Family Economics Review [1973, Number 2]

              For
HIGHLIGHTS /SUMMER 1973
WELFARE REFORM
NUTRITION LABELING
FAMILY FINANCIAL ASSETS
SELECTING A SAVINGS ACCOUNT
POTASSIUM IN COMMON FOODS
D447A
PROPERJV "'v'- 1.H,.... I I ..:.
LIBRARY
AUG 2 0 1973
UNIVERSITY OF I\4 CJk AT "' 1 H l-Mt{ULII'O~
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ARS 62-5
Consumer and Food Economics Institute
Agricultural Research Service
U.S. DEPARTMENT OF AGRICULTURE
FAMILY ECONOMICS REVIEW is a quarterly
report on research of the Consumer and Food
Economics Institute 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.
Editor: Katherine S. Tippett Assistant Editor: Marilyn Doss Ruffin
Consumer and Food Economics Institute
Agricultural Research Service
U.S. Department of Agriculture
Federal Center Building No.1
Hyattsville, Md. 20782
OUR NEW LOOK
With this issue, FAMILY ECONOMICS
REVIEW goes to an easy-to-read, two-column
format. Our printing schedule has changed too,
so that we may take advantage of more
efficient printing procedures. Issues will be
dated "Winter," "Spring," "Summer,"· and
"Fall" with approximate off-press dates of
early February, May, August, and November.
We will continue to use the most recent
information available at press time. This, of
course, will mean a few changes. For example,
quarterly dates for the Cost of Food at Home
will be October, January, April, and July;
regional costs, which will be given for January,
will appear in the Spring issue. Condensations
of talks given at the Annual Agricultural
Outlook Conference also will appear in the
Spring issue. The Fall issue will have the index
of articles for the year.
We continue to look for new ways to make
FAMILY ECONOMICS REVIEW more useful
to the leaders, teachers, and professional
workers who receive it. For example, a major
concern of many families today is rising
prices-what kind of information could we
provide that would make it easier for you to
help families and individuals cope with these
problems? We are always happy to hear from
our readers with suggestions and ideas.
NATIONAL ISSUES IN WELFARE REFORM1
by Alair A. Townsend
Status of Welfare Reform
Despite the absence of any mention of
welfare reform in the President's Budget and
the probability of little substantive change in
welfare in the next 2 years, I believe that
welfare reform is inevitable in the
not-too-distant future. I would even argue that
the hiatus gives us a welcome opportunity to
grapple with the seemingly insoluble problems
in reform that were raised in the debate over
the President's Family Assistance Plan (known
as FAP).
Since 1969, when F AP was first unveiled,
steady progress has been made in defining more
clearly the issues involved and in collecting
more of the necessary facts. In those early
days, the chief target of reform was the Aid to
Families with Dependent Children Program,
known as AFDC. This program was shown to
be inequitable to male-headed families, to set
up perverse incentives for family splitting, to
offer less than adequate incentives to work,
and to pay far too little in benefits to
female-headed families in some States.
While this type of critique is still valid in
general, the major lesson of the Family
Assistance Plan debate was that the focus on
AFDC alone is too narrow because of the
SUMMER 1973
growth of other public welfare programs that
often worsen, but sometimes reduce, the
problems in AFDC. The deliberations over the
Family Assistance Plan highlighted the
necessity of analyzing welfare reform plans in
the context of all existing program!>B.ll
need-based programs offering cash, food,
health, day care, and housing benefits; and
those offering social insurance-rather than just
in the context of the existing public assistance
programs like AFDC. There are several reasons
for this which I will discuss using F AP as a case
study.
Adequacy of Benefits
In order to analyze the adequacy of F AP
benefit levels, one has to know what other
benefits and private income are available to
potential F AP recipients and how they are
distributed currently. Knowing this allows one
to judge more realistically the adequacy of the
combined benefit and income levels that would
1 Condensed version of a paper given at the
Agricultural Outlook Conference. The complete paper
may be ordered from the address on p. 2. Alair A.
Townsend is technical director, Subcommittee on
Fiscal Policy, Joint Economic Committee. The views
expressed are those of the author and do not reflect
those of the subcommittee or its staff.
3
result. For example, the AFDC or the F AP
basic cash benefit level may appear to be
cruelly low, but this is offset by the benefits
that usually are attached to AFDC-free
medical care, free school lunches for the
children, eligibility for food stamps or surplus
food commodities, and free day care.
Depending on the State, a family of four
with no other income can receive a package of
benefits that would require the equivalent of
over $6,500 in gross earnings to purchase. Of
course, AFDC families in many areas receive
nowhere near this amount, but no one has been
very certain who receives what, because
benefits in the form of food, health, and
housing are rarely included in official
census-style surveys, and measurements of the
extent of poverty do not count the value of
such benefits in summing the incomes of the
poor.
The Subcommittee on Fiscal Policy's study
of public welfare has attempted to gather
information on the distribution of these
benefits to fill the void. What we have found
indicates that a package of several benefits is
received by large enough numbers of people to
warrant further investigation and concern over
the equity of these packages and the impact on
work incentives of the higher value packages.
For example, we estimate that 9 to 12 percent
of AFDC families receive AFDC, medicaid,
food stamps or surplus commodities, and live
in public housing.2 This population-roughly
300,000 families-faces much higher work
disincentives and has higher levels of benefits
than one would guess by looking only at the
AFDC level. Twenty-eight percent of
old-age-assistance recipients receive food
stamps, and an additional 18 percent receive
food commodities. Forty percent of civil
service retirees also receive a social security
check. Six percent of old-age-assistance
recipients also receive medicaid, medicare, and
public housing benefits. In March 1973, the
Subcommittee published the results of a major
field study on the distribution of public
2 Studies in Public Welfare, Paper No. 1, "Public
Income Transfer Programs: The Incidence of Multiple
Benefits and the Issues Raised by Their Receipt,"
prepared by James R. Storey for the Subcommittee on
Fiscal Policy. April10, 1972.
4
welfare benefits that will add to our knowledge
of combined benefits. 3
Work Incentives
The level of combined cash, food, housing,
health, and other benefits is only one factor in
determining the work incentive aspect of such
plans. Equally important is the way in which
benefits are tailored to income.
Many programs today are related to income,
and benefits are reduced as income rises. Some
of these benefit reduction or loss rates are high,
and some are low. Unemployment insurance
typically has a 100-percent benefit loss
rate-that is, a dollar earned is a dollar of
unemployment compensation lost. AFDC
benefits are reduced by 67 cents for each dollar
of net earnings. As your income rises by $1,
you must pay about 30 cents more for the
same amount of food stamps and about 25
cents more in public housing rent. If your
income rises above a certain level, you may lose
eligibility for medicaid completely. The cost of
day care may increase if the center bases its fee
schedule on family income. The recently
enacted higher education law provides
scholarships based on family income, and the
higher the family's income, the lower the aid.
The number of programs based on need
seems to be rapidly increasing, and with it the
probability that low- or even middle-income
families will participate in one or more of
them. The result is that each program takes its
share of increased income, sometimes adding
up to more than a dollar-for-dollar reduction in
benefits as income rises. An aged couple, for
example, receiving a veteran's pension and a
social security check for $140 per month,
achieves only a $75 per month rise in
spendable income if one of them earns $300
per month from a part-time job. In New Jersey,
an unemployed man with a wife and two
children receiving public assistance and food
stamps would add only $110 to his net
monthly income if he took a full-time job that
pays $500 a month. In addition, he would lose
3 Studies in Public Welfare, Paper No. 6, "How
Public Welfare Benefits are Distributed in Low-Income
Areas," prepared by James R. Storey, Alair A.
Townsend, and Irene Cox for the Subcommittee on
Fiscal Policy, March 26, 1973.
FAMILY ECONOMICS REVIEW
eligibility for medicaid, which pays an average
of $52 a month for the medical bills of an
AFDC family in this State.
New proposals could further complicate this
problem if simply added to existing programs.
The Family Assistance Plan got bogged down
when it was discovered that, if added on top of
these other benefits, it would both raise the
guarantee level for persons receiving various
combinations of programs and, more
importantly would also raise to extraordinarily
high levels the combined rate of benefit loss for
earnings. The work incentives that were
carefully built into F AP could be undermined
by other programs.
Equity of Benefits
The distribution of existing benefits,
especially those tied to eligibility for AFDC,
seems to meet few of the criteria for equity. In
singling out the unemployables in most of the
cash assistance programs, for example, we have
often reversed the income position of persons
who work and those who do not. It is well
known by now that in a State with liberal
welfare benefits, a female-headed family on
AFDC can receive a higher cash income than a
family headed by a man or woman working for
low wages, and the inequity is compounded
when food, health, and other benefits are tied
to AFDC. The Family Assistance Plan
promised to reduce the difference in the cash
benefits available to male- rather than to
female-headed families. "But," critics
countered, "so long as F AP benefits are lower
than the AFDC benefits provided by some
States, and so long as eligibility for other
benefits such as medicaid is tied to AFDC, then
inequities can be reduced but not eliminated."
This criticism was valid, but it was not
generally appreciated how much male-headed
families were already receiving in benefits to
supplement low income. Thus, the erroneous
impression was given that male-headed families
would be eligible for welfare for the first time
under FAP.
