Family Economics Review [1974, Number 4]

              A- 11,108: 47"1 4
PROPERTY OF THE
LIBRARY
NUV 6 1975
UNIVERSITY OF NORl H l,nKULINA
AT GREENSBORO
HIGHLIGHTS /FALL 1974
CLOTHING QUANTITY BUDGETS
FABRIC FLAMMABILITY
COST OF MEATS AND MEAT ALTERNATES
NATIONAL HEALTH INSURANCE
VARIABLE ANNUITIES
ENERGY PRICES
ARS-NE-36
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.
Authors are on the staff of the Consumer and Food
Economics Institute unless othawise noted.
Editor: Katherine S. Tippett Assistant Editor:
Consumer and Food Economics Institute
Agricultural Research Service
U.S. Department of Agriculture
Federal Building
Hyattsville, Md. 20782
WHO LACKS HEALTH INSURANCE COVERAGE?
One-fifth of all persons under age 65 in the
United States do not have any insurance to
help them defray the costs of medical care.
This includes many low-income families and
individuals, to whom cost is a major deterrent
to obtaining adequate health insurance protec­tion.
Also without coverage are persons
regarded as health risks by private insurers.
Although Medicaid has benefited many low­income
persons, about 9 million still are not
overed.
Among persons with health insurance many
o not have complete coverage of all costs of
edical care. Half the population under age 65
acks coverage for physician office and home
·sits. Even though Medicare pays for a large
roportion of the medical costs incurred by its
enrolled population, these elderly persons still
must bear large costs if they become ill. To
supplement their Medicare coverage in 1972,
about half of those over age 65 bought private
hospitalization insurance and slightly less than
half bought surgical insurance.
Not only do many persons have incomplete
insurance coverage for the broad spectrum of
medical care services, but many are not well
protected against very large medical expenses.
Major medical insurance-protection against
bills resulting from serious and prolonged ill­ness-
is held by only one-half of the U.S. popu­lation.
Source : Mueller, Marjorie Smith, Private Health
Insurance in 1972: Health Care Services, Enrollment,
and Finances, SOCIAL SECURITY BULLETIN,
37(2):20-40. 1974.
CLOTHING QUANTITY BUDGETS
by Virginia Britton
Quantity clothing budgets have been
eveloped by the U.S. Department of Agricul­ure
for various population groups by region
d urbanization. These quantity budgets com­lement
the Department's cost budgets that
ere published in the Summer 197 4 issue of
_AMIL Y ECONOMICS REVIEW. They pro­de
an additional set of tools useful in
aching management of resources in school
_d adult education programs, in counseling
th families on budgetary and management
roblems, and in action programs focused on
provement in the level of living of families.
oth sets of budgets are based on data on pur-ases
of clothing for individual persons from
e 1960-61 Survey of Consumer Expendi­.
es- the latest data available from a nation­de
. survey. Both sets of budgets reflect the
cttces, at the time of the survey, of groups
_Persons selected to represent a given level of
mg.
The quantity budgets are presented in terms
cost-equivalent amounts of representative
ms. A great variety of clothing items are pur­asect
annually for any specific group of
rsons · In o bta m. m. g survey m. format1. 0n,
similar items are customarily grouped together,
but still make a long list. In the 1960-61 Sur­vey,
clothing items for infants were grouped
into 27 types, clothing items for girls 2 to 15
years into 51 types, those for girls and women
16 years and over into 52 types, those for boys
2 to 15 years into 49 types, and those for boys
and men 16 years and over into 56 types. To
make the computation and presentation of the
quantity budgets feasible, clothing items (con­solidated
into 40 types for girls and women
and 35 types for boys and men) were classified
into six specific groups-outdoor wraps, outer
garments, underwear and nightwear, hosiery,
footwear, and hats and other clothing. A repre­sentative
item was chosen for each group. For
example, heavy winter coats are the representa­tive
item for girls' and women's outdoor wraps,
and jackets are the representative item for
boys' and men's outdoor wraps. The repre­sentative
items in each category are those for
which average expenditure was largest. The use
of a representative item for each category
makes it easier to compare budgets and makes
allowance for a greater range of individual taste
and for changes in fashion. Table 1 shows the
3
six clothing categories, the clothing items
included in each category, and the representa­tive
items chosen for each category.
After selection of the representative item
(for which the price per unit must be avail­able),
the cost-equivalent amount in terms of
the representative item was computed by
dividing the average expenditure per person for
a clothing category by the average price paid
by that group of persons for the representative
item. For example, the calculation for outdoor
wraps for a specific group-urban wives, 25 to
64 years, not employed, at the low-cost level in
the South-using the 1960-61 cost figures was
as follows:
Outdoor wraps
Average expenditure per person
for outdoor wraps= $3.37.
Average price paid for a
heavy winter coat= $38.33.
Cost-equivalent amount = 3.37/38.33
= 0.1 heavy winter coats.
For the remaining categories, the calculations,
stated more briefly, were as follows:
Outer garments
Cost-equivalent amount= 35.40/9.90
= 3.6 street dresses.
Underwear and nightwear
Cost-equivalent amount= 19.70/3.21
= 6 .1 slips, petticoats.
Hosiery
Cost-equivalent amount= 9.14/1.01
= 9.0 pairs of stockings.
Footwear
Cost-equivalent amount= 19.09/9.75
= 2.0 pairs of street
and dress shoes.
Hats and other clothing
Cost-equivalent amount= 13.46/4.63
= 2.9 handbags, purses.
The plan provides that money for a large pur­chase,
such as a winter coat, be accumulated
over several years. In practice, money may be
withdrawn from other clothing groups or from
4
clothing purchases of other family members
the year that the large purchase is made.
The economic levels of the quantity budgets,
as of the cost budgets published earlier, are
those at which families spent for food at the
levels of three USDA food plans-economy,
low-cost, and moderate-cost. Computation of
the Department's budgets for clothing at these
three levels was the same for the quantity and
the cost budgets, and was explained in the
Summer 1974 issue of FAMILY ECONOMICS
REVIEW. As noted there, the cost budgets
were updated to recent years, adjusting
expenditures for changes in price levels as
shown by the Apparel and Upkeep Indexes of
the U.S. Bureau of Labor Statistics.
The quantity budgets show the amounts of
clothing supplied by the cost budgets in
1960-61. Items and quantities of clothing pur­chased
generally change less rapidly than
prices. However, since prices have not risen
equally for all garments, the quantity budgets
provide only an estimate of the number of
items covered by the current cost budgets.
As examples of the quantity budgets, two
sets of budgets for the South at the low-cost
level are shown in tables 2 and 3. Table 2 is for
urban persons and table 3 for farm persons.
The budget quantities are relatively large for
children and young unmarried adults, moderate
for mature adults, and lower for persons 65
years and over. Rapid rates of growth, wear
and tear on garments, and developing fashion
interest help explain the higher amounts for
the young.
The full set of 33 tables of quantity budgets
by region, urbanization, and cost level is avail­able
upon request to the Consumer and Food
Economics Institute, Agricultural Research
Service, U.S. Department of Agriculture,
Federal Building, Hyattsville, Md. 20782.
Please give your ZIP code with your return
address.
Note: In Summer 1974 issue of FER p. 5 table 2
"Women's clothing budgets," change s~cond' boxhead
under Independent consumers to read : 25 to 64 years,
not employed.
FAMILY ECONOMICS REVIEW
T ble 1. -Garments included in clothing categories for infants, girls and women, and boys and men
(*Indicates representative items' )
Clothing Infants Girls and women Boys and men
category under 2 years
0 tdoor wraps *Snowsuits (North *Heavy winter coats *Jackets.
Central & Light coats, toppers, Overcoats.
Northeast). coat sets. Topcoats, coat sets.
*Coats (South & Snowsuits, skisuits, leggings, Snowsuits, skisuits,
West). ski pants. leggings, ski pants.
Buntings Jackets Raincoats.
Sweater suits Raincoats, rain capes
Fur coats, jackets, scarfs,
stoles, muffs.
0 ter garments *Playsuits, sun- *Street and school dresses *Separate trousers, slacks.
suits, overalls. Party dresses, semiformal , Year-round and winter
Dresses formal . suits.
Rompers Housedresses, smocks, dusters, Tropical suits, cotton
Suits pinafores. suits, and other.
Tee shirts, polo Suits Sport coats, separate jackets.
shirts. Matched separates and sets Vests.
Sweaters, sacques, Skirts, jumpers, culottes Work trousers, overalls,
jackets. Slacks, overalls, dungarees, coveralls, dungarees.
blue jeans. Shorts, sport and play
Shorts, sport and play clothing clothing..
Uniforms for work, school, Uniforms for work, school,
other. other.
Blouses, shirts, Tee shirts Dress shirts.
; Sweaters Sport shirts.
Work shirts.
Sweaters.
Ul erwear and
ightwear *Rubberized pants *Slips, petticoats *Undershorts, briefs.
Slips Undershirts Undershirts.
Undershirts, vests Panties, briefs Union suits, undershorts
Cotton underpants, Garter belts and undershirt sets.
training pants. Girdles, corsets Pajamas, nightshirts.
Diapers Brassieres Bathrobes, lounging robes.
Disposable diapers Union suits, snuggies
Sleeping garments Nightgowns, pajamas
Robes, wrappers Bathrobes, housecoats, negligees
Receiving blankets
Layettes
Hq ery *Stockings, socks *Socks, anklets, knee socks *Socks.
(girls under 12 years).
*Stockings (females 12 years
and over).
Fq wear *Booties, shoes *Street and dress shoes *Street shoes and boots.
Casual shoes Casual shoes.
Special sport shoes Special sport shoes.
Houseslippers, ballet slippers Work shoes, safety shoes.
Slipper socks Houseslippers.
Rubbers, galoshes, boots Slipper socks.
Rubbers, galoshes, boots.
Ha and other
othing *Caps, hoods, *Handbags, purses *Gloves.
bonnets. Hats Hats, caps, helmets.
Bibs Gloves Accessories.
Mittens, scarfs Accessories Jewelry and watches.
