Family Economics Review [1972, Number 2]

              17,
3 Unit Pricing and Open Dating - Eileen F. Taylor
6 Federal Trade Commission Guide on Use of the Word Free
7 Enrichment Facts for the Consumer - Patricia M. Thomas
8 National Data Center for Food Composition
9 Characteristics of Persons of Spanish Origin
10 Household Food Spending Affects Diet Adequacy- Constance Ward
13 Pension Coverage Among Men and Women
16 Use of Bank Credit Cards Grows
16 The Cost of Tariffs to Consumers
PROPE.RTY OF THE
'_lkRARY
AUG J 1972
17
• UNIVE.t-<:::.11 Y Uf M.Jh 1 r • .,_,.,,,uLINA
Price Index and Median Sales Pr1ce for New Homes AT GREENSOORO
18 Some New USDA Publications 0447A
19 Cost of Food at Home
20 Consumer Prices
ARS 62-5
JUNE 1972
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 prepared primarily for home economics
agents and home economics specialists of the Cooperative Ex­tension
Service.
Consumer and Food Economics Research Division
Agricultural Research Service
U.S. Department of Agriculture
Fed~ral Center Building No. 1
Hyattsville, Md. 20782
UNIT PRICING AND OPEN DATING!/
Unit pricing. --While a few co-op organizations have offered some form of unit
pricing for years, only in the last two years has the practice become widespread.
According to the National Association of Food Chains, over 100 retail food chains now
have unit pricing systems. These companies represent a significant share of food
marketing, and their stores are located in major population areas. In most principal
cities, unit pricing is available to the shopper who wants it.
Several chain organizations tested one or more methods of unit pricing before
selecting one to introduce on :i large scale. Generally speaking, some type of shelf
tag is now in use by most companies. Many use computer-printed labels that stick
smoothly to the shelf edge. Others use more colorful machine-printed tags.
The primary purpose of unit pricing is to help shoppers find the best buy, at
least as far as the price factor is concerned. A survey of shoppers in New York stores
immediately after the city's dual pricing law took effect found that 70 percent of the
shoppers interviewed were aware of the system, 43 percent fully understood it, and
18 percent said they had used it. It could be most helpful to shoppers whose financial
resources are limited, but most of the studies done so far seem to indicate that there
is more use of unit pricing among shoppers at higher income or educational levels or
both. A study in six stores in Toledo, Ohio, however, indicated that while disadvantaged
groups are least likely to understand unit pricj ng, they may use it most when they under­stand
it.
While shoppers do not seem to be stampeding to stores that offer unit pricing,
or even making use of it regularly when it is available, its importance as a potential
shopping aid should not be underestimated. For most shoppers, price is only one factor
to be considered in a buying decision; for others, price may be the 'dominant factor.
For still others, the total cost of the item may be the only important factor--a 3 pound
can of coffee may be a better buy than a 1- or 2-pound can in terms of cost per pound-­but
the total cost may be too high for a limited budget to cover. But the fact that price
comparisons can be made is important. When the shopper has an option among sizes
and brands, she has the unit price available to assist in making a choice.
The ease with which customers can make price comparisons among brands or
sizes may depend somewhat on how products are grouped on the shelf. The computer­printed
labels now being used in many stores may make unit pricing a fairly simple
task from the store operator's viewpoint. From a customer's viewpoint, however,
reading it may not be so simple. A bright, bold lettered tag may make unit pricing
easier for consumers to use than the computer-printed labels. According to a spokes­man
for a company now testing different tags, time--not necessarily cost--is the big
problem with the more colorful tags. Price changes and new tags can be made rapidly
when they come directly from the company's computer. Substantial delays may be
encountered when an outside firm must receive price data, print tags, and return them
to the chain.
1/ Talk given by Eileen F. Taylor, Economic Research Service, USDA, at the 1972
N;tional Agricultural Outlook Conference, Washington, D.C., February 23, 1972.
3
JUNE 1972
4
It does cost a store something to· install and maintain unit pricing. Per store
estimatesrangefromnextto nothingtoover $2,000 a year. Infact, the costs probably
do vary. They may be offset to some extent by savings due to better inventory control.
Also, if consumers likehaving unit pricing, someofthe costmustbemeasured against
consumer satisfaction. A store that does not have access to a computer would find the
time, labor, and equipment cost of installing unit pricing prohibitive. Most of the
legislation introduced so far at both Federal and State levels has recognized this fact
and provided exemptions for smaller store operations.
Open dating. --The phrase open dating generally refers to any date on a packaged
food product that can be read and understood by the shopper. The date may be shown
alpha-numerically--FEB 23, or in numbers only--2-23, or 0223. It may or may not
include the year and if it does, 1972 may be designated only as a 2. The date may
represent any one of the following:
(1) Pack date--the date of manufacturing or processing or final packaging.
(2) Pull date--the last day a retail store may offer the food for sale. The date
is designed to allow the consumer a reasonable amount of time to store and use the
product at home, even if she bought it on the pull date.
(3) Quality assurance or freshness date--until the date shown, the product will
be of the same quality as when it left the processing plant.
(4) Expiration date--this generally means, "Do not use after date shown, " and
is the most difficult date of all to determine. Wit,h the possible exception of yeast and
yeast products, it is almost impossible to tell when a product will not live up to your
expectations.