In fact, many States and localities currently
supplement the earnings of working fathers
under their own general assistance or home
relief programs. These working men can
participate in the food stamp or surplus
commodities programs in almost every place in
SUMMER 1973
the country. They are eligible for public
housing and other subsidized housing programs
on a space available basis, and they may be
eligible for free medical care under medicaid in
some States. If they are employable but
unemployed-whether fully or partially-many
will be eligible for unemployment insurance or
for the unemployed-father portion of AFDC
that 23 States currently operate. However, the
extent to which these programs help to reduce
the inequities created by AFDC, both currently
and under FAP, was unknown because little
data existed on who was benefiting from these
programs.
Administration and Program Planning
The F AP debate focused attention on the
problem of administering this complex set of
programs. Very few seem to be models of
efficiency, and the rapid expansion of
programs such as AFDC and food stamps may
have outpaced the ability of administrators to
handle them within existing organizational
structures. The complex, ever-changing rules
and eligibility requirements create such
administrative confusion that rather large
numbers of ineligible persons receive benefits
and some eligible people are rejected. While
each program has its own problems,
administration of multiple programs at the
local level generally is uncoordinated. The rate
of error in public assistance transactions has
been estimated to be as high as 30 percent
without fraud. A single family may be affected
by several programs, none of which share
information or administrative burdens. The
result seems to be hopeless inefficiency and
confusion. Rather than cutting and paring, it
appeared to many that F AP was only adding
another layer. They wondered: "Can't we
develop a plan that can consolidate and
substitute for some of those that currently
exist?"
Since there has been relatively little
attention paid to problems of program
coordination, program planning often takes
place in a vacuum. The result is that intended
changes in one program are often countered by
features of an overlapping program. Every
Congressional office is aware of the fact that
when social security benefits were increased
recently, some persons got nothing, and some
5
actually lost income. About 4 million
low-income persons over age 65 receive either
old age assistance (OAA) or a veteran's
pension. An increase in social security may lead
merely to a corresponding decrease in one or
other of these income-tested programs and no
change in total income. However, some
people-whose social security increase is so
large as to remove them completely from
OAA-will generally lose real income. As long
as they get a dollar of OAA, they are eligible
for medicaid and probably food stamps, and
special local benefits such as property tax
credits or free garbage collection. When they go
off OAA, they can lose eligibility for these and
other benefits.
Despite these complex interactions among
our growing body of programs designed to
affect standards of living, neither the structure
of Congress nor that of the Executive agencies
is geared toward their analysis. Considerable
analytic work is done by Congressional
committees, agencies, and nongovernmental
researchers preceding major legislative changes.
Generally, such analysis focuses exclusively on
one program at a time-the one under
consideration. Rarely is the set of programs
reviewed in its entirety.
The Congress and the Executive agencies are
organized in programmatic terms-and thus
wear blinders imposed by jurisdictional
boundaries. For example, if we look at only
the 21 major income maintenance programs
with some Federal involvement, we find that
they fall under the jurisdiction of 10 House
and 9 Senate committees, and that they are
administered by 11 Federal agencies. No one
committee has the responsibility for viewing
them all together. Each passes legislation
directly affecting only a few programs with
different eligibility requirements, different
benefit levels, different treatment of income,
and so forth--all this despite the fact that the
programs reach many of the same people.
It is this proliferation and fragmentation of
programs whose benefits seem arbitrarily
distributed that have created the most serious
technical and policy problems that remain
before many members of Congress can accept a
cash income supplement program: namely,
how to integrate and coordinate this multitude
of programs. Indeed, this is the rationale for
the Subcommittee's special welfare study. The
problem at bottom is to focus on what the
Federal Government properly should provide
its citizens by way of basic living levels, to
assure that this is done in as equitable and in as
streamlined a fashion as is possible, and finally,
to assure that the resulting package is
consistently structured so as to encourage and
reward the maximum work efforts of its
recipients.
FLAMMABILITY STANDARD PROPOSED FOR CHILDREN'S SLEEPWEAR,
SIZES 7 THROUGH 14
A proposed standard for flammability of
children's sleepwear, sizes 7 through 14, was
issued by the U.S. Department of Commerce in
March 1973 for comment by the public and
industry. The proposed standard includes
nightgowns, pajamas, robes, and other
sleepwear, as well as fabrics intended for use in
such garments. It is essentially the same as the
standard for sizes 0 through 6X (see FAMILY
ECONOMICS REVIEW, December 1972}, with
certain modifications in testing procedures and
equipment that recognize the ability of older
6
children to take some self-protective measures.
The new proposed standard specifies that
fabrics are to be tested by brief exposure to a
standard flame. Testing is to be carried out on
new items and on items washed and dried 50
times. The proposed standard further specifies
that all items of children's sleepwear are to be
permanently labeled with instructions to avoid
treatments (such as chlorine in laundering) that
are known to cause significant deterioration of
their flame resistance.
FAMILY ECONOMICS REVIEW
NUTRITION LABELING FOR THE CONSUMER
by Betty Peterkin
Soon, nutritive values will appear on labels What Foods Will Be labeled?
of many foods in supermarkets across the
country. A Food and Drug Administration
(FDA) program has set the rules on what
nutritive values shall be shown, and how they
shall be presented. 1 The questions and answers
below highlight some points about the program
that may be useful to leaders in helping the
consumer to understand and use this
information.
Any food may have nutritive values on its
label, but certain foods-those with added
vitamins or minerals and foods claimed to have
special nutritional qualities-must be labeled.
What Will a Nutrition label Show?
1 "Food Labeling" FEDERAL REGISTER, vol. 38,
No. 49, part II, March 14, 1973. These regulations are
somewhat changed from those proposed in February
1972 and discussed in the September 1972 issue of
FAMILY ECONOMICS REVIEW.
Some information is required; some is
optional (see sample label, p. 7). Required
information includes the serving size, the
number of servings in the can or package, the
calories in a serving, and the protein,
carbohydrate, and fat in a serving. Also
required is the amount of protein, two
SUMMER 1973
Sample Label
NUTRITION INFORMATION
(Per Serving)
Serving size = 8 oz
Servings per container= 2
Calories ........................... .
Protein •..•.........................
Carbohydrate .........•..............
Fat ...•............................
(Percent of Calories from fat= 53%)
Polyunsaturated* .................... .
Saturated .......................... .
Cholesterol *(18 mg/100 g) .............. .
Sodium (365 mg/100 g) ................. .
Percentage of U.S. Recommended Daily
Allowance (U.S. RDA)
560
23 g
43 g
33g
22 g
9g
40 mg
810 mg
Protein........... 35
Vitamin A . . . . . . . . 35
Vitamin C . . . . . . . . 10
Thiamin.......... 15
Riboflavin . . . . . . . . 15
Niacin . . . . . . . . . . . 25
Calcium . . . . . . . . . . 2
Iron . . . . . . . . . . . . . 25
Vitamin B6 . . . . . . . . 22
Vitamin B12....... 15
* Information on fat and cholesterol content is provided
for individuals who, on the advice of a physician, are
modifying their total dietary intake of fat and
cholesterol.
Note: Values for nutrients listed in bold face are
required.
7
minerals, and five vitamins in a serving
expressed as a percentage of the "U.S.
Recommended Daily Allowance" (U.S. RDA).
Optional information includes percentages of
the U.S. RDA for 12 additional vitamins and
minerals, and the amount of cholesterol,
saturated and polyunsaturated fatty acids, and
sodium in a serving. If a vitamin or mineral is
added, or if claims are made on the label or in
advertising about the cholesterol, fatty acid, or
sodium in a food, information about the
amount present is required.
Are Nutritive Values Shown for a Food
As-You-Buy-It or As-You-Eat-It?
Values for food as it comes from the can or
package must be shown. In addition, values
may be shown for food prepared according to
directions on the label. For example, a label for
cake mix must show values for the dry mix and
may, in addition, show values for cake
prepared according to directions on the label.
Values must be shown for a serving of dry
ready-to-eat cereal but may, in addition, be
shown for cereal with a given amount of milk.
What is the U.S. RDA?
The U.S. RDA, or U.S. Recommended
Daily Allowances, are amounts of protein
vitamins, and minerals recommended for ~
person to meet nutritional needs for a day. The
U.S. RDA were derived by the Food and Drug
Administration for use in nutrition labeling and
certain other FDA regulations, from the
Recommended Dietary Allowances (RDA) for
24 age categories of men, women, children, and
infants. The Recommended Dietary
Allowances are daily intakes judged by the
Food and Nutrition Board of the National
Academy of Sciences-National Research
Council to be adequate for maintaining good
nutrition in essentially all healthy persons of
that sex and age under current living conditions
in the United States. For most nutrients, the
U.S. RDA is the highest RDA for any sex-age
category. Therefore, a diet that meets the U.S.
RDA will meet the RDA for most persons in a
family or population.