Jewelry Jewelry and watches Other clothing. - Other clothing Other clothing
: ~epresentative items: Those items frequently purchased for a group of persons (infants, all ages of females, or all
~f ~ales) for which average expenditure was largest in each category. Other items of equivalent money value may
,.. st1tuted. '"'1974 5
lJ
Table 2.-Clothing budgets: Quantity of annual purchases in terms of representative items
for 6 clothing categories, by sex-age groups: South, urban, low cost'
Sex-age groups Outdoor Outer Underwear Hosiery Footwear Hats and
wraps garments and nightwear other clothing
Number Number Number Number Number Number
of pairs of pairs
Snowsuits Playsuits, sun- Rubberized Stockings, Booties, Caps, hoods,
or coats suits, overalls pants (pairs) socks shoes bonnets
Infants under 2 years .... 0.5 7.7 18.6 3.9 1.7 1.3
Heavy Street and Slips, Socks or Street and Handbags,
winter coats school dresses petticoats stockings dress shoes purses
GIRLS AND WOMEN
Unmarried, living in
families:
2 to 5 years .. . ....... .6 7.1 5.1 7.5 2.7 2.1
6 to 11 years ...... . .. .6 8.8 5.9 8.8 3.7 3.1
12 to 15 years ........ .5 9.5 6.6 7.3 3.7 3.9
16 to 17 years ........ .5 8.1 6.5 11.6 3.8 4.9
18 to 24 years ........ .6 9.2 8.6 16.9 4.4 7.9
Married:
18 to 24 years,
not employed .. . .. .. .3 6.2 8.3 15.1 3.0 4.8
25 to 64 years,
not employed ....... .1 3.6 6.1 9.0 2.0 2.9
25 to 64 years,
employed .......... .3 4.0 7.6 16.8 2.4 3.6
Independent consumers,
25 to 64 years:
Employed •••••••••• 0 .5 5.0 5.9 15.0 2.6 2.6
Not employed •• 0 ••••• .3 3.1 5.6 9.6 1.9 1.1
65 years and over •• 0 •••• .2 1.4 3.3 5.6 1.0 1.2
Separate Undershorts, Street shoes Gloves
Jackets trousers, briefs (pairs) Socks and boots (pairs)
slacks (pairs)
BOYS AND MEN
Unmarried, living in
families:
2 to 5 years •• •• 0 •• 0 •• .8 10.2 15.2 7.1 2.6 2.2
6 to 11 years ......... .9 11.6 13.9 9.5 3.1 3.2
12 to 15 years •• 0 ••••• .7 11.1 11.3 10.6 .. 3.0 2.9
16 to 17 years •••••• 0. .8 11.0 10.5 10.0 2.3 4.4
18 to 24 years ........ 1.0 11.9 10.9 10.4 2.2 8.6
Married :
18 to 24 years 0 •••••• 0 .6 9.3 10.4 9.9 2.1 8.1
25 to 64 years ........ .5 7.2 10.5 8.2 1.4 10.7
Independent consumers, 25 to 64 years ....... .3 6.9 9.7 8.7 1.6 e)
65 years and over ....... .2 3.8 6.2 3.2 .6 4.7
1 Estimates based on data on purchases from the 1960-61 Survey of Consumer Expenditures by the U.S. Bureau
of Labor Statistics and the U.S. Department of Agriculture.
Budget levels: The economic levels of the budgets are those at which families spent for food at the levels of 3
USDA food plans-economy, low-cost, and moderate-cost.
Computation: The budgets for children under 16 years were based on the data for all children in families of
husband and wife with 1 to 5 children and no other persons. The budgets for unmarried persons 16 years and over
living in families, and for married adults were based on the data for persons in families of various types.
Independent consumers are persons living alone or in a household with others but independent financially-not
pooling income and expenditures. The group 65 years and over includes both independent consumers and family
members. Budgets are not shown for sex-age groups that had data on less than 30 individual persons.
2 Separate quantities could not be reported for this item. Computational difficulties were usually due to
unrepresentative purchase prices, low purchase rates, and other variations in the data.
6 FAMILY ECONOMICS REVIEW
Table 3.-Clothing budgets: Quantity of annual purchases in terms of representative items
for 6 clothing categories, by sex-age groups: South, farm, low cost1
Sex-age groups
~fants under 2 years ....
GIRLS AND WOMEN
pnmarried, living in
families:
2 to 5 years ......... .
6 to 11 years ........ .
12 to 15 years ....... .
16 to 1 7 years . . . . . . . .
18 to 24 years ....... .
~arried:
18 to 24 years,
not employed ...... .
25 to 64 years,
not employed ...... .
25 to 64 years,
employed ......... .
ndependent consumers,
25 to 64 years:
Employed .......... .
Not employed ....... .
I 5 years and over ...... .
BOYS AND MEN
1 nmarried, living in
families
2 to 5 years . .. ...... .
6 to 11 years ........ .
12 to 15 years ....... .
16 to 17 years ....... .
• 18 to 24 years ....... .
" arried:
18 to 24 years ....... .
'ri 2d5 to 64 years .. .. ... .
., ependent consumers
• 25 to 64 years . . . . '. . .
~ Years and over . .. ... .
Outdoor
wraps
Number
Outer
garments
Number
Underwear
and nightwear
Number
Snowsuits Pfaysuits, sun· Rubberized
or coats suits, overalls pants (pairs)
0.4 5.6
Heavy Street and
winter coats school dresses
.7
.7
.7
.5
.4
.3
.1
.2
.2
Jackets
.9
1.1
1.3
1.0
.8
.8
.6
9.2
10.7
11.7
9.9
8.8
4.2
3.5
4.9
1.3
Separate
trousers,
slacks (pairs)
9.6
11.4
12.7
10.9
11.6
6.4
3.2
18.3
Slips,
petticoats
5.6
6.9
9.6
9.4
8.7
8.8
6.8
8.6
3.0
Undershorts,
briefs (pairs)
15.2
14.6
13.0
11.3
12.5
10.4
6.2
Hosiery
Number
of pairs
Stockings,
socks
2.9
Socks or
stockings
9.3
9.8
8.6
11.1
14.3
7.0
7.4
11.7
4.6
Socks
7.1
9.1
10.6
11.4
10.2
8.7
4.4
Footwear Hats and
Number
of pairs
Booties,
shoes
1.6
Street and
dress shoes
3.0
3.5
4.2
3.7
4.1
2.8
2.5
2.6
1.3
Street shoes
and boots
2.8
3.2
3.2
2.7
2.4
1.9
1.2
other clothing
Number
Caps, hoods,
bonnets
1.0
Handbags,
purses
2.1
3.6
5.1
6.2
5.2
3.7
2.6
4.5
1.1
Gloves
(pairs)
2.3
3.4
5.8
8.0
10.5
14.1
7.4
( ~~stimates_ b~sed on data on purchases from the 1960-61 Survey of Consumer Expenditures by the U.S. Bureau
B bor Statistics and the U.S. Department of Agriculture.
1 ~Dudget levels: The economic levels of the budgets are those at which families spent for food at the levels of 3
CoA food ?lans-economy, low-cost, and moderate-cost. . . . .
j sbamputatlon_: Th~ budgets for children under 16 years were based on the data ~or all children m fam1hes of
1 in n_d and ~~fe With 1 to 5 children and no other persons. The budgets for unman:1ed per_s~ms 16 yea_rs and over
• ~j g In families, and for married adults were based on the data for persons m fam1hes of var1ous types.
• ~pen~ent consumers are persons living alone or in a household with others but independent financially-not
Ji 0 1~ mcome and expenditures. The group 65 years aQd over includes both independent consumers and family
1 tn rs. Budgets are not shown for sex-age groups that had data on less than 30 individual persons.
~
t
J1 LL 1974 7
u·-------------------~-----------------------
TEXTILE NEWS: FABRIC FLAMMABILITY
by Nancy G. Harries
The development of flame-retardant (FR)
fabrics to serve a wider variety of fabric end­use
products than currently covered by existing
flammability standards is a top priority of the
textile industry. There are predictions (though
not all industry representatives agree) that
within the next 5 years most, if not all, apparel
and many home furnishings products will be
covered by flammability standards. 1 The Con­sumer
Product Safety Commission, which is
responsible for the development of FR stan­dards,
2 is reported to have received strong
input from some consumer advocates and con­gressional
members about the slow develop­ment
of standards in the wearing apparel area.
Currently, the most stringent existing Federal
apparel standards cover children's sleep wear,
although other types of apparel are believed to
contribute significantly to bum injuries. Both
the Commission and the textile industry feel
pressure to develop additional flame-retardant
standards for nonsleepwear apparel as a result
of State standards that are ahead of those at
the Federal level.
Pressure is also on industry to develop the
technology that allows for increased FR fabrics
that are aesthetically acceptable, reasonably
durable and comfortable, easy to care for, and
not excessively expensive. That is a hard order
to fill, and flammability has been cited as the
single greatest challenge facing the industry
today.
FR Apparel Standards
Federal standards. Two new Federal Flamm­ability
standards are now on the books: The
first, established for children's sleepwear sizes
0-6X, became effective July 1, 1972. The
second, for children's sleepwear sizes 7-14, is
1 Although FR standards are under consideration in
the home furnishing and product areas, the emphasis of
this article will be on the development of apparel
standards and the technology necessary to meet them.
Home furnishings standards issued thus far under the
Flammable Fabrics Act include those for carpets and
rugs, small carpets and rugs, and mattresses. Other
products for immediate consideration include blankets
upho~tered furniture, draperies . and curtains, and
campmg tents.
2 Responsibility for fabric flammability standards
was formerly with the Department of Commerce.
8
scheduled to take effect May 1, 1975. Delays
in the passage of these standards have resulted
mainly from questions on the test methods for
evaluating flame retardancy.
The new standards for sizes 7-14 differ
mainly from those for sizes 0-6X in the testing
procedures required. Both standards require
manufacturers to perform char length tests on
oven-dry samples. However, the 7-14 standards
will eliminate a residual-flame time criterion
and a requirement that afterglow be counted as
bum time. The modified test procedure for
sizes 7-14 results from the assumption that
older children are more responsive in a fire­danger
situation than are younger children.
Several amendments to the standards for
sizes 7-14 have been proposed and were still
pending in August. These amendments include
modification of the oven-dry testing proce­dures
to allow 65 percent humidity in certain
of the test samples. This procedure would
enable wool garments to meet the standard.
Supporters of the amendement emphasize that
wool fibers typically contain moisture within
the fiber (due to their hygroscopic nature), and
to remove all moisture is unrealistic.
Other proposed amendments relate to the
need to further define the terms "date of
manufacture" and "in inventory or with the
trade." There have been problems over varying
interpretations of these terms in the 0-6X stan­dards.
A clearer definition of when the manu­facturing
process ends and of when imported
goods are ordered, shipped, and received, will
enable all affected parties to know which items
are subject to the standards. Under the Flamm­able
Fabrics Act, products, fabrics, or related
material subject to the standards that are in
inventory or with the trade as of the effective
date of the standard, are exempt from the stan­dard,
except when the Commission decides
that the items are so flammable as to be
dangerous.
Another proposed amendment relates to the
"affirmative" labeling of garments that comply
with the FR standards. This labeling contrasts
with the now expired "negative labeling" pro­vision
that required noncomplying sleepwear in
sizes 0-6X to be conspicuously labeled "flamm­able."
The new standard for sizes 7-14 calls for
FAMILY ECONOMICS REVIEW
permanent labels outlining wash-and-care
instructions and warning against use of certain
cleaning agents, such as nonphosphate deter­ents
and chlorine bleaches, which deactivate
FR finishes. There are differences of opinion as
0 what affirmative labels should include, and
ow long they should be required. For
stance, the American Apparel Manufacturers
sociation (AAMA) supports affirmative
abeling to eliminate confusion in the market
lace that was created by some of the negative
abeling requirements. However, AAMA does
ot support permanent labeling, stating that
he purpose is to help the consumer distinguish
tween complying and noncomplying goods
nly at the time of purchase. AAMA suggests
hat affirmative labels be required only for 2
ears, because after that period most all of the
ventory of noncomplying goods will have
en depleted.
These recommended amendments are con­oversial.
The Consumer Product Safety Com­ission
(CPSC) will make final recommenda-
'ons based on responses to their call for cem­ents
that were collected in spring 1974 from
dustry and consumer representatives.