The opposite of open dating is code dating. Most food packages are coded and
some of the codes are exercises in ingenuity. Letters, numbers, or symbols--or
combinations of all three--have been used to put information on food packages. Tech­niques
vary amongprocessors but many ofthe codes do include a production date, the
last day of sale, or suggested shelf life.
The USDA has been gathering information on the need for, and the economic
feasibility of, food-product dating. In the spring of 1971, shoppers were ·interviewed
at 18 stores of a Chicago food chain where open dates had been used for several months
on over 100 products. Generally, the alpha-numeric dating system was being used-­that
is, FEB 23--which represented the last day the store might sell the product, while
allowing for reasonable life at home. Introduction of open dating in these stores was
accompanied by newspaper ads and in-store posters explaining the meaning of the date.
In addition, code books were provided at the service desk of each store to give code
explanations for those products that were not open dated. ·
Slightly more than half of the 1, 700 shoppers contacted said they were aware
ofthe chain's open-dating program. Of the 429 shoppers interviewed in depth, about
two-thirds said that they had used the date information at least once. Five item groups
FAMILY ECONOMICS REVIEW
(bread, milk, refrigerated dough products, other dairy products, and eggs) accounted
for 70 percent of all uses of the open dates.
When shoppers were asked what the date told them about a product, their answers
varied widely. Only 20 percent correctly interpreted the date as the last day of sale.
Forty-five percent said the date represented some time in the past--for example, date
of manufacture, packaging, delivery, or display. Twenty-two percent said that the date
indicated the end of the product's usable life--a misinterpretation that could lead to a
lot of perfectly good food being wasted if consumers followed through on it. Perhaps
the most important group of answers came from 38 percent ofthe shoppers--they said
quite simply that the date tells· either how fresh an item is or just that it is fresh.
From the variety of answers given and the frequency of answers involving past
dates, obviously shoppers do not look carefully at the dates on the items they purchase.
The shoppers' lack of concern about the precise meaning of codes or dates was con­firmed
by their lack of interest in the code book. Only nine of the 429 women inter­viewed
in depth had ever used the code book.
If a shopper mentioned having used date information for ~ specific time, she
was asked specific questions about it. Only for refrigerated dough products was there
any substantial agreement among shoppers as to the meaning of the date. These pro­ducts,
unlike most of those included in the open-dating program, have been marked
with a readable date for years. For most items, the manufacturer has also included
some storage instructions and a statement that, for best results, the item should be
used before the date shown. Two-thirds of the shoppers who said that they had used
date information for refrigerated dough products said that the date represented the last
day the item should be used. This was the single most frequent answer given for any
product. As far as influencing their use of an item, many shoppers said that the date
had no influence at all.
The possibility of increased costs of doing business--increases that might be
passed on to consumers--has been a major objection to open dating. The USDA obtained
information on the cost of open dating by studying an experiment of a chain in Ohio.
Seven test stores and two control stores participated in the open-dating test. Both
pull and pack dates were used. Recordkeeping for open-dated items was initiated about:
a month before open dating was introduced and continued on a daily basis for another
8 weeks.
Preliminary analysis of the data from the four product groups--meat, produce,
dairy, and bakery--shows that the introduction of open dating did not increase the amount
of loss in the test stores. In fact, in all nine stores, product losses (as a percentage
of gross sales) declined during the 4-week pretest period and continued to decline when
open dating was introduced during the fifth week. Losses continued a downward trend
and did not return to pretest levels during the study. This downward trend was evident
not only in the'stores where open dating was introduced but also in the two where there
was· ·n.o open dating.
Some of the reduction in loss in all stores may have been due to more efficient
practices encouraged by the recordkeeping--a byproduct of the open-dating experiment.
What is important is that the introduction of open dating did not increase losses. In­stead
of costing the store money, the open-dat~ng experiment, and the recordkeeping
itnecessitated, decreased losses. Unlikeunit pricing, thereareno maintenance costs
5
JUNE 1972
to open dating. Unless customers buy selectively--and there is no evidence of that as
yet--only start-up or changeover costs are a factor. Readable dates simplify and
encourage good stock rotation and this in turn helps the store by minimizing markdowns
and product waste. Apparently, the company involved in the study is convinced that
open dating will be an asset to it. Since the end of the experiment, this company has
announced that open dates will be used on all its manufactured private label products.
Federal legislation requiring pull dates was introduced in the second session
of the 91st Congress, and more than 30 bills requiring some type of dating are pending
inState legislatures. Ifallofthesewere to be enacted--and admittedly, that is highly
unlikely--conflicting rules would be in effect, even in neighboring States.
From the consumer's viewpoint, having an open date on a product may be help­ful,
particularly for home storage and use; simply having a date, regardless of the type
used, may be an assurance of quality. As one industry spokesman commented, it is
one way oflettingtheshopperknow that the retailer or processor has nothing to hide.
FEDERAL TRADE COMl\tllSSION GUIDE ON USE OF THE WORD FREE
An FTC Guide on the word "free" went into effect December 16, . 1971. The
guide applies to all offers of free merchandise and services including such terms as
"buy 1 and get 1 free , " "2-for-1 sale, " "50% off with purchase of 2," "1-cent sale,"
and "gift" or ''bonus."