For some people-young children or elderly
women, for example-the U.S. RDA overstates
considerably the amounts for several nutrients
8
recommended by the Food and Nutrition
Board. Unless this is understood, the use of the
U.S. RDA in meal planning may result in
unnecessary diet modification and food
expenditure, as well as unwarranted concern
about shortages of nutrients. The relationship
of the RDA to the U.S. RDA for persons of
selected ages is shown in table 1.
How is the U.S. RDA Different
From the MDR?
The U.S. RDA will replace the MDR or
Minimum Daily Requirement currently used on
labels of some foods, such as ready-to-eat
cereals. The higher levels of the U.S. RDA are
believed to represent desirable nutrient intakes
better than the outdated MDR. Until MDR's
have been replaced by U.S. RDA's on all labels,
this "double-standard" may be confusing to
the consumer.
How Reliable is the Information on Labels?
The FDA program is set up to provide
reliable, but not precise information for the
consumer. The FDA, using procedures laid out
in the regulations, will check to see that values
for calories, carbohydrate, and fat in foods are
not understated and that those for protein,
vitamins, and minerals are not overstated.
Some understatement of the mineral content
of foods may be expected by producers to
insure compliance.
To make values easier to read and use, the
protein, fat, and carbohydrate content is
rounded to the nearest gram. Calorie content is
given to the nearest 2-calorie increment up to
20 calories, to the nearest 5-calorie increment
above 20 and up to 50 calories, and to the
nearest 10-calorie increment above 50 calories.
The percentages of U.S. RDA for protein,
vitamins, and minerals are given in increments
as follows:
2-percent increments up to the 10-
percent level, 5-percent increments above
the 10-percent and up to the 50-percent
level, and 10-percent increments above
the 50-percent level.
When Will New Labels Appear in Supermarkets?
Some producers are expected to label foods
according to the new regulations within the
FAMILY ECONOMICS REVIEW
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Table 1.-The percent of the U. S. Recommended Daily Allowance (used in nutrition labeling)
needed to meet the Recommended Dietary Allowance for individuals by age and sex
Vitamin C B-vitamins
Item Protein' Vitamin A (ascorbic
Thiamin I Riboflavin I Niacin1
Calcium Iron
acid
Percent Percent Percent Percent Percent Percent Percent Pet·cent
U. S. Recommended Daily Allowance 100 100 100 100 100 100 100 100
Recommended Dietary Allowance:
Child 4 years .. . ........ 46 50 67 53 53 28 80 56
8 years .... . . . ... . 62 70 67 73 71 38 100 56
Girl 14 years ........... 85 100 83 80 82 40 130 100
Boy 14 years . . ... . ..... 92 100 92 100 88 50 140 100
Woman 25 years . . .. . . . .... 85 100 92 67 88 32 80 100
60 years . .. . .. . .... 85 100 92 67 88 32 80 56
Man 25 years . .. .. .. . ... 100 100 100 93 100 45 80 56
60 years ... . ....... 100 100 100 80 100 35 80 56
Food
energy
Calories
---
1,600
2,200
2,400
3,000
2,000
1,700
2,800
2,400
1 U. S. RDA of 65 grams is used for this table. In labeling, a 45 gram U. S. RDA is used for foods with high-quality protein such as milk, meat, and
eggs.
2 U. S. RDA is for preformed niacin only; RDA are for niacin equivalent--preformed niacin plus niacin equivalent from dietary tryptophan. In this
table, one-half of the RDA was assumed to be from preformed niacin as occurs in the average U.S. diet.
Sourcs : U. S. RDA, "Food Labeling," Federal Register, vol. 38, No. 49, part II, March 14, 1973 and Recommended Dietary Allowances, 7th ed. 1968,
Publication 1694, National Academy of Sciences - National Research Council.
next few months. By December 197 4, all labels
that show nutritive values must follow the new
label format.
How Can Consumers Use Nutrition
Information on Labels?
There are at least three ways:
To become more aware of some of the
nutrients required for growth and health:-To
learn that foods vary in the kinds and amounts
of nutrients they contain and that a variety of
foods is required to supply the amounts of
these nutrients recommended daily.
To compare nutritive values of different
foods:-Specifically, to compare amounts of
calories, carbohydrate, and fat (and possibly
fatty acids and cholesterol) in a serving of
different foods; to learn which foods are
worthwhile sources of protein, vitamins, and
minerals; and to compare nutritive values of
commercially prepared foods that they might
replace in the diet. The calorie values and the
percentage of the U.S. RDA for eight nutrients
provided by a given serving of selected food
and food groups is given in table 2. These may
be helpful as a basis for learning what types of
foods are worthwhile sources of certain
nutrients and for making comparisons as
nutrition labeling gets underway. The USDA
will publish more detailed tables of this type at
a later date.
The most meaningful comparisons for the
food shopper will be those made among foods
that might be substituted for each other in
meals. For example, values for fresh whole
milk might be compared with those for
chocolate drink, cream cheese with American
cheese, canned tuna with peanut butter, or
orange juice with tomato juice. To compare
values of a food of one type with those of
another-milk with green vegetables, for
example-1.s not helpful. Milk is counted on for
certain nutrients in the diet, and green
vegetables are counted on mainly for others.
Consumers may find it helpful to consider
foods from each of four basic food groups in
making comparisons. Each of the four groups
of foods-milk and milk products; meats,
poultry, fish, eggs, and dry legumes; vegetables
and fruits; and breads and cereals--make special
nutrient contributions to diets in the United
States. For example, cheese and ice cream
10
provide substantial amounts of protein,
riboflavin, and calcium (see table 3). Foods in
the meat group are important for protein, the
B-vitamins (thiamin, riboflavin, and niacin),
and iron; vegetables and fruits for vitamins A
and C; and grain products for several of the
B-vitamins and iron. In addition, foods from
these groups provide other nutrients and
qualities, such as roughage, known to be
important to health and well-being and for
which label information is not required. The
proportions of nutrients provided by food
groups in one diet may differ somewhat from
those in another, but it is difficult to select
food that provides recommended amounts of
nutrients without including some foods from
each of these groups.
A food should be considered to be a superior
source of a nutrient only if its label value is
substantially higher than for other foods. FDA,
for example, allows a producer to claim that
his food is superior to another food if it
contains at least 10 percent more of the U.S.
RDA per serving for the nutrient.
To plan food for a day that will provide
recommended amounts of nutrients:-The
consumer will need certain information other
than that on labels to do this admittedly
difficult task efficiently. For example, a meal
pattern or food guide for selecting a variety of
foods that provides a foundation for a
nutritionally good diet will help identify
combinations of foods that are likely to meet
nutritional goals. Lists of foods that are good
sources of certain nutrients will show what
foods might be added or substituted to
improve selections.
Many foods that the consumer uses will not
be labeled. Nutritive values of these foods,
expressed as percentages of the U.S. RDA, will
be required to supplement information on
labels.
As nutrition labeling gets underway tools for
helping consumers to total nutrients for a day's
food and to evaluate these totals will probably
become available.
Are Foods With Highest Nutritive Values
on Labels the Best Selections?
Not necessarily. Here are some examples of
situations in which the food with the highest
value may not be the best selection.
FAMILY ECONOMICS REVIEW
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Table 2.-Food energy and percentage of U.S. RDA for 8 nutrients provided by a serving of selected foods•
Size of Vitamin C B·vitamins
Food2 serving Food Protein Vita· (ascorbic
(ready· energy min A acid) Thiamin Riboflavin Niacin' Calcium Iron
to-eat)
Calories Percent Percent Percent Percent Percent Percent Percent Percent
Milk, whole fluid .. ... ... . 1 cup 160 20 6 4 4 25 ... 30 ...
Cheese, process Cheddar ... 1 ounce 110 15 6 0 ... 8 ... 20 ...
Meat, poultry, fish (lean) . . 3 ounces 220 50 15 ... 10 15 25 ... 15
Eggs . . . . . . . . .. . . . . .. . . . . !large 80 15 10 0 4 8 ... 2 6
Dry Beans .............. %cup 230 20 2 6 10 4 6 15 20
Peanut butter ........... 2 table- 190 10 ... 0 2 2 25 ... 4
spoons
Bread, enriched .......... 2 slices 140 6 ... . .. 8 6 6 4 6
Cereal, ready-to-eat4 •••••• 1 ounce 110 4 20 20 25 25 20 ... 20
Citrus juice ............. Y2 cup 60 ... 6 100 8 --- 2 ... ---
Other fruit, fruit juice ..... %cup 60 ... 6 15 2 2 2 . .. 4
Tomatoes, tomato juice . . . %cup 25 --- 20 35 4 2 4 ... 4
Dark-green and deep-yellow
vegetables ......... .... %cup 45 4 140 40 6 6 4 6 6
Potatoes ... ... ......... Medium 80 4 --- 35 8 2 6 --- 4
Other vegetables ......... %cup 45 4 8 20 4 4 2 2 4
Butter, margarine . . . . . . . . 1 table- 100 ... 10 0 --- ... --- --- 0
spoon
Sugar .................. 2 tea· 25 -·· 0 0 0 0 0 0 ---
spoons
Molasses ............... 2 table- 100 --- --- --- 2 2 2 15 25
spoons
1 Percentages expressed in increments as required by regulation for nutrition labeling ("Food labeling," Federal Register, vol. 38, No. 49, part II,
March 14, 1973): 2-percent increments up to and including 10-percent level; 5-percent increments above 10 percent and up to and including the
50-percent level, and 10-percent increments above the 50-percent level.