With the final regulations for the children's
eepwear standards near completion, one
hase of flammability activity for the CPSC
ill be ending, and another phase beginning.
he Commission will have, for the first time
nee it inherited the responsibility for the
lammable Fabrics Act from the Department
Commerce, a chance to look at that Act to
termine what further areas require safety
andards. As a first step the Commission con­cted
a national fire incidence survey in April
74, to determine the frequency and nature of
e and burn-related injuries and to pinpoint
e hazards. Information from the survey may
ggest the need for further fabric flammability
ndards. However, many industry and fire-fety
representatives are stating that they
pe the survey will provide information about
urces of ignition-kitchen stoves, space
aters, and matches-and perhaps the need for
ndards for these items.
Another area for consideration is the con­bution
of garment design to burn injuries.
e. National Bureau of Standards (NBS) has
ehminary data indicating that loose-fitting
Pare! is a possible fire hazard. Additional
estigation is required to determine if some
LL 1974
garment styles are as great a fire hazard as the
fabrics from which they are made, and to see if
standards need to be developed.
State standards. Certain States are leading
the way in the passage of flammability stan­dards
that are more stringent than the Federal
flammability standards. This creates massive
problems for the textile industry which must
supply products that meet these varying stan­dards.
For example, Washington and Massachu­setts
already have legislation that covers
children's sleepwear sizes 7-14. California has
passed the most stringent standard yet­requiring
all children's wear, not just sleepwear,
sizes 0-14 to be flame retardant. These
California standards were originally scheduled
to become effective July 1, 1975, at which
time manufacturers were to meet the specifica­tions
or be required to use negative labeling.
However, as a result of industry appeals for an
extension, the date was extended. Industry
spokesmen unanimously agreed that industry
would be unable to supply more than 10 to 15
percent of the children's wear volume
ordinarily sold in California stores, unless they
used negative labeling. Negative labeling instills
fear and does not really solve the safety prob­lem.
The compromise worked out as acceptable
to California's State Fire Marshall's Office is
significantly less stringent than the originally
passed standard, but will give manufacturers
more time to develop new technology for
making garments flame-retardant. The revised
regulations became effective July 1, 1974, and
spell out several stages of implementation:
1. By July 1, 1975, all children's wear sizes
0-14 must meet either the Federal child­ren's
sleepwear flammability standards or
the existing much less stringent Federal
regulations for all apparel fabrics. The
Federal regulations for all apparel fabrics
require only that "highly flammable"
materials be removed from the market.
2. By July 1, 1976, all children's wear that
meets the Federal sleepwear standards
must bear a label saying they are flame
retardant (affirmation labeling).
3. By July 1, 1977, children's wear con­forming
only to the commercial stan­dards
will have to bear cautionary
warning labels (negative labeling).
9
4. By July 1, 1979, all children's wear 0-14
must meet the sleepwear or equivalent
standard. Manufacturers will not have the
option to continue the use of negative
labeling at that time. Legally, no noncon­forming
children's wear can be sold in
California markets after that date.
Much attention has been focused on the
California legislation since it may be paving the
way for the passage of more comprehensive
Federal standards. Regardless of what's ahead
in terms of Federal FR legislation, the more
stringent State requirements will have a nation­wide
impact on the availability of FR fabrics.
FR Technology
Although the technology for making prod­ucts
flame retardant has advanced very rapidly
in the last few years, the next 5 years should
bring even more sweeping changes for con­sumers.
As new FR standards are approved,
additional flame-retardant fibers and finishes
will become necessary.
Currently manufacturers are using both
topical finishes and flame-retardant fibers to
meet the increasing number of emerging FR
standards. 3 Topical finishes came out first and
are easier to commercialize, and are therefore
being used more-in terms of total yardage­than
FR fibers. However, that may change as
new developments are made in FR fibers,
which are believed to offer a greater flame­retardant
consistency and permanence than
topical finishes. Also, FR fibers are predicted
in the long run to be a lower cost source of
flame retardance than the topical finishes.
Topical finishes. Research is continuing in
the development of FR finishes for application
to fabric surface, in particular, to cotton and
cotton/blend fabrics. Cotton, a natural fiber
from plant sources, cannot be chemically modi­fied
in the fiber solution as can manufactured
or synthetic fibers. Flame retardancy has
continued to be approached through the
development of improved methods for
applying finishes to fabrics. Technological diffi­culties
remain, and present technology for
3 Woven producers have gone more to topical
fmishes warp knitters have tended to use flame­retarda~
t fibers, and circular knitters have proceeded in
both directions. (American' Fabrics Magazine, No. 99,
Winter 1973, p. 41.)
10
cotton products is not completely satisfactory.
Despite some controversial predictions that
100 percent cotton items will disappear as
most apparel becomes flame-retardant,
advances in FR cotton are reported with
increasing frequency. Many manufacturers of
cotton and cotton/blend products do not
forsee a decline in the cotton market. They
strongly suggest that 100 percent cotton jeans
are here to stay! Cotton, Inc., reports that
some all-cotton and high-cotton blends can
meet and exceed Government standards right
now and that a new technological break­thro~
gh has been developed by their corpora­tion
which prevents the loss of strength and
comfort that have been major limitations of
many FR cottons. Other textile companies
report that they see "better vehicles" on the
horizon for making cotton flame retardant. In
May 1974 the USDA reported two new FR
finishes for cotton products that pass the
Federal children's sleep wear standards and
provide the desired durability performance
expected for cottons. In general, fiber and
fabric representatives in the cotton market do
not believe that the increase of FR fibers will
threaten the consumption of cotton.
FR fibers. Manufactured fibers are currently
available that have flame-retardant properties:
High-temperature resistant nylon, fire-resistant
acetate and rayon, and the inherently fire-resis­tant
modacrylics and flame-resistant polyester
fibers. These FR fibers have benefited from the
demand for FR fabrics, particularly in child­ren's
sleepwear, industrial, and home furnish­ings
products. However, they do not provide
the answer for FR general wearing apparel or
for FR sleepwear. When other fibers, such as
cotton or polyester, are blended with these
types of fire-resistant fibers, the flammability
resistance of the resulting fabric may be dimi­nished
or destroyed. Blending has been used to
impart aesthetic, comfort, and care properties
that consumers want for general wearing
apparel. These properties are not found in the
use of the existing FR fibers alone. Polyester
FR fibers are predicted to have the greatest
potential for solving this problem. The need is
for an FR polyester which, when blended with
cotton, would result in a blended FR fabric
that would require no further FR finishing
treatments. Currently there is no technological
solution, but progress is being made. For
FAMILY ECONOMICS REVIEW
example, Du Pont has developed a flame­retardant
Dacron polyester that, when made
for commercial use, shows promise for FR
apparel.
The FR fibers discussed above have been
developed by modifying existing generic fiber
classifications. There are now new generic
classifications of fibers that have flame-retar­dant
properties. Within the past year, the
Federal Trade Commission has approved two
new generic names for fibers-aramid and novo­laid-
that have resistance to flame.
Aramid was established to cover two aroma­tic
polyamide (nylon) fibers manufactured by
DuPont, and all other fibers falling within this
new classification. Nomex-the trade name of
one of the fibers now classified as aramid-is an
FR fiber formerly in the nylon classification.
Since aramid fell under the past definition of
nylon, the FTC redefined nylon to exclude this
new type of fiber. Aramid and conventional­type
nylons differ significantly in both
chemical structure and physical properties and
are more costly to produce.
Novoloid was approved to cover a fiber
manufactured by The Carborundum Company
under the trade name Kynol.4 Novoloid has
remarkable resistance to heat and flame-it is
unfusible and nonflammable, substantially
unaffected by many acids, and insoluble in
organic solvents. FR fibers, particularly those
that are solution produced, have every indica­ion
of answering certain flammability techno­ogy
needs. Their development is a priority
esearch topic.
roblems Inhibiting the Expansion of FR
abrics
Even with new technology on the horizon,
4
~rad.e names and company names are used in this
ubhcat1?n solely for the purpose of providing
formation. Mention of them does not constitute a
arantee or warranty of the product by the U.S.
Partment of Agriculture or an endorsement by the
Partment over other products not mentioned.
two major difficulties must be overcome before
the consumer will accept FR fabrics as a stan­dard
characteristic of textile products: (1) The
increased price of FR products and (2) the
alteration of fabric properties, resulting in
decreased comfort, strength, aesthetic qualities,
and increased maintenance.
The price of FR children's sleep wear prod­ucts
is estimated to be as much as 25 percent
higher than for non-FR products. The price is
predicted to go beyond that (up to 50 percent
higher possibly) as new technology is
developed and implemented for nonsleepwear
apparel. The task of curbing prices will be
particularly complicated by the energy short­age.
Retailers and manufacturers claim that
whatever materials are available will likely go
into higher profit, less risk areas, where tough
flammability standards are not required.
Problems related to consumer acceptance of
FR products, at higher prices, include objec­tions
to the fabric "hand" or feel of certain FR
products and the decreased comfort that cer­tain
FR finishes impart. FR fabric maintenance
is further complicated in that the topical
finishes are diminished in effectiveness when
nonphosphate detergents are used. Federal
regulations require that FR finishes last
through 50 launderings. Environmental con­cerns
have encouraged consumers to avoid
high-phosphate detergents, which best maintain
FR qualities. Another problem is that FR
finishes are not now compatible with durable
press (DP) finishes. Will the consumer be
willing to sacrifice DP for FR? An answer to
these problems may well be found as FR fibers
are refined, since the problems of "hand,"
comfort, and fabric maintenance are thought
to be less with FR fibers than with FR topical
finishes.
Can the consumer expect most fabrics to be
flame retardant in the future? Quite probably,
as the technology for producing flame­retardant
fibers matures, and as topical finishes
are improved.
THE COST OF MEATS AND MEAT ALTERNATES
by Betty Peterkin
The meat, poultry, and fish items in meals
ually cost the most. However, the range in
sts of different types and cuts of meats is
LL 1974
great, so careful selection may result in worth­while
savings.
Estimated costs of 3-ounce servings of
11
cooked lean from selected types and cuts of
meat and of poultry and fish are shown in
table 1. The amount actually served might be
more or less than 3 ounces, of course, de­pending
on personal preference or on the size
of pieces, such as chicken parts, chops, or steaks.
In addition to replacing expensive types and
cuts of meat, poultry and fish with cheaper
ones, the economy-minded shopper can replace
some of the meats ordinarily used with alterna­tes
such as eggs, dry beans and peas, and
peanut butter. These foods are suitable replace­ments
for meat because they provide protein
and other nutrients for which meat, poultry,
and fish are valued. Cheese can also be used. It
can be counted on for most of the nutrients
found in meat except iron. Cheese is also a
good source of calcium while meat is not.
One way to determine good buys among
meats and meat alternates is to compare the
costs of amounts of them that provide equal
protein. Table 2 shows the cost of amounts of
some meats and alternates required to give 20
grams of protein-one-third of the recom­mended
allowance for a day for a 20-year old
man.
A 3-ounce serving of cooked lean meat from
beef, pork, lamb, veal, turkey, or fish provides
20 grams of protein or more. However, well
over a serving of some meats and meat prod­ucts
is required: 10 slices of bacon, 31h frank­furters,
or six 1-ounce slices of bologna, for
example. Amounts of some meat alternates
needed to provide 20 grams of protein are also
larger than the usual serving-more than a cup
of cooked or canned dry beans, a can of bean
soup, 4lh tablespoons of peanut butter, 3
ounces of American process cheese, or 3 eggs.