A free offer is based on a "regular price" for the article or service that must
be purchased to receive the free one. Regular price means the price that the seller
or advertiser has chargedfor the same quantity and quality and for the same service
in the local area during the last 30 days. A free offer would be improper for a pro­duct
or service for which the price or quantity is determined through bargaining.
All terms, conditions , and obligations connected with the free offer must be
clearly disclosed at the beginning of the offer and in close conjunction with it. In an
advertisement, afootnotedisclosing the conditions would not be considered adequate.
When notice of a free offer appears on the main panel of a package or label, the terms
may be given elsewhere on the package provided the customer is informed of the loca­tion
and no purchase is required to find out the terms of the offer. If a free offer is
not available in all areas covered by an advertisement, the advertisement must identify
those areas.
A single size of a product or a single kind of a service should not be advertised
with a free offer for more than 6 months of any 12-month period. In addition, such
offers are limited to three per year with a lapse of at least 30 days between such pro­motions.
In introductory offers, free offers are permitted only if the seller expects
to discontinue the offer after a limited time and to sell the product or service separately
at the same price at which it was promoted with the free offer.
6 FAMILY ECONOMICS REVIEW
ENRICHMENT FACTS FOR THE CONSUMER
Families are not doing as much of their own baking as they once did. Today,
less flour is being purchased and used in the home while more and more baked pro­ducts,
such as cookies and crackers, are being bought. More than 97 percent of all
U.S. families ar.e regular buyers of cookies and crackers and large quantities of these
products are bemg consumed by persons in all income levels. !I
Factors such as these have prompted the surveying of a limited sample of the
retail market's cookie and cracker products for enrichment. The ingredient list on
the labels of cookies and crackers (as well as a selected number of mixes , such as
cake, brownie, gingerbread, and fruit and nut bread) was checked to see if these pro­ducts
(1) were made with enriched flour, (2) had added vitamins and minerals , or (3)
were made with a whole grain flour or meal as the only flour or meal. Enriched flour
has the nutrients thiamin, riboflavin, niacin, and iron (calcium is optional) added to
the flour in levels found in the original whole grain before milling.
In August 1970 two large supermarkets in the Washington, D.C. , metropoli­tan
area were surveyed, and labels were checked for the enrichment of cookies and
crackers.
None of the 116 different kinds or brands or both of cookie items were made
with enriched flour (or had added vitamins and minerals) or were made with a whole
grain flour or meal as the only flour or meal. Of 45 different kinds or brands or both
of crackers, two kinds (4 percent) were made with enriched flour while only one (2
percent) was made with whole wheat flour as the only flour.
A similar survey conducted in December 1971 in five supermarkets, also in
the Washington, D. C., metropolitan area, showed a marked increase in the number
of cookie and cracker products made with enriched flour. Of 360 different kinds or
brands or both of cookies, 149 (41 percent) listed enriched flour. From the cracker
counter, 77 (58 percent) of the 132 different kinds or brands or both of cracker pro­ducts
were made with enriched flour. Another 5 percent claimed that the cracker
products were made with a whole grain flour as the only flour. The findings clearly
demonstrate how the enrichment of cookie and cracker products has zoomed in just a
year's period.
Enrichment has notbeen limited to cookie and cracker products. Based upon
previous findings, all cake mixes reported in the USDA's 1965 Household Food Con­sumption
Survey were classified as unenriched. In contrast, 49 (slightly less than
half) of the 101labels of different kinds or brands or both of cake mixes observed in
December 1971 in Washington, D.C. , showed enriched flour as an ingredient. Appro xi­mately
three-fourths of all the different ingredient clauses read on mixes , such as
brownie, gingerbread, and fruit and nut bread, listed enriched flour.
Two in three of the nationwide brands appeared to be using enriched flour in
such products as cookies, crackers, cake mixes, gingerbread mixes, and fruit and
nut bread mixes in December 1971.
1/ Obright, Russ, Cookie, Cracker Programs are Directed to Consumer and Environ­m~
ntal Activities, Candy and Snack Industry 136 (13): 26, 28, 48. December 1971.
7
JUNE 1972
Credit must be given to the Biscuit and Cracker Manufacturers' Association
that was responsible in October 1970 for launching a nationwide cookie and cracker
enrichment program. It recommended to the association's U.S. bakery members to
begin using enriched flour (or its equivalent in enrichment tablets) in all wheat-based
products. The association has reported currently that under its voluntary enrichment
program, "Over 90 percent of the industry's products are now being enriched, in­creasing
their nutritional value with substantial amounts of thiamin, riboflavin, niacin,
and iron. " (See reference in footnote 1. )
Nutritionally speaking, a product that is enriched is a better buy than the same
product not enriched because you get more nutrients per dollar in the enriched product.
Also, the consumption of enriched products rather than unenriched ones would be ex­pected
to have a favorable effect toward the improvement of dietary intakes.