'"Nutritive Value of Foods," USDA, HG-72, was used as a basis for percentages for specific foods. Values for food groups are based on average
selections of foods in the group by U.S. families.
• In addition, niacin equivalent from the amino acid, tryptophin, found principally in animal products, would contribute substantially toward meeting
the body's need for this nutrient.
4 Based on average of values on labels of 59 varieties of ready-to-eat cereals, February 1973 .
......
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~ ......
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t:tj
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0 z
0 a=
0 rn
::0
t:tj
<....!..
t:tj :a
Table 3. -Food energy and 8 nutrients provided in U. S. diets by the basic food groups•
Food Vitamin C B-vitamins
Food group energy Protein Vitamin A (ascorbic
Thiamin I Riboflavin I Niacin
Calcium Iron
(calories) acid)
Percent Percent Percent Percent Percent Percent Percent Percent Percent
All food ......................... 100 100 100 100 100 100 100 100 100
Milk, cheese, ice cream ............ 13 20 12 5 10 38 2 61 1
Meat, poultry, fish, eggs, dry legumes . 27 52 24 1 29 30 44 7 42
Vegetables and fruits ............. 10 7 51 88 19 9 14 9 18
Grain products~ .................. 26 20 1 1 40 19 23 17 31
Other food and beverages3
•••• : • ••• 24 1 12 5 2 4 17 6 8
----
1 Nutritive value of food used by U.S. households, "Dietary Levels of Households in the United States, Spring 1965," HFCS Report 6, table 6.
2 Includes whole-grain, enriched and unenriched products.
3 Alcoholic beverages are included in this group .
• Stewed tomatoes are chosen instead of
applesauce-a family favorite-for dinner,
because labels show that tomatoes provide
more vitamin A and vitamin C. The
family's vitamin A and vitamin C
allowance had already been met by orange
juice at breakfast and raw carrots in
packed lunches. If only foods that are the
best sources of the nutrients shown ·on the
labels are chosen, variety in meals may be
severely and unnecessarily limited.
Furthermore, the nutritional quality of
meals may be jeoparidzed because certain
foods that are important sources of
nutrients not shown on the label may be
eliminated from the diet.
• Sliced ham is selected for lunch instead of
bean soup, which has a lower protein
value and a lower price, for a family that
always has a liberal serving of meat,
poultry or fish for dinner. The budget
suffers, yet the extra protein provided by
selecting ham, rather than soup, may not
be needed. Either the ham or the soup,
along with other foods eaten, probably
would provide the recommended amounts
of protein for the day.
• A potpie is selected instead of a hearty
vegetable beef soup, because it provides
slightly more of some nutrients. The pie
furnishes 400 calories; the soup 200.
Depending on the adequacy of the rest of
the day's food with regard to calories and
nutrients, the soup may be the better
choice. Its selection, instead of the potpie,
would free 200 calories for foods that·
might provide nutrients needed.
• A fabricated food with liberal amounts of
minerals and vitamins added is selected in
place of a variety of conventional foods
each with lower values. Such choices
made on a regular basis may result in a
diet that is short in certain nutrients not
shown on labels (and some not yet
identified by nutrition scientists) that are
contained in conventional foods.
• Certain foods are avoided because they
have no nutritive values on their labels. It
is assumed they are not ve1y nutritious
and, therefore, should be excluded from
meals and snacks. This is not necessarily
true. Almost everyone will use some foods
SUMMER 1973
to round out meals and to meet energy
needs that will not show up well in
relation to the U.S. RDA.
Can the Economical Food Sources of
a Nutrient Be Found by Using
Label Information?
Yes, but not easily, and frequently for no
useful purpose. The most economical source of
a nutrient can be found by comparing the costs
of the U.S. RDA for a nutrient from a number
of foods.
For example, labels show these facts:
Citrus juice ••• 0 • •
Fruit juice . ... ...
Tomato juice .....
Servings
per
can
12
12
6
1 See examples in table 2.
Price
per
can
60\i
36\i
24¢
Percent of U.S.
RDAper
serving for '
Vita- Vita­min
C min A
100 6
15 6
35 20
Divide the price by the servings per can to get
the cost per serving:
Citrus, 5¢; fruit, 3¢; and tomato, 4¢.
Divide the cost per serving by the percent of
U.S. RDA -:- 100 to get the cost per U.S. RDA:
Vitamin C: Citrus 5¢ -:- (100 -:- 100) = 5¢;
fruit 3¢ -:- (15 -:- 100) = 20¢; tomato 4¢ -:­(
35-:- 100) = 11¢.
Vitamin A: Citrus 5¢ -:- (6 -:- 100) = 83¢;
fruit 3¢ -:- (6-:- 100) =50¢; tomato 4¢-:- (20
-:-100) = 20¢.
According to these calculations, citrus juice
is the best buy in vitamin C, tomato juice the
best buy in vitamin A, and fruit juice the least
expensive per serving. If only these two
nutrients are considered, which of the three is
the economical selection? To anwer this
question, it is necessary to know what other
foods are eaten and to what extent they
provide allowances for vitamins A and C.
The economical selection would be:
Fruit juice, if other food selections provide
the needed amounts of both vitamins A and C.
Tomato juice, if vitamin A is short by over 6
percent of the U.S. RDA.
13
Citrus juice, if vitamin C is short by more
than 35 percent of the U.S. RDA, but fruit
juice, if short by 15 percent or less.
This procedure is given to show how
complicated such calculations might be for
only three foods and two nutrients. Its use is
not recommended for selecting food to meet
the family budget. A simpler approach for the
consumer is presented in USDA's Home and
Garden Bulletin No. 183 (see reference below).
Where Can I Get Easy-To-Understand
Information About Nutrients and
What Foods Provide Them?
Nutrition is a complex and developing
science. Of course, it is not possible to cover
the many aspects of the science in a single
consumer publication or on food labels in
supermarkets. However, a variety of
tools-from simple food guides to detailed
tables of nutritive values of foods and nutrient
allowances-is available for the use of
consumers in selecting a good diet. Some of
these are presented in publications listed
below. Tools to help the consumer use the
food labeling approach to checking food
choices will become available as the nutrition
labeling program gets underway.
• NUTRITION .... FOOD AT WORK
FOR YOU, HG-1, Separate 1, tells how
certain nutrients function in the body and
lists foods that supply appreciable
amounts of each of them. It also presents
a simple food guide developed by
nutrition scientists to help people select a
nutritious diet.
• NUTRITIVE VALUE OF FOODS,
HG-72, includes the values for food
energy, 10 nutrients, and fatty acids for
over 600 foods commonly used in the
United States, and the Recommended
Dietary Allowances for food energy and
eight nutrients for all sex-age categories.
This publication can be used by the
consumer who wants to calculate the
nutritive value of foods selected and to
compare these values with the RDA for a
person of his sex and age.
• YOUR MONEY'S WORTH IN FOODS,
HG-183, presents information on planning
and shopping for nutritious meals for
consumers interested in economizing on
food.
Single copies of these publications can be
obtained free from the Office of
Communication, U.S. Department of
Agriculture, Washington, D.C. 20250.
USDA CLOTHING BUDGETS FOR CHILDREN
ARE PUBLISHED
Annual costs of USDA clothing budgets for
children, in 1972 prices, were presented and
discussed in the March 1973 issue of the
HOME ECONOMICS RESEARCH JOURNAL.
Costs for 179 budgets were computed for
children in 7 sex-age groups and 10
region-urbanization groups at 3 cost
levels-economy, low-cost, and moderate-cost.
Reprints of the paper, "Clothing Budgets for
Children from the USDA: Annual Costs at
14
Three Levels in Four Regions," by Dr. Virginia
Britton of the Consumer and Food Economics
Institute, are available from the Sales Office,
American Home Economics Association, 2010
Massachusetts Ave. NW, Washington, D.C.
20036. Single copies are $1. Remittance must
accompany orders of $10 and under. For 100
or more reprints, please write to AHEA for a
quotation of quantity prices.
FAMILY ECONOMICS REVIEW
FINANCIAL ASSETS: THE CHANGING FAMILY PORTFOLIO
by Nancy Rudd
A family's decision to save generally consists
of two steps: first, a decision to withhold part
of current income from current consumption;
and second, a decision regarding the outlet or
form in which this unspent income should be
kept. The outlets available for family savings all
differ considerably in their inflation proofness,
liquidity, safety, and rate of return, and the
choice of a savings outlet affects the family's
financial outlook.
One broad group of savings outlets into
which families may place unspent funds is that
of financial assets, including checking and
savings accounts, United States Series E savings
bonds, and corporate bonds and shares
(stocks). Checking and savings accounts and
savings bonds are assets of fixed value; the
money or dollar value of such assets equals the
original amount allocated to them plus interest
earned, if any. Fixed value assets generally lack
inflation proofness, because the purchasing
power of the dollars held in them decreases
with increases in the cost of living. Corporate
bonds and stocks are generally assets of
fluctuating value; the amount of cash into
which they can be converted varies according
to market conditions and the price level. Such
assets offer potential protection against
inflation, because their dollar value may
increase as the cost of living increases. In the
case of corporate stocks, the dollar return (in
the form of dividends) may increase as well.