Because the protein of vegetable origin, such as
dry beans and peanuts, does not rate as high as
the protein from animal sources, it is a good
idea to have a little meat, egg, or milk at meals
with these foods.
The U.S. average price and the part of a
pound or other market unit required to provide
a 3-ounce serving of cooked lean meat (table 1)
or 20 grams of protein (table 2) are shown for
each meat and meat alternate for which costs
were compared. To figure a comparable cost
using a different price, multiply the price by
the part of a pound or market unit shown.
Table 1. -cost of 3 ounces of cooked lean from specified meat,
poultry, and fish at July 1974 prices
12
Food
Hamburger ................. .
Beef liver .................. .
Chicken, whole, ready-to-cook .. .
Chicken breasts ............. .
Turkey, ready-to-cook ........ .
Ocean perch, fillet, frozen ..... .
Ham, whole ....... . ........ .
Pork, picnic ....... ...... ... .
Ham, canned ............... .
Chuck roast of beef, bone in ... .
Haddock, fillet, frozen ........ .
Pork loin roast .............. .
Rump roast of beef, boned ..... .
Round beefsteak ............ .
Rib roast of beef .. ... .... ... .
Pork chops, center cut ........ .
Sirloin beefsteak ......... . ... .
Veal cutlets ....... ...... ... .
Lamb chops, loin ............ .
Porterhouse beefsteak ........ .
Retail
price per
pound 1
$0.90
.91
.52
.75
.66
1.08
.90
.72
1.52
.95
1.50
1.13
1.70
1.74
1.52
1.54
1.75
3.45
2.26
2.06
P~t~po~d Cod~
for 3 ounces 3 ounces
of cooked lean of cooked lean
.26 $0.24
.27 .24
.48 .25
.35 .26
.40 .26
.29 .31
.35 .31
.46 .33
.25 .38
.45 .43
.29 .43
.50 .57
.34 .58
.34 .59
.45 .68
.45 .69
.43 .75
.25 .86
.46 1.04
.52 1.07
1 Average retail prices in U.S. cities, Bureau of Labor Statistics; U.S. Department
of Labor.
FAMILY ECONOMICS REVIEW
Table 2. -cost of 20 grams of protein from specified meats and
meat alternates at July 1974 prices
Part of
Market Price per market unit Cost of 20
Food unit market to give 20 grams of
unit1 grams of protein
protein2
Peanut butter ...... . . ....... . 12 oz. $0.62 .23 $0.14
Eggs, large .................. doz. .62 .25 .16
Bread, white enriched ......... . lb. .35 .51 3 .18
Dry beans .... . .............. lb. .78 .24 .19
Chicken breasts ... ...... . .... lb. .75 .25 .19
Chicken, whole, ready-to-cook ... lb. .52 .37 .19
Beef liver ..... .... .......... lb. .91 .24 .22
Hamburger 0 ••••• • •• ••••• •••• lb. .90 .24 .22
Milk, whole fluid . . ........... half gal. .78 .29 4 .23
Turkey, ready·to-cook ......... lb. .66 .35 .23
Pork, picnic ......... ....... . lb. .72 .32 .23
Bean soup, canned ............ 11.5 oz. .26 .96 .25
Ham, whole ••• 0 ••••••••••••• lb. .90 .29 .26
Tuna, canned ••••• •• •• • 0 ••••• 6.5 oz. .59 .44 .26
American process cheese ....... 8 oz. .72 .38 .27
Ham, canned •• ••••••••••• 0 0. lb. 1.52 .24 .37
Frankfurters ••••• 0 ••••••••••• lb. 1.03 .36 .37
Sardines, canned .............. 4 oz. .40 .94 .38
Pork loin roast . .. ........ . ... lb. 1.13 .33 .38
Round beefsteak ............. lb. 1.74 .22 .38
Chuck roast of beef, bone in .... lb. 1.09 .35 .38
Ocean perch, fillet, frozen •• 0 ••• lb. 1.08 .36 .39
Liverwurst .... ......... ..... 8 oz. .68 .60 .40
Salami .. ............... .. .. 8 oz. .86 .50 .43
Rump roast of beef, boned ...... lb. 1.70 .26 .44
Sirloin beefsteak .......... ... . lb. 1. 75 .28 .49
Rib roast of beef ............. lb. 1.52 .33 .50
Bologna .. ......... ...... ... 8 oz. .71 .73 .52
Haddock, fillet, frozen .... ..... lb. 1.50 .35 .53
Pork sausage . . . . . . . . . . . . . . . . . lb . 1.02 .52 .53
Pork chops, center cut . . ....... lb. 1.54 .35 .53
Bacon, sliced • • • • 0 ••••••••••• lb . 1.09 .52 .57
Lamb chops, loin • • • • • • • • • • • • 0 lb . 2.26 .31 .69
Porterhouse beefsteak . . . . . . . . . lb . 2.06 .34 .69
Veal cutlets . . . . . . . . . . . . . . . . . lb . 3.45 .21 .74
1 Average retail prices in U.S. cities, Bureau of Labor Statistics, U.S. Department of
Labor.
ALL 1974
2 One-third of the daily amount recommended for a 20-year-old man. Assumes that all
meat, including cooked fat, is eaten.
3 Bread and other grain products, such as pasta and rice, are frequently used with a
small amount of meat, poultry, fish or cheese as main dishes in economy meals. In this
way the high quality protein in meat and chese enhances the lower quality of protein in
cereal products.
4 Although milk is not used to replace meat in meals, it is an economical source of good
quality protein. Protein from nonfat dry milk costs less than half as much as from whole
fluid milk.
13
SOME NEW USDA PUBLICATIONS
(Please give your ZIP code in your return address when you order these.)
The following is for sale by the Superintendent of Documents, U.S. Government Printing
Office, Washington, D.C. 20402:
• SOYBEANS IN FAMILY MEALS. G 208. June 1974. 35 cents.
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:
• BETTER LAWNS. G 51. Revised May 1974.
• LAWN DISEASES-HOW TO CONTROL THEM. G 61. Revised December 1973.
From Economic Research Service, Division of Information:
• MOTHERS' ATTITUDES TOWARD COTTON AND OTHER FIBERS IN
CHILDREN'S LIGHTWEIGHT CLOTHING. MRR 1026. July 1974.
From Information Division, Food and Nutrition Service:
• PUBLICATIONS OF THE FOOD AND NUTRITION SERVICE. FNS 11. May 1974.
• FOOD BUYING GUIDE FOR CHILD CARE CENTERS. FNS 108. May 1974.
From Farmers Home Administration. "S" after number donates Spanish. English version also
available:
• HOME OWNERSHIP. PA 977-S. March 1974.
• RURAL RENTAL HOUSING. PA 1039-S. April1974.
• RURAL HOUSING REPAIR LOANS. PA 1058-S. April1974.
NATIONAL HEALTH INSURANCE: ISSUES FOR CONSUMERS TO CONSIDER
by Kristin L. Kline
Currently before the Congress is the issue of
national health insurance. 1 Legislative pro­posals
range from a plan giving nearly complete
coverage of medical care costs, paid for
through a social insurance mechanism, to a
plan granting tax credits to families and indivi­duals
for purchase of insurance policies pro­viding
specified benefits. All attack the prob­lem
of meeting the costs of medical care for all
Americans. 2 Four representative plans are pre­sented
in the table on pages 16 to 18. The
table focuses on issues of direct concern to
consumers-persons covered, benefits, costs,
and administration (regulations and controls).
Questions consumers need to ask in evaluating
1 Status when FER went to press on September 23,
1974.
2 For information on "Who Lacks Health Insurance
Coverage," see p . 3.
14
any national health insurance plan are: Who is
eligible? What is the benefit package? What will
it cost consumers, directly as well as through
the financing mechanism? Does the plan limit
cost increases and regulate quality of medical
care services?
Persons Covered
An issue of primary concern to consumers is
determining eligibility for coverage under
national health insurance. Is participation com­pulsory
or voluntary? Is coverage universal or is
eligibility based on age, income, employment
status, or level of medical risk? An advantage
to consumers of compulsory, universal cover­age
is ease of determining eligibility: everyone
is eligible. However, maintaining freedom of
choice in obtaining and paying for medical care
is a serious consideration.
FAMILY ECONOMICS REVIEW
If participation is voluntary, individuals and
families need sufficient information to evaluate
costs and benefits and to decide if they want to
participate. If eligibility is based on employ­ment
experience,3 some of the population­including
many of those least able to purchase
adequate private insurance-will not have the
option of being covered under national health
insurance.
Benefits
Questions in evaluating the benefit package
include: Which services are covered and which
are not? Does the plan establish a standard set
of benefits for all insured persons? Are costs of
services covered in full, or are out-of-pocket
outlays required? Are limits placed on amounts
of services? The treatment of preventive care
services in the benefit package is a complex
issue. While including these services could
promote better health, there is concern that
without adequate controls higher taxpayer
costs might result. To require substantial out­of-
pocket outlays, however, might deter many
persons from obtaining preventive care and
early diagnosis.
Cost
It is important for families and individuals to
be able to determine their costs for medical
care under any national health insurance plan.
Not only do they have to assess liability for
out-of-pocket expenditures (premiums, deduc­tibles,
coinsurance, cost of noncovered serv­ices),
4 but also the impact of the financing
mechanism. The cost of time spent in acquiring
3
T? be eligible, persons must be insured or receiving
nef1ts under social security. Currently insured are
rsons who have social security credit for at least 1112
ears of work within a 3-year period . To be fully
nsured, persons need at least one quarter of coverage
0ftr each calendar year elapsed after 1950 or if later
er th e year m· which they attained age 21 u' p to the'
;s~ ~hey become entitled to benefits. T~ be fully
4 ~ • a P~rson must have worked for 10 years.
ften _Premi.um. ~ayment is the consideration paid,
nee {J! penod1c ms~all~ents, f?r a contract of insur­f-
· hen a deductible Is required a person pays out­rocket
all the initial cost up to a specified amount
. ore benefits under insurance are provided. A
uIt-nsuf rance requ·i rement means that a person must pay
Pen~ fPocket . some fixed percentage of each dollar
ut-of- or medical. services. A copayment means paying
of poc~et a fixed dollar amount for each item or
ian vi::;:)~ce (for example, drug prescriptions or physi-
ALL 1974
medical care services is another concern.
Adoption of a national health insurance plan
might increase time costs to consumers if
demand for medical care services increases and
supply does not.
Determining family financial obligation for
medical costs might not be simplified by a shift
to national health insurance if there are several
benefit packages or several systems of cost
sharing, each applying to a different group of
persons. On the other hand, a plan that allows
for ease in estimating family financial responsi­bility
might not eliminate the financial hard­ship
related to obtaining medical care.
Administration
Financing. Potential sources of funds for
financing national health insurance are pre­mium
payments, payroll taxes, and general
Government revenues. By retaining substantial
cost sharing under national health insurance,
the proportion of the cost financed through
taxes could be reduced. The proportion of
income that individuals and families pay for
health care may also be of concern.
Regulations and controls. It is important for
consumers to know if a plan provides for con­tainment
of medical care costs and includes
features designed to assure maintenance of the
quality of medical care services. To consumers,
adequate controls could mean the difference
between receiving high quality medical care at
reasonable prices and receiving a lower quality
of care at steadily increasing prices.