Consumers should be informed on the latest enrichment trends and encouraged
to read the label--especially the ingredient clause--looking for the words "enriched
flour" or "made with a whole grain flour. "
--Patricia M. Thomas
NATIONAL DATA CENTER FOR FOOD COMPOSITION
USDA has announced plans for a nutrient data bank. The proposed National
Data Center for Food Composition, a product of industry-government cooperation,
will provide information for nutritional labeling programs. USDA's publication Com­position
of Foods,.!/ which gives the nutrient composition of more than 2, 500 food items,
will form the nucleus of the data bank. Information stored here will be expanded and
updated continually as new data become available. Food composition data will be
givenfor raw products, fresh or processed food available in consumer markets, and
food prepared for eating. The ultimate aim is to include food values by variety, breed
of plant, stage of maturity, growing season, and geographic location. Hopefully, the
nutrient information will form the beginning of a universal coding system that may be
used in evaluating food consumption for its nutritional quality .
8
.!/U.S. Dept. of Agriculture, Agricultural Research Service, Composition of Foods,
Agriculture Handbook No. 8, Revised December 1963.
FAMILY ECONOMICS REVIEW
CHARACTERISTICS OF PERSONS OF SPANISH ORIGIN
Population. --In the U.S. population in March 1971, about 9 million persons
(4. 4 percent of the population) were of Spanish origin. Of these, 5 million were of
Mexican origin and 1 1/2 million were of Puerto Rican origin. Families of Spanish
origin were generally larger and younger than those of the general population. About
72 percentoffamilies of Spanish origin, 61 percent of black families, and 55 percent
of all families had children under 18. Twenty percent of the families of Spanish origin
had four or more children compared with 17 percent of black families, and 9 percent
of all families. Because of the large number of children in the population of Spanish
origin, the median age of this group was lower (20. 3) than that for blacks (21. 3) or
for the population in general (2 7. 7).
Income. --The median family income in 1970 for families of Spanish origin was
lower ($7, 334) than the median income for all families($9, 867), but higher than that
forblackfamilies ($6, 279). Oneineveryfourpersons of Spanish origin was below the
low-income level in 1970.!/ compared with one in eight in the general population and
one in three in the black population. Persons of Spanish origin made up about 9 per­cent
of all persons classified as low income.
Employment. --Employment of men of Spanish origin by major occupation group
was similar to that of black men. · About 58 percent were employed in blue-collar occu­pations,
23 percent in white-collar occupations, and 5 percent as farmworkers. Both
groups were much less likely to be employed in white-collar occupations than men in
the general population.
Education. --Among persons 25 to 29 years old, high school graduation was
less common among persons of Spanish origin than among blacks or the general popu­lation--
48 percent of persons of Spanish origin had graduated from high school com­pared
with 58 percent of blacks and 77 percent of the total population.
l/ A measure of income needed to provide families differing in size, composition, and
place of residence, a minimum adequate level of living. The term low-income level
is identical with the term poverty level as previously used by the Bureau of the Census.
Source: u.s. DepartmentofCommerce, BureauoftheCerisus. Population Character­istics,
Series P-20, No. 224. October 1971.
JUNE 1972
9
HOUSEHOLD FOOD SPENDING AFFECTS DIET ADEQUACY
The amount of money allocated to food has an influence on the adequacy of
household diets. Among households studied in the Department's 1965-66 nationwide
survey of food consumption,.!/ differences in quantities of food consumed by the house­hold
and dietary adequacy provided by this food were related to variations in the money
value of food used at home in a week.
The value offood used at home includes the value of purchased food as well as
the retail value of food produced at home or received as gift or pay (including Feder­ally
donated food). The number of people eating from household supplies obviously
influences the adequacy of diets at each level of total value. Therefore, money value
per person--basedontherate of21 meals in a weekfrom home food supplies--is used
in this article.
TheaveragemoneyvalueoffoodusedathomebyU.S. households in the 1964-65
survey year was $28.70 or $8.80 perperson in a week. Seventy l'ercent of the house­holds
used food with a money value between $5 and $12 per person. Less than one­tenth
of the households used food worth less than $5 and one-fifth used food worth more
than $12.
Households using food at lower money value levels were larger and had lower
incomes than families using food at higher levels (see table). Almost a, third of the
meals served in households using food worth $3 to $5 went to children under 9 years
old. At each successively higher level, a smaller proportion of meals was served to
this age group and a larger proportion was served to adults. The differences in size
and composition of households at each money value level reflect in part the food cost
advantages associated with feeding more persons and with feeding young childr~n whose
food needs can be met at lower cost than those of adults.
Food use. --Largerquantitiesperpersonofalmostevery food group were used
at each successively higher money value level. The exceptions were the flour and
cereals group and dried vegetables and fruits.
The food dollar was divided differently by households at the various money value
levels. At each successively higher level, a smaller proportion of the dollar was allo­cated
to milk and milk products, fats and oils, flour and cereals, bakery products,
eggs , and sugar and sweets; a larger share went for meat, fresh fruit, and beverages.
The proportion going to poultry, fish, potatoes, fresh vegetables, soups and mixtures,
and nuts and miscellaneous foods showed little variation with money value level.
Nutrient levels and diet adequacy. --The food used at money value levels above
$5 per person, on the average, was sufficient to provide diets that met the Recommended
Dietary Allowances set in 1963 by theN ational Academy of Sciences-National Research
.!/ The money value levels developed from the 1965-66 survey would be higher today
because of rises in food costs and in incomes. More recent data are not available
however, and .the comparisons presented on consumption of fa,milies usjng food at re~
latively high and low money value provide background information useful to leaders
working with families.