The potential inflation proofness of corporate
bonds is considerably less than that of stocks.
Prior to maturity the price of a bond may
fluctuate and there is the possibility of selling
it for more than the purchase price, but the
dollar return of a corporate bond is fixed, and
at maturity its dollar value equals its face value
regardless of the previous market prices.
Checking accounts offer the greatest degree
of liquidity-the ease with which saved funds
can be converted to cash-in-hand. Funds in
checking accounts are often obtained simply
by writing a check at the point of need. Savings
accounts and Series E bonds are less liquid than
checking accounts. Funds from savings
accounts are generally available by presenting a
passbook to the institution that is holding the
SUMMER 1973
funds. Series E bonds can be redeemed at a
bank or other authorized institution. Corporate
bonds and shares must be sold in the market
through a broker at an undetermined price and
are the least liquid of all financial assets.
Series E bonds and checking and savings
accounts-especially those in institutions
insured by the Federal Deposit Insurance
Corporation, the Federal Savings and Loan
Insurance Corporation, or the National Credit
Union Administration-offer a high degree of
safety for funds because the original dollar
investment is unlikely to be lost, even though
its purchasing power may decline. Corporate
bonds and stocks are, by comparison, relatively
risky forms of saving, although bonds are
generally considered to be safer than stocks.
However, the amount of risk associated with
different bonds and stocks varies considerably
and each must be carefully evaluated on its
own merits.
Checking accounts seldom pay any return,
and frequently carry a service fee. The rate of
return paid on savings accounts varies among
institutions and among different types of
accounts, but at present is generally between 4
and 6 percent per annum. The current rate of
return on new issues of Series E bonds is 5lh
percent if the bonds are held to maturity (5
years 10 months). However, bonds redeemed at
any time prior to maturity earn less than 5lh
percent. The rate of return on corporate bonds
and stocks varies widely with the possibility of
higher returns than on other types of assets
balanced by a higher risk of loss.
The choices of families 1 and the resulting
distribution of financial assets among the
various outlets has changed over the last 25
years. Estimates of the financial assets of
households, personal trusts, and nonprofit
organizations2 indicate that amounts held in
1 The term "family" in this article is used in the
popular sense. The data given in the text and table
refer to household~ broader term which includes per·
sons living alone and unrelated persons living together,
as well as families (related persons living together).
, Board of Governors of the Federal Reserve
System. Flow of Funds Accounts: Financial Assets and
Liabilities Outstanding, 1945-1971. Estimates for
households alone are not available.
15
savings accounts have increased as a proportion
of the total while amounts held in checking
accounts and savings bonds have decreased (see
table).
Another notable shift in the composition of
the financial portfolio of these population
groups is the declining importance of U.S.
savings bonds. (Figures include data on Series
Financial assets held by households, personal trusts, and nonprofit
organizations for selected years, 1946 to 1971
Item 1946 I 1951 I 1956 I 1961 I 1966 I 1971
Million Million Million Million Million Million
dollars dollars dollars dollars dollars dollars
Total financial assets ..... . ... . 380.5 486.4 753.6 1,112.1 1,468.7 2,169.9
Percent Percent Percent Percent Percent Percent
Type of asset as a percent of total:
Demand deposits and currency . 15.8 12.3 8.9 6.5 6.3 6.2
Savings accounts . . . . . . . . . . . . 14.8 14.8 15.4 16.3 20.9 22.9
At commercial banks . . . . . . . 8.1 7.0 6.1 6.1 8.7 10.2
At savings institutions . . . . . . 6.7 7.8 9.3 10.3 12.2 12.6
U.S. savings bonds . . . . . . . . . . 11.6 10.1 6.7 4.2 3.4 2.5
Corporate and foreign bonds . . . 2.3 1.2 1.0 .9 .9 2.2
Corporate shares . . . . . . . . . . . . 26.8 31.4 39.3 43.0 38.2 38.0
Investment company shares . . . . .3 .7 1.2 2.1 2.4 2.5
Other1
• • • • • • • • • • • • • • • • • • • • 28.4 29.5 27.7 26.9 27.9 25.8
1 Includes U. S. Government securities other than savings bonds, State and local obligations, commercial paper,
mortgages, life insurance and pension fund reserves, security credit, and miscellaneous assets.
Source: Board of Governors of the Federal Reserve System. Flow of Funds Accounts: Financial Assets and
Liabilities Outstanding, 1945-1971.
In 1971, only a little over 6 percent of total
financial assets were in the form of demand
deposits and currency (roughly equivalent to
checking accounts and cash) in contrast to
nearly 16 percent in 1946. Savings accounts,
on the other hand, accounted for nearly 23
percent of households' financial assets in
1971-up from 15 percent 25 years ago.
Savings institutions, such as credit unions and
savings and loan associations, have received a
greater proportion of the additional funds
going into savings accounts than have
commercial banks, thus increasing funds
available to such institutions for mortgage
loans and other types of investment. Much of
the increase of funds going into savings
accounts has probably been drawn from
holdings of demand deposits and currency,
suggesting a decreasing willingness on the part
of households to let excess funds sit idle.
16
H as well as Series E bonds.) This asset was a
major outlet for savings during World War II,
but over the years, purchases of new bonds
have not been sufficient to balance the
redemption of old bonds. Despite increases in
the rate of return paid on these bonds, they are
not competitive with other forms of savings
that earn· comparable rates of return because of
the long period they must be held before
paying the stated interest rate.
Corporate stocks consistently accounted for
the largest proportion of total financial assets
between 1946 and 1971. In 1971 they
accounted for 38 percent of all assets-up from
27 percent in 1946. Because stocks fluctuate in
value, it is difficult to determine to what
extent changes in their share of all financial
assets reflect changes in preferences, and to
what extent the changes reflect rising and
falling market values of existing stock.
FAMILY ECONOMICS REVIEW
Corporate and foreign bonds have remained a
very small proportion of total financial assets,
as have investment company shares such as
mutual funds, although the latter have
experienced some growth in importance.
Another broad group of savings outlets that
deserves mention is that of tangible assets such
as housing, land, automobiles, durable goods,
and "collectibles" such as antiques, stamps,
coins, jewelry, and art objects. These are all
assets of fluctuating value, but for automobiles
and durable goods, the fluctuation is nearly
always downward unless the item survives long
enough to become an antique. The market
value of tangible assets and, for rental
property, the return, depends largely on supply
and demand, and these assets, therefore, carry
various degrees of risk. Unfortunately, it is not
possible to examine trends in holdings of
tangible assets because no data comparable to
those presented for financial assets are
available.
FACTORS TO CONSIDER IN SELECTING A SAVINGS ACCOUNT
by Nancy Rudd
Savings accounts have been steadily increasing
in popularity as an outlet for savings since
World War II. The proportion of financial
assets of households, personal trusts, and
nonprofit organizations held in such accounts
increased from 15 percent in 1946 to 23
percent in 1971.1 About three-fourths of this
increase was in accounts in savings institutions
(such as savings and loan associations and
credit unions), and about one-fourth was in
accounts in commercial banks. Banks and
savings institutions whose deposits are insured
by the Federal Deposit Insurance Corporation,
Federal Savings and Loan Insurance
Corporation, or National Credit Union
Administration are subject to ceilings on the
maximum interest rates that they can pay on
savings accounts. The apparent preference for
accounts in savings institutions may be due to
the fact that they are allowed to pay higher
interest rates than are commercial banks.
Savings accounts, often called passbook
accounts, offer the advantages of safety,
liquidity, and convenience. Most savings
accounts are insured for up to $20,000 by one
of the institutions mentioned above, and
therefore offer considerable safety for funds.
Although financial institutions can legally
require advance notice before withdrawals
from savings accounts can be made, such notice
is rarely required. Consequently, funds in
1 Board of Governors of the Federal Reserve
System. Flow of Funds Accounts: Financial Assets and
Liabilities Outstanding, 1945-1971. Estimates for
households alone are not available.
SUMMER 1973
savings accounts are very liquid-readily
converted to cash.2 Savings accounts are
convenient and do not require the time and
effort frequently needed to manage some other
kinds of assets. Savings accounts, however,
differ considerably with regard to the return
paid on them and the saver who wishes the
greatest possible return should plan to spend
some time and care in selecting a savings
institution.
There are three main variables in the
calculation of interest on such accounts: The
interest rate; the frequency of computing and
compounding interest; and the bookkeeping
method. The interest rate is stated as a per
annum rate such as 5 percent per annum.
Interest is generally computed quarterly or
semiannually, although more frequent
computing (monthly, daily, and even
"continuously") is becoming more common. In
computing interest, an appropriate fraction of
the per annum rate is used. For example, a 5
percent per annum rate would actually be 1.25
percent quarterly or 2.5 percent semiannually.
Interest may be computed more frequently
than it is compounded (actually added to an
account so that it begins earning interest itself).
The frequency with which interest is computed
determines the length of the interest period.