Sources: Cavalier, Kay, and Richard Price,
NATIONAL HEALTH INSURANCE: A SUMMARY
OF MAJOR LEGISLATIVE PROPOSALS INTRO­DUCED
INTO THE 93RD CONGRESS PART I, Con­gressional
Research Service, Library of Congress,
Washington, D.C., 1973. U.S. Department of Health,
Education, and Welfare, Social Security Administra­tion,
NATIONAL HEALTH INSURANCE PRO­POSALS:
PROVISIONS OF BILLS INTRODUCED IN
THE 93RD CONGRESS AS OF FEBRUARY 1974,
1974.
Note: For more discussion and information on current
national health insurance proposals, see NATIONAL
HEALTH INSURANCE PROPOSALS: PROVISIONS
OF BILLS INTRODUCED IN THE 93RD CONGRESS
AS OF FEBRUARY 1974; and U.S. Congress, House
of Representatives, Committee on Ways and Means,
NATIONAL HEALTH INSURANCE RESOURCE
BOOK, 1974. The publications are for sale for $2.10
and $5.20, respectively, by Superintendent of Docu­ments,
U.S. Government Printing Office, Washington,
D.C. 20402.
15
FOUR NATIONAL HEALTH INSURANCE PROPOSALS'
Item
PERSONS
COVERED:
BENEFITS:
a. Hospital
care.
b. Care in
skilled nurs­ing
facility.
c. Physicians'
services.
Plan I
Compulsory
Single comprehen­sive
Federal system
to cover all U.S.
residents.
(Medicare would be
abolished.)
a. No limit
b. 120 days per
year.
c. No limit
d. Dentists' d. For children
services. under age 15; sched­uled
extension to
age 25; eventually
to entire population.
e. Services of e. No limit
other health
professionals.
f. Laboratory f. No limit
and X-ray.
g. Home health g. No limit
services.
h. Family
planning,
maternity
care, well­child
care.
i. Prescrip­tion
drugs.
h. No limit
L As needed for
chronic illness and
other specified dis­eases.
j. Medical sup- j. No limit
plies, appli-ances,
and
ambulance
services.
k. Additional
services.
16
k. Optometrists'
services and eye­glasses.
Plan II
Compulsory
General plan: all U.S.
residents (not eligible for
Medicare) contributing to
the health insurance sys­tem;
includes all persons
fully or currently insured
for purposes of so cia!
security ,1 persons not eligi­ble
under Medicare but
recetvmg social security
cash benefits, plus depend­ents
of all such persons,
and persons receiving aid
to families with dependent
children.
Medicare: for the elderly. 3
Long-Term Care Services
program: additional volun­tary
coverage for Medicare
eligibles.
General plan:
a. No limit
b. 100 days per year
c. No limit. Physical
checkups and immuniza­tions
excluded.
d. For children under 13
e. No limit on physical
therapy. Podiatrists' serv­ices
limited for persons
age 6 and over.
f. No limit
g. 100 visits per year
h. No limit except well­child
care limited to chil­dren
under 6.
i. No limit, but subject to
separate copayment.
j. No limit; ambulance
service regulated.
k. Eyeglasses, eye exams,
hearing aids, and ear exams
for children under age 13.
Plan III
Voluntary
Employee plan: full-time
employees (and depend­ents),
including employees
of state and local govern­ments.
Assisted plan: low-income
families, employed or non­employed;
also, families
and employment groups
who are high medical risks.
Plan for aged: aged persons
insured under social secu­rity.
Employee, Assisted, and
Medicare plans:
a. No limit
b. 100 days per year
c. No limit. Physical
checkups and immuniza­tions
excluded.
d. For children under 13
e. Limited
f. No limit
g. 100 visits per year
h. Well-child care in­cluded
for children
under 6. Family planning
and maternity care regula­tions
to be written at
future time.
i. No limit, but subject to
separate deductible.
j. No limit; ambulance
service regulated.
k. Eyeglasses, eye exams,
hearing aids, and ear exams
for children under 13.
Plan IV
Voluntary.
Catastrophic Illness Plan:
for all persons (and theh
dependents) insured or
receiving benefits under
social security.
Medical Assistance plan: for
low-income persons.
Medicare: continued for
the elderly.
Castastrophic plan:
a. Coverage begins aft!!
first 60 days, unlimit~
additional days cover~ ;
$21 per day copayment.
b. 100 days, available to
persons who received catas·
trophic hospital benefits;
$10.50 per day copay·
ment.
c. Payable after familY
has incurred $2,000 in
medical expenses in year;
20 percent coinsurance.
d. None.
e. None.
f. Same as c.
g. Same as c.
h. None.
i. None.
j. Same as c.
k. None.
FAMILY ECONOMICS REVIE'
~ Item
BENEFITS­Continued
COSTS:
Premiums
FOUR NATIONAL HEALTH INSURANCE PROPOSALS 1 -continued
Plan I
None
No specified cost
sharing.
Tax on payroll (em­Ployers
3.5 percent
and employees 1.0
Percent), self-em­ployed
(2.5 per·
cent), and unearned
income (1.0 per­cent)
and Federal
Plan II
Medicare (changes): no
limits on outpatient drugs
and biologicals and on
hospital inpatient days.
Long-Term Care includes
the following services:
home health; homemaker;
nutrition; long-term insti­tutional
care; day care and
foster home; and com·
munity mental health
center outpatient.
General plan: none
Medicare: part A same as
at present, $36 per month
only for elderly persons
not insured under social
security; Supplementary
Medical Insurance (SMI,
part B), $6.70 per month.
Long-Term Care: $6 per
month.
General plan: deductible of
$150 per person annually
(maximum of 2 deduc­tibles
per family) and 25
percent coinsurance. Co·
payment of $1 per out­patient
drug or biological.
Total cost sharing limited
to $1,000 annually per
family (not including co·
payment for outpatient
drugs and biologicals). Re·
duced cost sharing for
low-income families. No
deductible for maternity
care, well-child care, family
planning services, and
special care for children
under age 13.
Medicare: deductibles and
ooinsurance as currently
paid. Total cost sharing
limited to $1,000 per
family. Deductible and co­insurance
obligation termi­nated
in case of illness or
tnJury. Deductible for
blood eliminated. Drug co­payment
same as in general
plan.
Long-Term Care: none
General plan: tax on pay­roll
(employers 3.0 percent
and employees 1.0 per­cent),
self-employed (2.5
percent), and unearned in·
oome (2.5 percent), and
Federal general revenues
(equal to total receipts
Plan III
Employee plan: employer­employee
premium pay­ments,
employer pays 75
percent Insurance
through private carriers.
Assisted plan: enrollee pre·
mium payments according
to family income (lowest
income groups none).
Plan for aged: same as
Medicare under Plan II, but
no premiums for low·
income aged.
Employee plan: deductible
of $150 per person annu­ally
(maximum of 3 deduc­tibles
per family) and 25
percent coirtsurance. Addi­tional
$50 deductible for
outpatient drugs and bio­logicals.
Total cost sharing
limited to $1,500 annually
per family ($1,050 for
individuals).
Assisted plan: maximum
oost sharing as in employee
plan, but reduced accord·
ing to individual or family
income.
Plan for aged : deductible
of $100 per person and 20
percent coinsurance, but
total cost sharing limited
to $750 per person annu­ally.
Reduced cost sharing
according to individual in­come
for low-income
elderly.
Employee plan: employer­employee
premium pay­ments.
Assisted plan: premium
payments by enrollees and
Federal and State general
revenues.
Plan IV
Medical Assistance plan:
same benefits as Catas·
trophic plan, but no limits
on amount of services and
no cost sharing, except:
hospital inpatient, 60 days;
physicians services, $3 co­payment
for first 10 visits
per family. Includes: inter­mediate
care facility serv­ices;
maternity and well­baby
care; family planning;
periodic exams for children
under 18. Pap smear and
immunization regulations
to be written at future
time.
Medicare: same as cur­rently.
Catastrophic plan: none.
Medical Assistance plan:
none.
Medicare: same as under
Plan II .
Catastrophic plan: total co­insurance
limited to
$1,000 annually per per·
son. See other cost sharing
stipulations under Benefits.
Medical Assistance plan:
pays full cost of benefits
under Catastrophic plan for
Medical Assistance recip­ients
not covered by the
catastrophic plan, and nec­essary
cost sharing for
those who are covered.
Would pay Supplementary
Medical Insurance pre­mium
for eligible elderly
persons. Cost sharing
limited to that specified in
Benefits.
Medicare: deductibles and
ooinsurance as currently
paid.
Castastrophic plan: special
tax (0 .4 percent) on wages
and self-employment
income subject to social
security tax.
Medical Assistance plan:
State and Federal general
revenues.
17
FOUR NATIONAL HEALTH INSURANCE PROPOSALS' -continued
Item
COSTS­Continued
Financing
Rates of re­imbursement
to providers.
ADMIN-ISTRATION:
Administra­tive
frame­work.
Regulation
of medical
care pro­viders.
Regulation
of insurance
carriers.
Plan I
general revenues
(equal to total re­ceipts
from taxes).
Income subject to
tax: first $15,000
annually for individ­uals:
total payroll
for employers.
National health
budget established
and funds allocated,
by type of medical
services, to regions
and local areas.
Federal government
administers program
through special
board in DHEW,
with regional and
local offices to oper­ate
program.
Standards same as
Medicare, but with
additional require­ments.
Physicians
must meet national
standards.
Records of all
providers subject to
review by regional
office. Providers can
be directed to add
or reduce services,
provide services in a
new location.
Not applicable
Plan II
from taxes). Income sub­ject
to tax: first $20,000
annually for individuals:
total payroll for employ­ers.
Reduced cost sharing
by low-income persons:
financed from Federal
general revenues with con­tributions
from States.
Medicare: social security
payroll taxes and premiwns.
Long-Term Care: pre­miums
and Federal and
State general revenues.
Rates established under
supervision of Federal
government. Institutional
providers must accept re­imbursement
at established
rate as payment in full.
Physicians and other pro­fessionals
reimbursed by
fee schedules established
by the professions (subject
to adjustment by Social
Security Administration):
however can charge fees
higher than established
rate, but must collect extra
charges from patients.
Independent Social Secu­rity
Administration directs
administration of program
through private insurance
companies.
Federal standards for par­ticipation,
subject to con­sultation
with States. State
agencies determine com­pliance.
Services provided under
program subject to review
by Professional Standards
Review Organization
(PSRO), as stipulated
under 1972 amendment to
Social Security Act.
Quality management pay­ments
to serve as incentives
for providers to control costs.
Voluntary system for
approval of supplemental
private insurance policies.
Plan III
Plan for aged: social secu­rity
payroll taxes and pre­miums,
to be supple­mented
by Federal and
State general revenues.
Rates established by
States, according to Fed­eral
procedures and crite­ria.
''Full participating"
providers (includes all
hospitals and skilled
nursing facilities) must
accept State rates, in­cluding
cost sharing, as
payment in full. "Associate
participating" providers
could charge more than
State rate for employee
plan patients, but must col­lect
extra charges and cost
sharing from patients.
Employee plan: insurance
through private carriers (or
self-insured arrangements)
supervised by States, under
Federal regulations.