10 FAMILY ECONOMICS REVIEW
C-j
~
M
~
co
-:]
1:.,:)
~
~
Meals served to household members by money value of food, 1965-66
Meals served to household Money value of food at home per person in a week
members, household size,
I
$3 .00- $5.00- $7.00- :9.00- $12.00- and income $4.99 $6.99 $8.99 11.99 $15 .99
--- - -- -- --
All meals served------(percent) l 100.0 100.0 100.0 100.0 100 .0
I
Meals served to :
Men
20-54 years-- ------ - ----- ~ 13.1 15.6 18.0 19.4 21.0
55 years and over-------- 5.1 6.2 7.5 9.3 10.6
Women
20-54 years--------------~ 17.6 19.0 22.0 24.4 26.1
55 years and over-------- 8.7 9.3 9.3 10.5 12.3
Boys 9-19 years-- ----------1 11.6 10.1 10.4 10.6 9.7
Girls 9-19 years----------- 1 12.3 10.6 10.6 9.4 9.3
Children under 9 years----- 31.6 29.0 21.9 16.4 10.9
Average household size-(persons) 4.30 3.88 3.45 2.99 2.59
Median income---------(dollars) 3,250 4,930 5,710 6,300 6,840
Note: Parts may not add to totals because of rounding,
Source: Household Food Consumption Survey, 1965-66.
$16 .00-
$19.99
100.0
21.3
13.5
28.9
14.4
9.6
6.4
6.0
2.16
7,270
QUAUn OF DIETS DIETS MEETING IDA* FOR 3 NUTRIENTS
8y Money Value ol Food Per Person in o Week, 1965-66 8y Money Value ol Food Per Person in o Week, 1965-66
DOLLARS GOOD DIETS* FAll DIETS• POOl DIETSO
5 TO 7 _ _;m tiiiT2.~jj!JI
Sf TO 12
7 TO 9
9 TO 12
12 TO 16 liD 0 ~~
N.ICINT Of All HOUSEHOlDS
0 20 40 60 80 100
.lfAO • t: COiflfl:lfOI:O 0/I' TAI:J' •lLI.O..t lfCI:J ( IH JI 1'01 f lfU TIIfiUJ.
A ) "J I:O.t r 01: 1 II!U T. IIrlf U , • ur ai:LOW l OA 1'01: I · f . U. l. MOUJinfOLOJ, IN S ..... PHaNT OF otnS MilliNG AUOWANQS
O "AO L UI flf Aif ) ;1 . ... 1'0 1 I TO 1 lfVfi: I I:NTS; lS lfOT JY ifOiff lfOUS •ITif I'I'UM C:I:. Alt ll lflo LifUTIUTIOM, $,u:COiflfl'11'01'0 0/I: Uit f ALL OW.t.lf Crf I lfU I. U. J . lfOUJ IIUIOI.IIJ, , ... . ...
Figure 1 Figure 2
Council for the minerals--calcium and iron; the vitamins--vitamin A value, thiamin,
riboflavin, and ascorbic acid; and for food energy and protein. Households at each
money value level were supplied larger amounts of these nutrients than the households
at the level just below. While diets at the $5 to $7 level furnished less food energy
than recommended, they met requirements for the other nutrients studied. House­holds
using food worth less than $5 per person had diets with average supplies of
nutrients below allowances for all nutrients except iron.
Averages, however, cannot summarize the household dietary situation ade­quately.
Even though nutrient averages were sufficient to meet recommended allow­ances
at most money value levels, diets of some individual households at each money
value level did not meet recommendations for one or more nutrients. Households at
higher money value levels were more likely to have good diets--diets meeting allow­ances.-,..
than those at lower money value levels, but high expenditure per person did
not always insure good diets. Twenty percent of the households using food worth as
much as $12 to $16 per person in a week had diets furnishing less than recommended
amounts of one or more nutrients. In fact, 4 percent of these were poor diets--diets
providing less than two-thirds of the allowances in at least one nutrient (fig. 1).
Diets were most often short in calcium, vitamin A value, and ascorbic acid.
At each successively higher money value level, however, more household diets met
the requirements for these nutrients (fig. 2). Households at the higher money value
levels used larger quantities of most foods including milk and milk products, vegetables,
and fruits that furnish substantial amounts of these nutrients .
--Constance Ward
12 FAMILY ECONOMICS REVIEW
PENSION COVERAGE AMONG MEN AND WOMEN
While the monthly social security retirement check is a basic source of income
for most retired workers, many persons in the work force today are also covered by
second pension plans, which they hope will provide additional income after retirement.
Unskilled and semiskilled workers in the construction and trade and service industries
with low earnings and with careers characterized by shorter job tenure (categories
that include many women) are less likely to have this additional coverage than skilled
workers with high pay, recent employment, and long tenure. Also, lower paid workers
are frequently entitled to only a minimum or a very low social security retirement
benefit, whilethemorehighly paid workers are eligible, generally, for higher social
security benefits. The lack of access of unskilled workers to a second pension after
retirement thus serves to widen the gap in retirement income among beneficiaries
today.
A survey by the Social Security Administration of persons newly entitled to
social security benefits during the 24 months before July 1970 indicates the extent of
pension coverage and pension receipt among workers with different job patterns and
between men and women.