The bookkeeping method determines what
2 There are several kinds of special accounts
available that pay a higher rate of return in exchange
for the saver's agreement not to withdraw his money
for a specified period of time. Notice of withdrawal
may be required for these accounts.
17
portion of the funds in the savings account is
eligible to earn interest.
The interest rate and the bookkeeping
method are the most important variables in
determining the amount of interest earned.
Interest rates are easy to compare among
various institutions. However, the bookkeeping
method is more difficult. Understanding the
basic methods used by savings institutions and
shopping for the most favorable method
available may make a considerable difference in
the interest earned, especially on accounts with
frequent deposits and withdrawals.
The five basic bookkeeping methods are
described below, and the amount of interest
earned by the illustrated hypothetical passbook
account is indicated for each of the methods.
Passbook savings account'
Date With· Deposits Balance
drawals
Jan. 1 $ 500
Mar. 1 $500 1,000
May 1 500 1,500
June 30 $500 1,000
July 1 1,000
March 1 deposit for 4 months ($8.33) and on
the May 1 deposit for 2 months ($4.17). Total
interest earned is $12.50.
Method Ill: First In, First Out,
First Deposit
Interest is paid on the number of whole
months that money is in the account. With this
method, withdrawals are subtracted from the
first deposit rather than from the beginning
balance, and then from subsequent deposits.
The June 30 withdrawal is subtracted from the
March 1 deposit, and interest is paid on the
beginning balance for 6 months ($12.50) and
on the May 1 deposit for 2 months ($4.17).
Total interest earned is $16.67. Had there been
no deposits, the withdrawal would have been
subtracted from the beginning balance.
Method IV: Last In, First Out
As in methods II and III, interest is paid on
the number of whole months that money is in
the account. With this method, withdrawals are
subtracted from the most recent deposit and
then from consecutively earlier deposits. The
June 30 withdrawal is subtracted from the May
'The account earns 5 percent per annum computed and 1 deposit and interest is paid on the beginning
compounded January 1 and July 1. balance for 6 months ($12.50) and on the
Method 1: Low Balance or Highest.
Continuous Balance
Interest is paid only on funds that are in the
account for the entire interest period. In this
example the highest continuous balance is
$500 for the 6-month period, and interest is
paid only on this amount. No interest is paid
on the deposits of March 1 and May 1. The
total interest earned is $12.50.
Method II: First In, First Out, Beginning
Balance
Interest is paid on the number of whole
months that money is in the account.
Withdrawals during the 6-month period are
subtracted from the beginning balance and
then from subsequent deposits. In this
example, the June 30 withdrawal is subtracted
from the January 1 balance, and no interest is
paid on that amount. Interest is paid on the
18
March 1 deposit for 4 months ($8.33). Total
interest earned is $20.84.
Method V: Day of Deposit to Day of
Withdrawal
Interest is computed daily (rather than
semiannually) on whatever funds are in the
account. In the example the June 30
withdrawal results in the loss of only 1-day's
interest on $500-about 7 cents. Total interest
earned is $24.93.
Most institutions that use methods I, II, III,
and IV have a grace period during which
deposits can be made and assumed to be in the
account for the entire period (unless later
withdrawn). In method I, the grace period
occurs at the beginning of the interest period;
in methods II, III, and IV, the grace period
occurs at the beginning of each month. Funds
deposited after the grace days do not begin
earning interest until the following interest
period or month.
FAMILY ECONOMICS REVIEW
With no deposits or withdrawals during the
6-month period, the interest earned on the
account balance would be the same regardless
of the bookkeeping method used. With
deposits and withdrawals the advantageousness
of the various methods increases, moving from
method I to method V, with method !-highest
continuous balance-offering the lowest
possible return and method V-day of deposit
to day of withdrawal-the highest.
Although the rate of interest and
bookkeeping method are most important in
determining the return paid on a savings
account, several other factors can also make a
difference in an account's earnings. The longer
the grace period and the shorter the interest
period, the greater the saver's freedom to make
withdrawals and deposits without losing
interest. In this example, interest was
computed semiannually. If it had been
computed quarterly, the funds in the account
prior to April 1 would not have been affected
by the June 30 withdrawal. The $500
beginning balance would have earned 3
months' interest regardless of the bookkeeping
method used, and the March 1 deposit would
have earned 1 month's interest if methods II,
III, IV, or V were used. Greater frequency of
compounding speeds up the rate at which
funds in an account grow, but does not
generally make a remarkable difference in the
earnings unless very large sums of money are
involved.
Many banks and savings institutions
advertise their interest rate and the frequency
with which they compute and compound
interest. However, few institutions advertise
their bookkeeping method. Generally, this
information can be obtained from an
institution, but the saver must be both
persistent and knowledgeable because
personnel at such institutions often do not
know or cannot describe the bookkeeping
method used.
The favorableness of the terms on savings
accounts offered to savers depends a great deal
on the competitiveness of financial institutions
in a given community. Since this competition
tends to be greater in metropolitan areas, the
rural dweller may want to investigate savings
institutions in metropolitan areas, if possible.
Clearly, it pays to "shop" for a savings
account.
THE OLDER POPULATION
Interest in how older people fare has
intensified in recent years partly because of
their rapidly growing numbers. The number of
people 65 and over is rising about 3 to 4
million every decade or roughly 300,000 to
400,000 per year. In 1970 there were over 20
million in this group.
As a proportion of the total population, the
group has more than doubled during this
century-from 4.1 percent in 1900 to 9.8
percent in 1970. The older population itself is
aging; that is, the proportion 65 to 69 is getting
smaller, while the proportion 75 and over is
getting larger. The trend is expected to
continue at least to the end of the century.
States with large proportions of older people
are generally those that have experienced heavy
out-migration, typically of the young. This is
true for much of the midwestern farm belt, as
well as some States in other sections of the
country, such as Maine and Arkansas. Other
SUMMER 1973
States with high proportions of older people
are those where the elderly migrate to retire,
usually areas of favorable climate such as
Florida and Arizona. The States with low
proportions of older people are mainly in the
South and West, in areas with high birth rates
or heavy in-migration of younger persons.
Only a small proportion of the elderly (less
than 5 percent) live in institutions. Nearly 80
percent of the men and 58 percent of the
women 65 and over were members of families
in 1971. These proportions are lower than a
decade ago, however, reflecting a decrease in
the proportion who were living with relatives
other than their spouses. Correspondingly,
there has been an increase in the proportion of
one-person households in this age group.
Source: U.S. Department of Commerce, Bureau of
the Census, CURRENT POPULATION REPORTS,
"Some Demographic Aspects of Aging in the United
States." Series P-23, No. 43. February 1973.
19
SOCIAL SECURITY AMENDMENTS OF 1972
In October 1972, the President signed into
law the Social Security Amendments of 1972.
These are in addition to the July 1972
amendments that increased monthly cash
benefits (see FER, March 1973).
These amendments made substantial changes
in the eligibility requirements for social
security beneficiaries. Because of space
limitations, FAMILY ECONOMICS REVIEW
has not been able to cover all of the provisions
as adequately or as fully as we would have
liked. Readers who work with social security
beneficiaries and who wish more information
should see the March 1973 issue of the
SOCIAL SECURITY BULLETIN.
The most significant and far-reaching
provisions of the 1972 amendments are
highlighted below:
20
• Higher benefits for most aged widows and
widowers who are eligible for benefits.
• For men reaching age 62 in the future,
repeal of the provisions under which a
man the same age and with the same
earnings as a woman generally got a lower
benefit than the woman worker, and
under which men needed more social
security credits than women to qualify for
retirement benefits. (The change will be
accomplished over a 3-year period
beginning in 1973.)
• Changes in the retirement test to assure
that the more a beneficiary works and
earns, the more spendable income (social
security benefits plus earnings after taxes)
he will have, and to raise from $1,680 to
$2,100 the annual amount of exempt
earnings, with future automatic
adjustments to keep pace with increases in
earning levels.
• A special minimum benefit for those who
have worked in covered employment and
who have had low earnings for many
years.
• Higher benefits for workers who do not
get social security retirement benefits
before age 65, but who continue to work
past that age.
• Improvements in disability insurance
protection, including a reduction in the
waiting period for benefits, and an
extension of childhood disability benefits
to persons disabled between ages 18 and
22. Also, improved protection for a
worker's dependents and survivors.
• Extension of Medicare protection to
disability insurance beneficiaries who have
been on the social security disability
benefit rolls for at least 2 years.
• Extension of Medicare protection to
persons under age 65 (those getting
monthly social security benefits, those
not getting benefits who have worked in
covered employment long enough to be
insured, and the wives or husbands and
children of such persons) who need
hemodialysis treatment for chronic
kidney disease or who require a lUdney
transplant.
• Changes in the Medicare program to
improve its operating effectiveness.
• Creation of a new Federal supplemental
security income program, effective
January 1974, for the needy aged, blind,
and disabled. Administered by the Social
Security Administration, but financed out
of general revenues of the Federal
Government, this program will replace the
present Federal-State programs of old-age
assitance, aid to the blind, and aid to the
permanently and totally disabled. Federal
payments under this program will assure
minimum income levels; States may
supplement the Federal payments to
maintain existing payment levels where
these are higher.