Assisted plan: administered
by States through private
carriers under Federal reg­ulations.
Plan for aged: administered
by Federal government in
way similar to present
Medicare program.
Standards for participation
in program established by
States.
Services provided under
program subject to review
by Professional Standards
Review Organization
(PSRO), as stipulated
under 1972 amendment to
Social Security Act.
By State, including ap­proval
of premium rates,
enforcement of disclosure
requirements, audit, and
protection against
insolvency of carriers.
Plan IV
Medicare: social security
payroll taxes and pre­miums.
Same as Medicare. For
Medical Assistance program
physicians and other pro­viders
must accept plan's
payment as payment in
full.
Administered through
Medicare program, under
which private carriers
handle claims and pay pro­viders
of services.
Standards same as Medi­care.
Also, intermediate
care facilities must be
licensed by State and meet
additional requirements.
Services provided under
program subject to review
by Professional Standards
Review Organization
(PS RO), as stipulated
under 1972 amendment to
Social Security Act.
Certification by DHEW of
health insurance policies
voluntarily submitted by
private carriers.
1 Plan I: Kennedy-Griffiths, The Health Security Act of 1973 (H.R. 22,S.3). Plan II: Kennedy-Mills, The Comprehensive National
Health Insurance Act of 1974 (H.R. 13870,S.3286). Plan III : Mills-Schneebeli, The Comprehensive Health Insurance Act of 1974
(H.R. 12684,S.2970). Plan IV: Long-Ribicoff, The Catastrophic Health Insurance and Medical Assistance Reform Act (5.2513).
2 See footnote 3 in text.
3 For a description of the current Medicare program see National Health Insurance Resource Book, House of Representatives,
Committee on Ways and Means (Washington, D.C. : Government Printing Office, 1974), pp. 429-433.
18 FAMILY ECONOMICS REVIEW
BLS URBAN FAMILY BUDGETS-AUTUMN 1973
The Bureau of Labor Statistics' (BLS) three
hypothetical budgets for a family of four
ranged from $8,181 a year at the lower level to
$12,626 at the intermediate level and $18,201
at the higher level in autumn 1973 (see table).
Between autumn 1972 and autumn 1973 the
lower budget rose 10.8 percent, the inter­mediate
budget 10.3 percent, and the higher
budget 9.9 percent. The costs are for an urban
family of four: A 38-year-old husband, his wife
who is not employed, a boy of 13, and a girl of
8. The budgets illustrate three different levels
of living based on estimates of costs for
different specified types and amounts of goods
and services rather than actual expenditures by
families.
Budgets covering consumption items-food,
housing, transportation, clothing, personal
care, and medical care-were updated by apply­ing
changes in the Consumer Price Index to
autumn 1972 costs for each main class of
goods and services. At each budget level, the
rise in food costs was more than triple the
increase in any other consumption component.
The change in food costs was greatest in the
higher budget because this budget includes
larger quantities of meat, poultry, and fish for
which prices increased most sharply over the
period. However, the increase in food prices
over the year had the greatest impact on the
lower budget because food comprises a sub­stantially
larger portion of the total cost of
consumption at this level than at the higher
levels.
Estimated annual costs of consumption for
families of different size and composition, and
the costs for 39 metropolitan areas and four
nonmetropolitan areas are available in BLS
News release USDL-74-304, June 16, 1974.
Table 1. -Annual budgets at 3 levels of living,
urban United States, autumn 1973
Component Lower Inter· Higher
mediate
Dollars Dollars Dollars
Total budget ....... 8,181 12,626 18,201
Family consumption:
Food ............ 2,440 3,183 4,020
Housing ......... 1,627 2,908 4,386
Transportation .... 563 1,014 1,315
Clothing ......... 696 995 1,456
Personal care ...... 205 275 390
Medical care 0 ••••• 660 664 692
Other family
consumption .... 389 722 1,191
Total family ---
consumption .... 6,580 9,761 13,450
Other items ........ 385 611 1,024
Taxes:
Social Security and
disability tax .... 492 647 647
Personal Income
taxes .......... 724 1,607 3,080
--
1,216 2,254 3,727
NUTRIENT DATA TAPES HAVE NEW SUPPLIER
The availability of punched cards and
agnetic tapes containing food composition
ata expanded from COMPOSITION OF
OODS (Agriculture Handbook No. 8) was
nounced in the December 1972 issue of
AMIL Y ECONOMICS REVIEW. These data
ts now have a new supplier. No revisions have
~ made in any of the sets, however.
ata sets are for sale by Action Data Proces-sing,
Inc., 817 Silver Spring Avenue, Silver
Spring, Md. 20910. Requests for orders should
be directed to the supplier. Inquiries about the
data should be addressed to Survey Statistics
Group, Consumer and Food Economics Insti­tute,
Agricultural Research Service, U.S.
Department of Agriculture, Room 329, Federal
Building, Hyattsville, Md. 20782.
19
VARIABLE ANNUITIEs-RETIREMENT INCOME WITH GROWTH POTENTIAL
by Nancy Rudd
Chronic inflation-the continuous decline in
purchasing power of the dollar-creates many
kinds of budgeting problems for families. One
of the most difficult to solve, however, is that
of saving for retirement. Dollars saved today
will not only buy much less by the time they
are needed, but in addition, may have to last
longer than presently anticipated because of
increasing life expectancy. One approach to
dealing with this problem is to put some
savings into investments whose value may
increase with increases in the cost of living.
One such investment, and one which has
become widely available only in the past few
years, is the variable annuity-a program
designed to provide retirement income with
growth potential.
Variable annuity plans differ from more
familiar fixed annuity plans as follows: A fixed
annuity plan guarantees the annuitant (person
receiving the annuity) a specified amount of
dollar income per month or year (the annuity)
for the rest of his life (or some other time
period depending on contractual arrange­ments).
The purchasing power of the annuity
may decline if the cost of living increases, but
the dollar value never changes. The insurance
company (or other carrier of the plan) invests
its income from purchase payments in fixed­return
assets, such as bonds and mortgages, and
assumes the risk of loss if its investments fail to
provide sufficient income for it to meet its con­tractual
obligations.
In a variable annuity plan this risk shifts to
the annuitant. When an individual purchases a
variable annuity contract, he is, in effect, pur­chasing
shares in a mutual fund. His purchase
payments, along with those of others, are
invested in a selection of corporate stocks
(called the annuity fund or account) with
apparent potential for long term growth, and
he, rather than the company, loses if the value
of the stocks goes down instead of up.
Pay-In or Accumulation Period
A variable annuity may be purchased in a
single payment or in a series of payments. It is
generally purchased during the working years
20
with the pay-out period scheduled to begin at
retirement. Part of each purchase payment is
deducted by the company to cover its sales and
administrative expenses, the expense of paying
a minimum death benefit (should the prospec­tive
annuitant die before his annuity payments
begin), and the risk it takes that life expec­tancy
may increase thereby increasing the
length of time the company will have to make
annuity payments. Some States and municipali·
ties levy a tax on the purchase payment which
is also deducted. The remaining part of the
payment is used to purchase accumulation
shares in the annuity fund. At the time a vari·
able annuity fund is established, these shares
are arbitrarily valued at some amount such as
$1.00. Thereafter, their value fluctuates with
the investment experience of the fund. Conse·
quently, when a variable annuity is purchased
with a series of equal payments, the payments
will not always purchase the same number of
accumulation shares. The number of shares
owned by a person is not affected by changes
in their value. A variable annuity contract
holder can redeem, at their current value, some
or all of his shares during any time before com·
mencement of his annuity payments.
Pay-Out or Annuity Period
The dollar amount of variable annuity pay·
ments during the pay-out period depends on
the dollar amount of the first annuity pay·
ment, the number of annuity units reflected by
that payment, and the investment experience
of the fund. The dollar value of the first pay·
ment depends on the contract owner's life
expectancy, the annuity option selected, the
assumed rate of interest, and the dollar value of
the contract owner's accumulation shares.
The contract owner's life expectancy, for
purposes of computing his annuity payment, is
the life expectancy of persons of his age and
sex at the time he purchases his contract, that
is, begins making purchase payments. This
"mortality guarantee," as it is called, means
that his annuity payments cannot be reduced if
life expectancy increases.
The annuity option selected determines
FAMILY ECONOMICS REVIEW
whether any rights to the annuity are guar­anteed
to a beneficiary when the annuitant
dies. A life annuity that does not guarantee a
certain number of payments provides no
survivor's rights and pays the largest initial
annuity payment. A life annuity with a certain
number of payments guaranteed, such as 120
or 180, pays the annuitant's beneficiary the
remaining guaranteed payments if the annu­itant
dies before receiving them. A joint and
last survivor annuity is payable to two parties
and then to the survivor (generally at a reduced
level). Companies differ with regard to options
offered so the above list is merely repre­sentative
of the possibilities. In all cases, how­ever,
selection of any option which guarantees
payments to an annuitant's survivor reduces
the initial annuity payment by an amount
consistent with the magnitude of the guar­antee.
The assumed rate of interest is the annual
rate at which the value of the fund is assumed
to grow. Most companies set this rate at 31/2
percent. Some States permit annuity contract
owners to use a different interest rate
assumption. The role this rate plays in deter­mining
the amount of the first and subsequent
payments is described in the example below.
Example of how variable annuity payments
are calculated. At age 65 Ms. Jones owns
20,000 accumulation shares in Company B's
variable annuity fund. The current value of
each share is $2.00, so that the total value of
her shares is $40,000. Ms. Jones has elected to
eceive a life annuity with 120 payments
ertain. Her contract contains a table that
· dicates how many dollars per $1,000
ccumulated she is guaranteed to receive in her
~st annuity payment-for example, $7.00-
ven her life expectancy (at the time the
ontract was purchased), annuity option, and
assumed rate of interest of 31/2 percent. Had
he selected another annuity option or assumed
te of interest, she would have been guar­teed
a different amount. Her first annuity
ayment might be $7.00 x $40 000 I $1 000
r $280. ' '
At this point her first payment is converted
annuity units. At the time a fund is
tablis~ed an annuity unit, which is simply an
countmg device, is arbitrarily valued at some
ALL 1974
amount, such as $1.00, and is assumed to
reflect some rate of return-generally 31/2 per­cent.
The value of an annuity unit fluctuates
with the investment experience of the fund,
but only if earnings differ from the assumed
rate and only by the amount of the difference.
Thus, if a fund is growing at an annual rate of 5
percent and the assumed rate is 31h percent, the
value of an annuity unit increases by 1 Y2 per­cent.
Some earnings assumption is necessary in
order to compute a first annuity payment and
to assign a portion of the fund's earnings to
later payments. A very low assumption would
permit payments to grow faster, but they
would initially be very low. A higher
assumption would produce a higher initial pay­ment
but a slow rate of growth and increased
likelihood of decline. Thus, an assumed rate of
31h percent is a conservative figure which helps
insure against too much variability in annuity
payments.
At the time Ms. Jones receives her $280
initial payment, the value of an annuity unit is
$1.40. Her first payment, then, reflects 200
annuity units ( $280 I $1.40) . All subsequent
payments will consist of the then current value
of an annuity unit times 200. Her payments,
therefore, will vary with the value of an
annuity unit, which varies with the investment
experience of the fund.