Second Pension From Most Recent Job
About 35 percent of the 2. 3 million persons newly entitled to social security
benefits were either receiving or expecting to receive a second pension from their
mostrecent job. For more than two-thirds ofthese beneficiaries the second pension
was from private industry. The remaining one-third were receiving or expecting to
receive a public pension--usuallyfrom a State or local government retirement system.
(Unlike many State and local government employees, Federal Government workers are
not covered by social security and are not included in these figures unless they had
acquired social security coverage on a previous job.)
More men than women were receiving or expecting to receive a second pension
(42 and 26 percent, respectively). About the same proportion of men and women had
pension rights if their most recent job was in public or government employment. How­ever,
among beneficiaries whose most recent job was in private employment, men were
about twice as likely as women to have pension rights.
Second Pension From Longest Job
Obtaining a second pension depends on being in a job where a pension plan is
in operation, on qualifying for coverage under such a plan, and then meeting eligibility
requirements for retirement without loss of pension coverage. Persons newly entitled
to receive social security benefits during the 18 months before January 1970 were asked
about pension coverage on their longest job. Not all reporting pension coverage were
expecting to receive this pension; one in 12 men and one in six women reporting pension
coverage said they would not receive a benefit.
Beneficiaries whose longest job was also the most recent job were more likely
to be covered by a second pension than those whose longest job ended sometime in the
JUNE 1972 13
past (40 and 22 percent, respectively). For two-thirds of the beneficiaries, the longest
job was this most recent job.
Duration oflongest job. --Pension coverage was concentrated among benefici­aries
with long years of service--partly because they were more likely to have been
employed in an industry or occupation with high rates of pension coverage and with
lowrate$ofturnover. Forty-sixpercentofthemen in private employment had worked
25 years or more on their longest job. More than two-thirds (70 percent) were covered
by pension plans. The percentage of women with service of 25 years or more was much
smaller. Ofthe17percentwhohadworkedthatlong, onlyhalf were covered by pension
plans. In government employment, however, 44 percent of the men and 2 9 percent of
the women had 25 years or more of service and most ofthem--90 percent--were covered
by pension plans.
Men and women who had less than 10 years of employment on their longest job
were not likely to be covered, but this fact was of little significance for men because
mostofthemhadlonger service. More than one-fifth of the women whose longest job
was in private employment, however, had between 5 and 10 years of service and only
7 percent were covered by a pension. Pension coverage was higher among women with
similar amounts of service in public employment--half of these women were covered.
Coverage by industry and occupation. --Beneficiaries whose longest job was in
an industry in which job changes were infrequent and turnover was low were likely to
have pension coverage. Coverage was highest in manufacturing, transportation and
public utilities, and finance; it was lowest in mining and construction, wholesale and
retail trade, and business and repair services. Few men or women in forestry,
fisheries, and agriculture were covered by pension plans. Coverage rates were much
higher for men than for women in most industries as the following table shows:
Industry of longest job
Forestry, fisheries, and agriculture---
Mining and construction---------------
Manufacturing----~-------------------
Transportation and public utilities------
Wholesale and retail trade-------------
Finance, insurance, and real estate----
Business and repair services----------
Percent of employees
with pension coverage
Men Women
5 1
40 21
64 31
77 60
29 15
62 38
32 15
Some of the industries where coverage ratios were highest did not employ large
numbers of workers. Men were more likely to be working in industries with high rates
of pension coverage while women workers were concentrated in those industries with
14 FAMILY ECONOMICS REVIEW
low rates of coverage. Two-fifths of the men whose longest job was in private industry
worked in manufacturing, but more than half of the women worked in the trade and
service industries--industries with low coverage. Transportation and public utilities,
with the highest rate of coverage for women, employed only 4 percent of the women.
Men and women in each occupational group were more likely to have pension
coverage if their longest job had been in public employment than in private industry.
Professional and technical workers (private and public) were more often covered by
pension plans than other workers. In private industry men who were laborers and
foremen and women who were service and household workers were least likely to have
pension coverage.
Percent of emElo~ees with Eension coverage
Occupation of longest job
Professional and technical workers-­Managers
and officials------------­Clerical
and sales workers--------­Craftsmen-----------------------
­Operatives-----------------------
­Service
and household workers-----­Laborers
and foremen--------------
Men
Private
65
52
50
58
55
36
31
!f Not shown because of small number reportlng.
Public
92
85
88
86
76
81
55
Women
Private Public
40 80
29 70
28 75
32 !I
26 53
7 49
15 !I
Annual earnings. --Beneficiaries with low annual earnings on their longest jobs
were less likely to have pension coverage. Only 14 percent of the men with earnings
under $4, 000 were covered by pension plans compared with more than three-fourths
of those with earnings of $8, 000 or more. Among men who were not covered by a pen­sion
on their longest job, 63 percent earned less than $6, 000. Women with pension
coverage had earnings that were two to three times as large as those without coverage-­$
5, 070 compared with $2, 520 for those whos1e job had been in private industry, and.
$6, 830 compared with $2,160 for those in government employment.
Sources: Bixby, Lenore E. and Virginia Reno. Second Pensions Among Newly En-:
titled workers: Survey of New Beneficiaries; andKolodrubetz, Walter W., Character­istics
of workers with Pension Coverage on Longest Job: New Beneficiaries. Social
Security Bulletin. November 1971, pp. 3-28.