Source: Ball, Robert M., "Social Security
Amendments of 1972: Summary and Legislative
History," SOCIAL SECURITY BULLETIN. March
1973, pp. 3-25.
FAMILY ECONOMICS REVIEW
COMPUTER PROGRAM-BUDGETING FOR RETIREMENT
"Budgeting for Retirement," a computer
program developed by the Consumer and Food
Economics Institute, is now available to
Extension workers, teachers, and . other
professionals who have access to a remote
computer terminal. These terminals are now
available in many State and county extension
offices and in public schools. The purpose of
the program is to help professional workers
counsel families who are planning for
retirement, by providing research data in a
problem-solving context. In addition, realistic
case studies can be developed for use in
teaching.
To use the program, a person sits down at a
remote computer terminal and enters data
about a family-including anticipated income
and a spending plan. Research data stored in
the computer help the user to evaluate the plan
under various conditions, such as high inflation
rates, financial catastrophe, loss of a family
member, or early retirement. The program is
interactive-the person using the program
enters data and responds to questions from the
computer.
The program is available from the
Computerized Management Network (CMN).
Information about costs and procedures for
using the program on CMN may be obtained
from Harold Walker, project director,
Computerized Management Network,
Cooperative Extension Service, Department of
Agricultural Economics, Virginia Polytechnic
Institute and State University, Blacksburg, Va.
24061.
Information on program content may be
obtained from Lucile F. Mork, Consumer and
Food Economics Institute, Agricultural
Research Service, U.S. Department of
Agriculture, Hyattsville, Md. 20782.
SOME NEW USDA PUBLICATIONS
(Please give your ZIP code in your return address when you order these.)
The following are for sale by the Superintendent of Documents, U.S. Government Printing
Office, Washington, D.C. 20402:
• SHADE TREES FOR THE HOME. AH 425. January 1973. 75 cents.
• SIMPLE PLUMBING REPAIRS FOR THE HOME AND FARMSTEAD. F 2202. February
1973. 15 cents.
• THE MARKET FOR FOOD CONSUMED AWAY FROM HOME: DOLLAR VALUE
STATISTICS. SB 491. September 1972. $1.00.
Single copies of the following are available free from the U.S. Department of Agriculture,
Washington, D.C. 20250. Please address your request to the office indicated.
From Office of Communication:
• LOW-INCOME HOUSES ... 2 OR 4 BEDROOMS, FRAME CONSTRUCTION, PLAN NO.
7189. M 1253. December 1972.
From Information Division, Food and Nutrition Service:
• PUBLICATIONS OF THE FOOD AND NUTRITION SERVICE. FNS 11. January 1973.
SUMMER 1973 21
POTASSIUM IN COMMON FOODS
by Elizabeth W. Murphy and Ann P. Mangubat
Potassium, one of the mineral elementr
required by humans, is among the most
plentiful minerals in the body. A person who
weighs 154 pounds has about 9 ounces of
potassium in his body. Potassium, and the
related mineral sodium, are needed to keep a
normal balance of water between the cells and
body fluids. Potassium plays an essential role in
the response of nerves to stimulation and in the
contraction of muscles. This important mineral
is also needed for proper functioning of cellular
enzymes.
Potassium is widely distributed in foods. The
usual daily intake in the United States is from
2 to 6 grams (2,000 to 6,000 milligrams),
enough to meet normal needs. The potassium
content of foods can be of concern, however, if
the physician prescribes a low- or
high-potassium diet.
Nutritionists and Extension workers may be
in contact with persons who need information
on the potassium content of foods. The table
on p. 23 lists some common foods in three
groups-those supplying 300 milligrams (mg) or
more of potassium per common household
22
measure, those supplying 100 to 300 mg per
measure, and those supplying less than 100 mg
per measure. As the table shows, meats, dry
legumes, vegetables, and fruits are generally
higher in potassium than are grain products and
many dairy products.
Some types of processing can result in
removing of considerable amounts of
potassium. For example, a cup of whole wheat
flour contains more than 400 mg of potassium;
a cup of all-purpose flour about 100 mg.
Brown sugar, containing about 750 mg of
potassium per cup, is a far richer source than
white sugar, with 6 mg per cup.
Some foods usually used only in small
quantities are among the richest sources of
potassium. Dry milk, soy flour, dark molasses,
dry brewer's yeast, cocoa powder, and many
spices contain more than 1,000 mg of
potassium in 100 grams (approximately 311z
ounces by weight) of the product.
Coffee and tea are low in potassium,
containing less than 100 mg per cup of
beverage.
FAMILY ECONOMICS REVIEW
HOUSEHOLD MEASURES OF FOOD AS SOURCES OF POTASSIUM
Potassium per household measure
Food group
300 mg and more 100-300 mg Less than 100 mg
Dairy products milk, whole, 1h pt ice cream, 8 fl oz egg, whole, one
and eggs milk, nonfat dry, cottage cheese, 1h cup
1.4 cup l-in cube
butter, 1 tbsp
Meat, Fish, beef frankfurter, one
Poultry (3 oz veal tuna, canned-in-oil
cooked, unless pork, fresh, roasted chicken, dark meat
otherwise beef liver ham, cured
stated) chicken, light meat whitefish
salmon, pink, canned
Vegetables and dry beans, cooked 1 lentils, cooked
legumes soy flour, defatted' cauliflower, cooked
(lh cup unless peanut butter, 3 tbsp broccoli, cooked
otherwise potato, one, baked brussels sprouts, cooked
stated) or boiled spinach, cooked
winter squash, cooked kale, cooked
sweetpotato, one carrots, cooked
medium, cooked tomato, 1h raw
Fruits and fruit banana, one medium grapefruit, 1h medium lemonade, limeade
juices (lh cup avocado, 1h medium1 apple, raw, one medium from frozen
unless other- cantaloupe, 1h medium orange, navel, one concentrate
wise stated) watermelon, wedge, medium
4 X8 in peach, raw, one medium
raisins, 1.4 cup pear, raw, one medium
dried prunes, cooked strawberries, raw
or uncooked Citrus juice, canned
dried apricots, cooked or frozen
or uncooked1 tomato juice, canned
dried peaches, cooked pineapple juice, canned
or uncooked1 or frozen
dried figs, 4 large
dried dates
prune juice
Grain products pie, apple, 1/7 of bread, one slice
(lh cup unless 9-in pie corn flakes, 2 oz
otherwise oatmeal, cooked
stated) farina, cooked
rice, white, cooked
macaroni, spaghetti, or
noodles, cooked
grits, cooked
pancakes, 2-3
doughnut, cake-type, one
cupcake, plain, one
cookies, plain, 5-6
Other foods molasses, dark, 2 tbsp. cocoa, 2 tbsp sugar, 1 tbsp
yeast, brewer's honey, 1 tbsp
2 tbsp salad oil, 1 tbsp
sherbet, 1 cup
1 More than 500 mg. potassium per common household measure.
Sources: U. S. Department of Agriculture, Agricultural Research Service, Composition of Foods, U. S. Dept. Agr.
Handbk. No. 8. Revised December 1963. For sale for $2 from Supt. of Doc., U. S. Govt. Print. Off.,
Washington, D.C. 20402. Also unpublished data from Consumer and Food Economics Institute.
SUMMER 1973 23
FRESH BEEF ADS AND PRODUCT NAMES
Newspaper ads for weekend beef specials
may mean confusion rather than helpful
information for the shopper trying to plan
menus and make store-to-store price
comparisons. USDA's Economic Research
Service studied ads of two or three retail food
chains in eight U.S. cities' from May 1971 to
April 1972. During the year, not one name for
steaks or roasts-even such widely recognized
ones as sirloin steak and chuck roast-was listed
the same way by all chains. Even within the
same chain, names varied considerably. In the
931 ads studied, there were 457 variations in
the names listed for fresh beef cuts-212 for
steaks, 151 for roasts, and 94 for other fresh
beef items.
Primal source, or what part of the beef the
cut is from, is important information for the
shopper. It provides clues on flavor, tenderness,
and cooking method. A large share of items
advertised did indicate primal source, often
because it was part of the item's name, such as
chuck, rib, and round steak. At other times, it
was shown in parentheses following the item's
name-as "california steak (chuck)."
Confusion resulted, however, from using the
same name for items from different primal
1 Boston, New York, Washington, Atlanta, Little
Rock, Cincinnati, St. Louis, and San Francisco.
24
cuts. Swiss steak, for example, was sometimes
listed without a primal source and at other
times as coming from the arm, shoulder, round,
and bottom round. Similarly, the primal source
of london broil was listed as chuck, shoulder,
and swiss round. According to some
authorities, london broil is not a cut, but a
method of preparing flank steak; yet, none of
the descriptions indicated flank as a source.
"Fanciful" cuts, often with no indication of
primal source, were often advertised. Names
for roasts included "pikes peak," "heart of
round," "face rump," and "swiss steak"
(round); names for steaks included "chicken,"
"manhattan," and "family."
Many ads failed to indicate whether items
were bone-in or boneless. This omission makes
it difficult for the shopper to determine the
possible number of servings per pound and,
therefore, the cost per serving.