Tax Advantages of Variable Annuities
Besides their potential for growth, variable
annuities have certain tax advantages over
other forms of equity investments. The annuity
contract holder pays no taxes on the year-to­year
earnings of the fund. After his annuity
payments commence, he does not pay taxes on
long-term capital gains. His annuity payments
are taxed as regular income to the extent that
they exceed the amount of his purchase pay­ments
divided by the expected number of
annuity payments to be made under his con­tract
(adjusted for the annuity option
selected). By then, however, he is probably in a
lower tax bracket than during his earning years
and eligible for the double exemption allowed
persons over 65.
In certain cases the purchase payments are
tax deductible. Educational and certain other
nonprofit organizations are permitted to set up
21
such plans (called tax -sheltered annuities) for
their employees. Self-employed individuals can
establish a tax-sheltered retirement fund under
the Keogh Plan. The latter procedure should
not be carried out without competent financial
advice, as deviation from the strict rules
governing the Plan can result in loss of the tax
shelter. Tax-sheltered plans apply to other
forms of investment as well as variable annui­ties.
Buying a Variable Annuity Contract
Persons interested in exploring the possibili­ties
of variable annuities as a source of retire­ment
income should contact several insurance
companies or other investment companies who
offer variable annuity plans and obtain a pro­spectus
from each. The prospectus describes
the plan, gives detailed information regarding
charges (which differ from one company to the
next), lists the assets of the fund at a given
point in time, and indicates under what regula-tions
the company operates. Information
should also be obtained from the company
regarding the overall net investment experience
of the fund in recent years.
Variable annuities are not appropriate for
every person seeking retirement income, and
are certainly not an appropriate outlet for all
of an individual's retirement saving. Buying
stocks through a variable annuity plan carries
the same risks as buying stocks under any other
arrangement. Although the value of stocks has
generally kept pace with increases in the cost
of living over time, there have been occasions,
such as the present, when prices rose and the
value of stocks fell. A retired person with fixed
financial obligations to meet could find himself
in serious difficulty if he were relying totally
on variable annuity income in such a situation.
However, for individuals seeking to supplement
fixed retirement income, such as a fixed
annuity with income that has growth potential,
a variable annuity plan may be worth explor·
in g.
ENERGY PRICES AND THEIR IMPACT ON FAMILIES
by Marilyn Doss Ruffin
Families are feeling the pinch of higher
prices for household energy and for gasoline. In
August 1974, the Consumer Price Index (CPI)
for fuels and utilities was 21 percent above the
year-earlier level, while the CPI for gasoline had
risen by 40 percent.
Household Energy
Price increases for electricity and natural gas
have been less severe than those for coal and
the petroleum-based fuels (table 1 and chart).
Because of regulatory mechanisms, prices
consumers pay for gas and electricity are slow
to reflect inflationary trends. In about
three-fourths of the States, however, increased
fuel costs of producing electricity can be
passed on automatically to the consumer.
Among the 23 Standard Metropolitan Statis­tical
Areas (SMSA's) in which the Bureau of
Labor Statistics collects information on fuel
and utility costs, electricity was priced highest
in the Northeast and North Central regions,
which depend heavily on coal and oil. New
York-Northeastern New Jersey had the highest
22
cost of electricity in August 1974, and Seattle
had the lowest ($35.31 for 500 kwh. compared
with $6.77). Compared with year-earlier levels,
this cost had risen by $12.58 in New York-New
Jersey, but only $.12 in Seattle.
The Federal Energy Administration (FEA) ~
encouraging States to re-examine electric rate
policies-to consider automatic pass-through to
the consumer of other production costs as well
as fuel costs, and to consider a rate structure
that provides for higher charges during peak
hours, as system fuel efficiency is lowest when
demands are highest. In addition, FEA has
urged Governors to discourage promotional
practices such as advertising and cost-reduc·
tions on all electric homes. The percentage of
new homes with electric heating more than
doubled between 1966 and 1973. (table 2.)
The objective of reducing per-person ene~
requirements for heating and lighting is beJJlg
given high priority at FEA. Programs ~
upgrade existing housing-called "retrofitting'
by FEA-are being tried on a pilot basis in two
cities and, if successful, will be expanded
FAMILY ECONOMICS REVJEif
nationally. The pilot projects involve person­alized
computer analysis of a homeowner's
household energy requirements, the end result
being specific recommendations, including
costs, for possible energy-saving improvements.
Transportation
As measured by the CPI, the cost of
operating an automobile showed a greater
increase between August 1973 and August
1974 than did costs of public transportation
(table 1). There is some evidence of consumer
resistance to higher gasoline prices, with
demand for gasoline remaining below year­earlier
levels from January through August and
estimated to remain so for the remainder of
1974. The lower level of demand reflects
curtailment of driving as well as increased pre­ference
for cars with good fuel economy.
Consumers who are considering the purchase
of a new car this year are concerned about the
fuel economy of the new models and, in addi­tion,
about the availability and price of no-lead
gasoline, which must be used in models
equipped with the catalytic converter, an anti­pollution
device. From 65 to 85 percent of the
1975 cars will be equipped with the device,
according to the Environmental Protection
Agency (EPA). To prevent the use of leaded
gasoline, these cars will have smaller gas tank
inlets, and gasoline pumps for unleaded fuel
will have smaller nozzles. Under EPA regula­tions
about 110,000 stations will be required
to sell at least one grade of unleaded gasoline;
since first issuance, the proposal has been
modified to ensure availability in rural areas.
The Federal Energy Administration has pub­lished
several regulations on the pricing of
lead-free gasoline. For the most part, the
unleaded fuel will cost about 1 cent more than
leaded gasoline of similar octane.
Table I.-consumer Price Index, for selected energy-related items, U.S. city average
(1967=100)
Percent
change
Item Aug. May Feb. Nov. Aug. from
1974 1974 1974 1973 1973 Aug. 1973
to
Aug. 1974
ALL ITEMS ............... 150.2 145.6 141.5 137.6 135.1 11.2
Housing:
Fuel oil and coal ........ 220.9 211.0 202.0 155.6 132.8 66.3
Gas and electricity ....... 148.5 143.9 137.3 129.8 125.8 18.0
Electricity ............ 150.8 146.3 137.7 127.5 125.0 20.6
Gas ................. 146.0 141.3 136.9 132.3 126.7 15.2
Transportation ........... 143.4 137.6 129.3 125.8 124.5 15.2
Private
Gasoli~~: ;~g·ui~· .. .... .
142.8 136.6 127.5 123.8 122.3 16.8
and premium 166.5 165.4 147.8 126.3 118.7 40.3
Motor oil, premi~~ : : : : : 148.5 143.7 137.6 130.4 128.4 15.7
Parking fees . .... ...... 160.4 157.1 154.2 155.5 153.6 4.4
Public .. . .. .... ........ 148.7 146.3 146.2 144.6 144.9 2.6
Local transit fares ...... 147.6 148.3 148.7 149.2 150.3 -1.8
Taxicab fares ..........
Railroad fares,
154.1 145.4 145.3 138.3 138.3 11.4
coach 140.6 127.1 127.0 122.6 122.6 14.7
Airplane ·f~e·s· · · · · · · · · ·
chiefly coach ........ 148.2 141.4 141.4 137.1 134.5 10.2
,___!us fares, intercity ..... 159.5 159.0 150.9 145.9 145.9 9.3
ALL 1974 23
ENERGY PRICES
% OF 1967
200~-----------1-------------r-!----------~
I
Fuel oil~~
& coal* •
175~------------~----------~rj-----------4 .
.I
150 !_:·_ ------~ ~----------~----------~~ j
I~~
125 ~~' }I Gas & electricity* J-----l....,,onsumer---+1-----------=~1::...:,~;;;-Tj
price index ~::~-~ .. ...-i~asoline, regular
.-.I --.-~- _,_ ...... ••• & prem1•u m 0
-:.:;·~~-=-~-4.-::'. .......... j ............. j I I
loo~sm~~~~~--~----~--~~~~~--~--~
1967 1970 1973 1976
*INCLUDED IN HOUSING INDEX. O INCLUDED IN TRANSPORTATION INDEX. ~ 6-MONTH AVERAGE FOR 1974.
BLS DATA; URBAN WAGE EARNERS AND CLERICAL WORKERS.
USDA NEG. ARS 6085 · 74 {91
Table 2. -Fuel characteristics of new privately owned one-family homes 1966-73 1 - Fuel 1966 1967 1968 1969 1970 1971 1972 1973
characteristics - Percent Percent Percent Percent Percent Percent Percent Percent
Heating fuel:
Electricity .... 20 20 22 25
Gas ......... 64 66 65 64
Oil ......... . 13 11 11 9
Other ...... · . . 3 3 2 1
28 31
62 60
8 8
1 1
36
54
8
1
42
47
10
1
Central air-conditioning:
With ... ..... . 25 28 31 36 34 36 43 49
Without . . . . . . 75 72 69 64 66 64 57 51
~-1 -------~------------------------------------------------~
Data for 1966·70 cover contractor-built, owner-built, and homes for rent for year construction started an:
homes sold for year of sale. Data for 1971-73 show percent distribution of characteristics for all homes complef£
(includes new homes completed, homes built for sale completed, contractor-built and owner-built hoJil~
completed, and homes completed for rent). Percents exclude homes for which characteristics specified were no
reported.
Source: Statistical Abstract 1973, p. 684, table 1157, and Bureau of the Census.
24 FAMILY ECONOMICS REVIEW
Fuel economy on the 1975-model cars is
reported to be "much improved," based on
preliminary results of EPA mileage tests and on
industry estimates. EPA mileage results are
listed in "1975 Gas Mileage Guide for Car
Buyers." For a single free copy write to Con­sumer
Information Center, Pueblo, Colorado
81009.
Impact on Families
Rising energy prices have had greater impact
on some families than others-consumption
needs vary, as do prices that families must pay.
In addition, the family's ability to cope with
additional large expenditures depends on how
heavily its income is committed to fixed o bliga­tions
and to necessities-whether by choice or
because income is low.
For the most part, a family's energy con­sumption
needs are based on choices made in
the past-for example, selection of a home fur­nace,
appliances, automobile, 1 and location of
home. Except for reducing their level of use,
families have little flexibility in the short run
with respect to their energy requirements.
There is some evidence that rural residents
have particularly high expenditures for house­hold
energy items. A study of families in five
Appalachian counties of New York State in
1972 and early 1973 indicated that rural
ouseholds generally spend more on household
nergy than do nonrural households. 2
imilarly, in the most recent survey of expendi­ures
of U.S. households,3 average expendi­res
on household fuels and electricity were
igher for rural farm and rural nonfarm house­aids
than for urban residents and, in addition,
onstituted a larger percentage of expenditures
ts "
2 ee Cost of Operating an Automobile," p. 28.
97~UMAN ECOLOGY FORUM, vol. 4, No. 3. Winter
3 •
le Survey of Consumer Expenditures 1960-61. Sup­g~~
nt 3-Part A to BLS Report No. 237-93. May
LL 1974
for current consumption. The percentages of
rural households reporting expenditures for
coal and coke, for kerosene, and for fuel oil­fuels
with very large price increases in recent
months-were generally higher than for urban
households.