15
JUNE 1972
USE OF BANK CREDIT CARDS GROWS
Bank credit cards are being offered by more and more banks. Between Sep­tember
1967 and June 1971, the number of banks participating in card plans jumped
from 197 to 1, 514. During this same period, credit outstanding from bank credit
cards soared from $633 million to $3. 9 billion. The growth in use of bank credit
cards has come as consumers have accepted the cards as a "proper" and convenient
method of financing purchases.
In 1967, most cards were issued by the large banks--those with deposits of
$1 billion and over. Although these banks still account for the largest share of the
market, their proportion has declined as the smaller banks have entered the field.
In June 1971, the large banks accounted for about 44 percent of bank credit outstanding-­down
from about 64'percent in 1967.
Source: Mathis, Marylin G., BoominBankCreditCards, Business Review, Federal
Reserve Bank of Philadelphia. February 1972.
THE COST OF TARIFFS TO CONSUMERS
Tariffs account for about 7 percent of the wholesale value of goods imported
into this country. As a percentage of retail value, the average tariff may be less than
half as high--or about 3 percent. Tariffs on some items are much higher, however.
For example, in 1967, a rate of 42. 5 percent (on the wholesale value) was charged on
certain imported sweaters. Nearly 13. 5 million of these sweaters were .imported that
year. The average consumer generally is not aware of the cost of tariffs because the
tariff is paid by the importer and passed along to the consumer in the price of the good.
The consumer generally pays more for domestic goods also if there is a tariff that
limits the importation of comparable but cheaper foreign goods.
A recent ~tudy by the Federal Reserve Bank of Boston indicates that tariffs
weigh more heavily on spending by low-income families than on spending by those who
are better off. Families with the lowest incomes tend to spend a larger share of their
income for "goods" that move in international trade and that are subject to tariffs and
a smaller share for "services" that generally do not move in international trade. As
income and spending rise, a larger share is spent for services (such as education)
and a smaller share for goods. Also, tariff rates frequently decline as the quality of
the item rises. Since items of better quality are more often purchased by families
with higher incomes, the effect of the tariff is less of a burden on these families.
Source: Fieleke, NormanS., The CostofTariffs to Consumers, New England Eco­nomic
Review, Federal Reserve Bank of Boston. September/October 1971.
16 FAMILY ECONOMICS REVIEW
PRICE INDEX AND MEDIAN SALES PRICE FOR NEW HOMES
The price index for new one-family houses sold in the United States increased
by 23 percent between 1967 and 1971. The increase was the greatest in the Northeast
and smallest in the West as shown below:
Price index of new home;:;
Year United North- North South West
States · east Central
1967--------- 100 100 100 100 100
1968--------- 106 109 105 104 103
1969--------- 115 118 115 113 111
1970--------- 118 124 116 118 114
1971--------- 123 130 120 126 117
The regional indexes were issued for the first time in March 197.2 by the Bureau of
the Census as part of its Price Index of New One-Family Houses Sold. The new in­dexes
will be issued annually and will supplement the U.S. index issued annually and
quarterly.
The median price of new one-family homes in the United States was $2 5, 200 in
1971 compared with $22, 700 in 1967, or 11 percent higher. The increase in median
price was highest in the Northeast and lowest i~ the West.
Median sales price of new homes sold during year
Year United North- North South West
States
Dol.
1967-------- 22, 700
1968-------- :24,700
1969-------- 25,600
1970-------- 23,400
1971!1------ 25,200
!/ Preliminary
east
Dol.
25,400
27,700
31,600
30,300
31,000
Central
Dol.
25,10,0
27,400
27,600
24,400
27, 300
Dol. Dol.
19,400 24,100
21,500 25, 100
22,800 25,300
20,300 24,000
22,500 25,500
Movements in the price index may differ greatly from changes in the median
sales price of new homes. For example, the U.S. price index for new one-family
homes rose by 2. 6 percent between 1969 and 1970, while the median sales price de­clined
by 8. 6 percent. The price index measures changes in the sales prices of houses
17
JUNE 1972
with constant characteristics; houses with the same characteristics cost more in 1970
than in 1969. The median sales price, however, reflects the number of houses sold
at each price. The decline in the median sales price between 1969 and 1970 was the
result of increased sales of smaller, less expensive homes in 1970. That year, 35
percent of all new one-family homes sold for under $20, 000 compared with the 26 per­cent
sold in that price range in 1969. A shift to larger, more expensive homes in 1971
caused a rise in the median sales price for that year.
Sources: U.S. Department of Commerce, Bureau of the Census, News, March 23,
1972; Construction Reports, New One-Family Homes Sold and for Sale, C25-71-12 ,
p. 21.
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 U.S. Department of
Agriculture, Washington, D.C. 202 50. Please address your request to the office
indicated.
From the Office of Information:
TREATING FARMSTEAD AND RURAL HOME WATER SYSTEMS. .FB 2248.
MILK IN FAMILY MEALS: A GUIDE FOR CONSUMERS. HG 127. Revised.
COOKING FOR SMALL GROUPS. HG 197.
From Information Division, Agricultural Marketing Service:
STANDARDS FOR MEAT AND POULTRY--A CONSUMER REFERENCE LIST.
(Also available in Spanish)
From Information Division, Office of Management Services:
18
IMPACT OF THE EXPANDED FOOD AND NUTRITION EDUCATION PROGRAM
ON LOW-INCOME FAMILIES: AN IN DEPTH ANALYSIS. AER 220.