Some consumer representatives have noted
the need for more restraint in naming meat
cuts. Thus far, two States-Massachusetts and
New York-have adopted regulations on meat
labeling.
Source: Witten, Rita B., "Fresh Beef Ads and
Product Names," MARKETING AND TRANSPOR­TATION
SITUATION. U.S. Dept. Agr., Econ. Res.
Ser., November 1972.
FAMILY ECONOMICS REVIEW
NEW CONSUMER PRICE INDEXES
BY SIZE OF CITY
The Bureau of Labor Statistics has
developed a new set of indexes that measure
price change in urban areas grouped by size of
population. They will be published four times a
year-March, June, September, and December.
As with indexes for individual cities, the
indexes for urban areas classified by size of
population cannot be used to determine
differences in price levels or living costs at a
point in time. They indicate only that in one
group prices have changed more, less, or the
same as in another.
Consumer Price Index, U. S. average and areas grouped by size of population, 1972
(1967=100)
All Apparel Transpor· Health
Population group' items Food Housing and tation and
upkeep recreation
United States ...... ... 125.3 123.5 129.2 122.3 119.9 126.1
3.5 million or
more .. . .... . . .. . . . 127.5 125.6 131.4 121.3 125.5 128.2
1.4 million to
3.5 million .......... 125.5 123.2 128.9 123.3 121.1 126.4
250 thousand to
1.4 million .. . ...... . 124.7 122.7 128.9 123.0 117.4 125.9
50 thousand to
250 thousand ....... 123.9 122.3 127.7 123.0 116.4 125.2
2.5 thousand to
50 thousand . .. ..... 122.9 122.0 126.5 121.8 116.1 123.3
'Based on 1960 Census of Population.
REVISED PRICE INDEX OF NEW HOMES
The price index of new one-family
homes-measuring changes in the sales prices of
houses that are the same in eight
characteristics-has been revised to reflect the
proportional distribution of houses sold in
1967 rather than those sold in 1964 and 1965.
The revised index also reflects some changes in
the statistical and editing procedures.
The revised annual data for the United
States and four regions for the period 1967
through 1972 are as follows:
SUMMER 1973
Year
1967 ..
1968 . .
1969 . .
1970 . .
1971 ..
1972 ..
United
States
100.0
105.1
113.6
117.4
123.2
131.0
100.0
108.2
117.7
124.1
134.4
143.8
100.0
105.7
115.7
116.2
119.8
126.6
100.0
104.0
111.4
116.7
124.6
131.1
West
100.0
103.4
111.6
114.9
117.4
125.5
Source: U.S. Department of Commerce, Bureau of
the Census, NEWS, January 10, 1973 and April 6,
1973.
25
CONSUMER PRICES
Consumer Price Index for Urban Wage Earners and Clerical Workers
(1967=100)
Group April 1973 I March 1973 I Feb. 1973
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
operations ...... ......... .
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 ...... .
130.7
136.5
136.4
137.0
132.8
138.1
123.0
143.6
125.1
128.3
125.5
123.6
125.8
125.9
126.0
129.7
122.6
120.3
143.9
129.2
136.2
123.8
125.2
128.2
Source: U.S. Department of Labor, Bureau of Labor Statistics.
129.8
134.5
134.2
135.7
132.3
137.7
1.22.6
143.2
124.6
127.8
125.0
123.0
124.8
124.6
125.1
128.7
121.5
119.1
144.5
128.6
135.8
123.1
124.5
127.6
128.6
131.1
130.1
134.7
132.0
137.3
122.1
142.9
124.1
127.2
124.5
122.6
123.6
123.3
123.3
127.6
121.1
118.7
144.3
128.1
135.3
122.4
124.3
127.1
Index of Prices Paid by Farmers for Family Living Items
(1967=100)
Item May April March Feb. Jan.
1973 1973 1973 1973 1973
All items ................... . 136 134 132 131 129
Food and tobacco ........... --- --- 131 ~·· -- Clothing ••••••••••••••• 0 •• --- --- 141 --- ---
Household operation ......... -·- --- 125 --- ---
Household furnishings ........ --- --- 122 --- --- Building materials, house ...... --- --- 148 --- ---
Source: U. S. Department of Agriculture, Statistical Reporting Service.
April1972
Dec.
1972
127
123
138
122
120
140
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
May
1972
124
---
---
---
---
---
26
FAMILY ECONOMICS REVIEW
COST OF FOOD AT HOME
Cost of Food at Home1 Estimated for Food Plans at Three Cost Levels,
April 1973, U. S. Average
Cost for 1 week Cost for 1 month
Sex-age groups•
Low-cost Moderate- Liberal Low-cost Moderate
plan cost plan plan plan cost plan
Dollars Dollars Dollars Dollars Dollars
FAMILIES
Family of 2:
20 to 35 years 3
•••••••• 0 ••• 21.90 28.00 34.40 94.70 121.80
55 to 75 years3
•• • 0 •••••••• 17.90 23.50 28.30 77.40 102.10
Family of 4:
Preschool children4 ••••••••• 31.70 40.60 49.30 136.90 175.90
School children 5
•••••••••• 0 36.70 47.30 58.10 158.80 205.20
INDIVIDUALS•
Children, under 1 year ........ 4.20 5.30 5.90 18.10 22.80
1 to 3 years ............... 5.40 6.80 8.10 23.20 29.40
3 to 6 years ............... 6.40 8.30 9.90 27.60 35.80
6 to 9 years ............... 7.80 10.00 12.50 33.60 43.40
Girls, 9 to 12 years ........... 8.80 11.60 13.50 38.20 50.20
12 to 15 years ............. 9.70 12.80 15.50 41.90 55.40
15 to 20 years ............ . 9.90 12.70 15.20 43.00 55.10
Boys, 9 to 12 years • 0 •••••• 0 0 9.00 11.80 14.30 39.10 51.10
12 to 15 years ............. 10.50 14.00 16.70 45.40 60.80
15 to 20 years ............. 12.20 15.60 18.90 52.80 67.70
Women, 20 to 35 years 0 0 ••• 0 0 9.30 11.90 14.30 40.10 51.60
35 to 55 years ............. 8.90 11.50 13.80 38.50 49.80
55 to 75 years ............. 7.50 9.90 11.80 32.40 42.90
7 5 years and over • 0 ••••• 0. 0 6.80 8.70 10.70 29.40 37.90
Pregnant . . ............... 11.00 13.90 16.40 47.50 60.10
Nursing .................. 12.60 15.80 18.40 54.50 68.50
Men, 20-35 years 0 •••••• 0 0 •• 0 10.60 13.60 17.00 46.00 59.10
35 to 55 years ............. 9.90 12.70 15.50 42.70 55.00
55 to 75 years ............. 8.80 11.50 13.90 38.00 49.90
75 years and over ••••• 0 •••• 8.20 11.10 13.40 35.50 48.20
Liberal
plan
Dollars
149.30
122.20
214.00
251.80
25.40
35.30
43.00
54.40
58.70
67.40
65.70
61.70
72.40
81.80
62.00
59.90
51.00
46.50
71.00
79.90
73.70
67.10
60.10
58.00
1 These estimates were computed from quantities in food plans published in Family Economics Review, October
1964. The costs of the food plans were first estimated by using the average price per pound of each food group
paid by urban survey families at three selected income levels in 1965. These prices were adjusted to current levels
by use of Retail Food Prices by Cities released periodically by the Bureau of labor Statistics.
2 Age groups include the persons of the first age listed up to but no including those of the second age listed.
3 Ten percent added for family size adjustment.
4 Man and woman, 20-35 years; children, 1-3 and 3-6 years.
5 Man and woman, 20-35; child, 6-9 and boy 9-12 years.
6 The costs given are for individuals in 4-person families. For individuals in other size families, the following
adjustments are suggested: 1-person--add 20 percent; 2-person--add 10 percent; 3·person--add 5 percent;
5-person--subtract 5 percent; 6-or·more-person--subtract 10 percent.
SUMMER 1973 27
CONTENTS
Page
Our New Look • • • · • • a • • • • • • • • • • • • • • • • • • • • • • • • • • o • • • • • • • • • • • • • • • • • • • • • • • • • • 3
National Issues in Welfare Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Alair A. Townsend
Flammability Standard Proposed for Children's Sleepwear, Sizes 7 through 14 . . . . . . . . . . 6
Nutrition Labeling for the Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Betty Peterkin
USDA Clothing Budgets for Children Are Published . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Financial Assets: The Changing Family Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Nancy Rudd
Factors to Consider in Selecting a Savings Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Nancy Rudd
The Older Population. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Social Security Amendments of 1972 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Computer Program-Budgeting for Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Potassium in Common Foods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Elizabeth W. Murphy and Ann P. Mangubat
Fresh Beef Ads and Product Names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
New Consumer Price Indexes by Size of City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Revised Price Index of New Homes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Regular Features
Some New USDA Publications
Consumer Prices ..........................................................
Cost of Food at Home .....................................................
21
26
27
'it US GOVERNMENT PRINTING OFFICE: 1973-728•212/663 3•1
28 FAMILY ECONOMICS REVIEW