. Department of Labor, Bureau of Labor Statistics.
Index of Prices Paid by Farmers for Family Living Items
(1957-59 == 100)
May Dec. Jan. Feb. Mar. Apr.
Item 1968 1968 1969 1969 1969 1969
123.2
119.3
142.2
125.3
131.6
117.8
137.1
112.6
117.4
111.2
ll6.9
125.6
127.3
121.0
138.4
124.6
121.9
148.0
135.1
153.6
125.5
129.6
126.6
May
1969
All items ----------------- 117 119 120 120 122 122 123
Food and tobacco -------- - 120 - - 121 - -
Clothing ---------------- - 135 - - 137 - -
Household operation ----- - 118 - - 118 - -
Household furnishings --- - 103 - - 105 - -
Building materials, house - 119 - - 127 - -
Source: U.S. Department of .Agriculture, Statistical Reporting Service.
* U. S. GOVERNMENT PRINTING OFFICE: 1969-343-498/ARS-99
24 FAMILY ECONOMICS REVIEW