FAMILY ECONOMICS REVIEW
COST OF FOOD AT HOME
Cost of food at home estimated for food plans at three
cost levels, March 1972, U.S. average ~
Cost for l week Cost for l 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 to 35 years 1/ ---- 19.40 24.60 30.50 83.70 107.00 131.80
55 to 75 years ]/ ---- 15.80 20.60 24.80 68.50 89.30 107.70
Family of 4:
Preschool children ~ 28.10 35.70 43.70 121.40 155.20 189.30
School children 2/ --- 32.60 41.70 51.40 140.90 180.90 222.80
INDIVIDUALS §./
Children, under I year - 3.70 4.70 5.30 16.10 20.40 22.80
l to 3 years --------- 4.80 6.00 7.20 20.70 26.10 31.30
3 to 6 years --------- 5.70 7.30 8.80 24.60 31.80 38.20
6 to 9 years --------- 6.90 8.90 ll.lO 29.90 38.50 48.30
Girls, 9 to 12 years --- 7.90 10.20 12.00 34.10 44.20 52.00
12 to 15 years ------- 8.70 11.30 13.70 37.50 49.00 59.60
15 to 20 years ------- 8.90 11.20 13.40 38.40 48.70 58.10
Boys, 9 to 12 years ---- 8.10 10.40 12.60 34.90 45.10 54.70
12 to 15 years ------- 9.40 12.50 14.90 40.80 54.00 64.50
15 to 20 years ------- 10.90 13.90 16.80 47.20 60.10 72.80
Women, 20 to 35 years -- 8.20 10.40 12.60 35.30 45.20 54.60
35 to 55 years ------- 7.80 10.00 12.10 33.90 43.50 52.60
55 to 75 years ------- 6.60 8.60 10.30 28.70 37.40 44.80
75 years and over ---- 6.00 7.70 9.40 26.00 33.20 4o.8o
Pregnant ------------- 9.70 12.20 14.40 42.00 52.70 62.50
Nursing -------------- 11.20 14.00 16.40 48.70 6o.6o 71.10
Men, 20 to 35 years ---- 9.40 12.00 15.10 40.80 52.10 65.20
35 to 55 years ------- 8.70 11.20 13.70 37.90 48.40 59.40
55 to 75 years ------- 7.80 10.10 12.20 33.60 43.80 53.10
75 years and over ---- 7.20 9.70 11.80 31.40 42.20 51.10
l/ Estimates computed from quantities in food plans published in Family Eco-nom1cs
Review, October 1964. Costs of the plans were f1rst estlffiated by us1ng
average price per pound of eacn 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.
~ Persons of the first age listed up to but not including the second age.
3/ 10 percent added for family size adjustment. 5/ 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: l-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 1972
19
CONSUMER PRICES
Consumer Price Index for Urban Wage Earners and Clerical Workers
(1967 :: 100)
Group
All items -------------------------------­Food
-----------------------------------
Food at home ------------------------­Food
away from home ------------------
Housing -------------------------------­Shelter
-----------------------------­Rent
-------------------------------
Homeownership ---------------------­Fuel
and utilities ------------------­Fuel
oil and coal -----------------­Gas
and electricity ---------------­Household
furnishings and operation --
Apparel and upkeep --------------------­Men's
and boys' ---------------------­Women's
and girls' -------------------
Footwear -----------------------------
Transportation -------------------------
Private -----------------------------­Public
-------------------------------
Health and recreation ------------------
Medical care ------------------------­Personal
care -----------------------­Reading
and recreation --------------­Other
goods and services -------------
April
1972
124.3
122.4
120.4
130.0
128.2
133.0
118.1
138.5
119.9
118.6
120.2
120.5
121.8
121.9
122.3
124.1
118.6
116.1
142.7
125.5
131.7
119.1
122.3
125.1
March
1972
124.0
122.4
120.6
129.4
127.9
132.7
117.7
138.2
119.6
118.7
119.7
120.1
121.3
120.3
122.5
123.5
118.4
115.9
142.3
125.0
131.4
118.7
121.7
124.6
Feb.
1972
123.8
122.2
120.5
128.9
127.6
132.5
117.5
138.0
119.3
118.7
119.4
119.6
120.7
119.7
121.7
122.7
118.3
115.7
143.5
124.7
131.0
118.4
121.5
124.3
Source: U.S. Department of Labor, Bureau of Labor Statistics.
Index of Prices Paid by Farmers for Family Living Items
(1967 :: 100)
Item May April March Feb. Jan.
1972 1972 1972 1972 1972
All items ------------------ 124 123 123 123 121
Food and tobacco --------- 119
Clothing ----------------- 131 -
Household operation ------ 120
Household furnishings ---- 117
Building materials, house 131
Dec.
1971
121
117
129
118
115
128
Source: U.S. Department of Agriculture, Statistical Reporting Service.
April
1971
120.2
117.8
116.1
124.8
122.5
126.5
114.4
130.9
114.1
117.3
113.9
117.0
119.1
120.3
118.7
121.1
118.1
116.2
136.4
121.2
127.5
116.3
118.4
119.7
May
1971
118
20 F Al\1IL Y ECON0l\1ICS REVIEW