Families who depend on two earners to pro­vide
an adequate income are likely to be more
affected by increased transportation costs than
one-earner families. In 1973, 11.4 percent of
black families and 2.7 percent of white families
with two earners were below the low-income
level, thus lacking money resources for paying
higher costs.4 The median income in 1972 of
black families in which both husband and wife
were earners was $11,566--only $816 more
than for white families in which the husband
was the only earner. A 1967 study found that
on the average, employed black women
reported longer commuting time and higher
travel costs than employed white women.5
Information on household ownership of
motor vehicles, presented in table 3, can be
used to identify household types most vulner­able
to rising costs of public transportation
(the poor, the elderly, the central city resident)
as well as those who depend heavily on the
automobile (the multiple-earner household,
those living outside metropolitan areas, the
suburbanite). Table 4 points out some regional
differences in prices paid for gasoline.
4 Families and unrelated individuals are classified as
being above or below the low-income or poverty level,
using the poverty index adopted by a Federal Inter­agency
Committee in 1969. This index is based on the
Department of Agriculture's 1961 Economy Food Plan
and reflects the different consumption requirements of
families based on their size and composition, sex and
age of family head, and farm and nonfarm residence. In
1973, the low-income or poverty threshold-the
income level which separates "poor" from "nonpoor"
was $4,540 for a nonfarm family of four. The thres­holds
are updated every year to reflect changes in the
Consumer Price Index.
5 Parnes, Herbert S., and others, DUAL CAREERS,
U.S. Department of Labor, Manpower Administration,
Manpower Res. Monograph No. 21, vol. 1. 1970.
25
Table 3. -Household ownership of motor vehicles, 1 July 1972
Characteristic
All households .............. .
Household type:
Husband-wife (with or
without children) ......... .
Other type of household ..... .
Number of full-time workers
in family:
None .................... .
One ... . ................. .
2 ...........•............
3 or more ................ .
Income:
Under $3,000 ............. .
$3,000 to $4,999 .......... .
$5,000 to $7,499 .......... .
$7,500 to $9,999 .......... .
$10,000 to $14,999 ........ .
$15,000 to $24,999 ........ .
$25,000 and over .......... .
Age of head:
Under 25 years ............ .
25 to 64 years ............. .
65 years and over .......... .
Region by residence:
Northeast:
Metropolitan areas ........ .
Central cities ....... . ... .
Suburban rings ......... .
Outside metropolitan areas ..
Total .................. .
North Central:
Metropolitan areas ........ .
Central cities ........... .
Suburban rings ......... .
Outside metropolitan areas ..
Total .................. .
South:
Metropolitan areas ........ .
Central cities . . . . . . . . . . . .
Suburban rings ......... .
Outside metropolitan areas ..
Total .................. .
West:
Metropolitan areas ........ .
Central cities ........... .
Suburban rings ......... .
Outside metropolitan areas ..
Total .................. .
1 Includes cars and light trucks.
No
vehicle
18.9
7.4
40.7
44.7
11.1
5.1
.7
56.8
29.5
13.7
7.8
4.2
3.0
6.8
17.1
13.4
40.7
31.2
48.2
16.8
12.1
26.9
19.1
29.5
9.4
9.5
15.5
17.5
25.3
9.6
18.2
17.8
15.8
23.9
9.8
11.6
14.9
Percent owning in each household group
I One
vehicle
41.4
40.0
44.7
44.2
46.9
29.0
12.8
33.5
51.8
52.0
46.2
37.1
29.8
22.3
54.0
38.9
45.3
42.4
39.6
44.6
44.8
42.9
43.7
45.3
42.2
39.7
42.2
42.2
42.7
41.7
39.6
41.0
38.9
40.0
37.9
36.3
38.3
I
2 or
more vehicles
39.7
52.6
14.6
11.1
42.0
65.9
86.5
9.7
18.7
34.3
46.0
58.7
67.2
70.9
28.9
47.6
14.0
26.4
12.2
38.6
43.1
30.2
37.2
25.2
48.4
50.8
42.3
40.3
32.0
48.7
42.2
41.2
45.3
36.1
52.3
52.1
46.8 _.........
Source: U.S. Department of Commerce, Bureau of the Census, Series P-65, No. 44, February 1973.
26 FAMILY ECONOMICS REVIE~
Table 4.-Regular and premium gasoline average price for the United States and selected areas 1
Regular gasoline Premium gasoline
United States and Average price Oct.·Aug. Average price Oct.·Aug.
selected areas per gallon change per gallon change
Oct. Aug. Percent Per Oct.
I
Aug. Percent Per
1973 1974 mile2 1973 1974 mile2
Cents Cents Cents Cents Cents Cents
U.S. city average ............ 40.2 55.4 37.8 1.1 43.9 59.1 34.6 1.1
Northeast:
Boston .................. 40.5 55.2 36.3 1.1 44.4 59.1 33.1 1.1
Buffalo ••••••••• 0. 0 ••••• 40.3 58.0 43.9 1.3 43.8 61.4 40.2 1.3
New York-Northeastern N.J. 42.4 58.5 38.0 1.2 45.8 62.5 36.5 1.2
Philadelphia .............. 40.0 55.4 38.5 1.1 44.3 60.0 35.4 1.1
Pittsburgh •• 0 •• 0 ••••••••• 40.0 54.6 36.5 1.1 44.2 58.6 32.6 1.0
North Central:
Chicago ••••• 0. 0 ••• ••• ••• 42.1 57.5 36.6 1.1 45.9 61.0 32.9 1.1
Cincinnati 0. 0 •••• 0 0 • • •••• 40.5 56.7 40.0 1.2 44.4 60.5 36.3 1.2
Cleveland ................ 40.7 55.2 35.6 1.1 44.5 59.2 33.0 1.1
Detroit .................. 41.8 56.4 34.9 1.1 45.7 60.2 31.7 1.1
Kansas City 0 ••• 0 •••••• 0 •• 38.2 53.2 39.3 1.1 42.1 57.3 36.1 1.1
Milwaukee •• 0 •• 0 ••••••••• 38.5 53.4 38.7 1.1 42.3 57.6 36.2 1.1
Minneapolis-St. Paul 0 •••••• 39.5 54.5 38.0 1.1 43.4 58.5 34.8 1.1
St. Louis ••• 0 ••••••••••• 0 40.7 55.0 35.1 1.0 44.3 59.1 33.4 1.1
South :
Atlanta • 0 ••••• 0 ••••••••• 39.7 55.5 39.8 1.2 43.3 59.2 36.7 1.2
Baltimore ................ 40.9 56.4 37.9 1.1 44.8 60.6 35.3 1.1
Dallas ................... 35.2 51.2 45.5 1.2 38.9 55.0 41.4 1.2
Houston .......... . ...... 34.7 49.3 42.1 1.1 38.6 53.3 38.1 1.1
Washington .............. 41.4 56.1 35.5 1.1 45.6 60.2 32.0 1.1
West:
Los Angeles· Long Beach ... 40.4 54.3 34.4 1.0 44.0 58.0 31.8 1.0
Honolulu .... .... ........ 45.2 60.5 33.8 1.1 48.7 63.8 31.0 1.1
San Diego •••••••••• 0 •••• 41.4 55.2 33.3 1.0 44.9 59.1 31.6 1.0
San Francisco·Oakland 42.7 58.2 36.3 1.1 46.4 61.6 32.8 1.1
Seattle .. · · ·
40.3 54.3 34.7 1.0 44.2 58.3 31.9 1.0 • • 0 •••• 0 •• • •••••••
~II Collected by B.L.S. as part of the Consumer Price Index. Area coverage includes the urban protion of the
rresponding Standard Metropolitan Statistical Area (SMSA) except for New York and Chicago where the more
extensive Standard Consolidated Areas are used. Area definitions are those established for the 1960 Census and do
0~ include revisions made since 1960.
Cost per mile, August 1974 us. October 1973 at 13.7 miles per gallon.
p LL 1974 27
COST Of OPERATING AN AUTOMOBILE
The owner of a 1974 standard-sized auto­mobile
will spend $15,892 over 10 years to
drive and maintain the automobile. The owner
of a compact 1974 model will pay $12,880,
and the owner of a subcompact $11,153. These
costs, from an updated study by the Federal
Highway Administration, U.S. Department of
Transportation, are for an automobile operated
from a home in suburban Baltimore, Md. The
study assumes that the automobile is driven
100,000 miles over a 10-year period: 14,500
miles the first year and successively fewer miles
in each of the remaining 9 years.
Depreciation is the greatest single cost of
owning and operating a standard and a
compact model; while maintenance, acces.
sories, parts, and tires are the greatest costs of a
subcompact model (see table). The operating
costs for the standard-sized, compact, and sub.
compact automobiles are not entirely com.
parable because the standard-sized car is
assumed to have such optional features as air
conditioning and a V -8 engine that are not
assumed to be part of the smaller cars. These
items of optional equipment will affect the
costs for maintenance, gas, and insurance.
Cost per mile of operating an automobile, by size of automobile, 1974 model
Maintenance, Gas and Garage, State
Size of car Total Deprecia- accessories, oil parking Insurance and
cost tion parts, and (excluding and Federal
tires taxes) tolls taxes
Cents per mile
Standard ...... 15.9 4.2 3.4 3.2 2.0 1.6 1.5
Compact ...... 12.9 2.9 2.7 2.6 2.0 1.5 1.2
Subcompact ... 11.2 2.3 2.5 2.0 2.0 1.5 .9
Percentage distribution
Standard ...... 100 26.4 21.4 20.1 12.6 10.1 9.4
Compact ...... 100 22.5 20.9 20.2 15.5 11.6 9.3
Subcompact ... 100 20.5 22.3 17.9 17.9 13.4 8.0
Note. -Assuming operation over 10 years and 100,000 miles from suburban Baltimore, Md.
Source: Liston, L.L., and Sherrer, R.W. Cost of Operating an Automobile. U.S. Dept. Transportation, Fed.
Highway Admin., April 1974.
INDEX OF ARTICLES IN 1974 ISSUES
CLOTHING & TEXTILES
Clothing and Textiles: Supplies, Prices, and
Outlook for 1974
Clothing Quantity Budgets for Individuals
Textile News: The Energy Situation
Textile News: Fabric Flammability
USDA Clothing Budgets: Annual Costs
FAMILY FINANCE
28
BLS Budget Cost Estimates-Autumn 1972
BLS Urban Family Budgets-Autumn 1973
Page
18
3
7
8
3
19
19
Issue
Spring
Fall
sumiJII!
Fall
summd
Winter
Fall
FAMILY ECONOMICS REVJBI
Cost of Operating an Automobile 28 Fall
Energy Prices and Their Impact on Families 22 Fall
Growth in Consumer Credit 22 Summer
Know Your Pension Plan 22 Summer
Pension Provisions Affecting the Employment
of Older Workers 17 Winter
Survivor's Pensions 16 Winter
Use of Bank Credit Card and Check Credit Plans 18 Winter
Variable Annuities-Retirement Income With
Growth Potential 20 Fall
What Price Increases Mean for Families 3 Winter
Who Lacks Health Insurance Coverage? 3 Fall
FOOD
Convenience and the Cost of Plate Dinners and
Skillet Main Dishes 10 Summer
Cost of the Lean in Ground Beef 13 Winter
Cost of Meats and Meat Alternates 11 Fall
Cost of Poultry, Whole and Parts 8 Winter
Food Additives and Fortification 9 Spring
Freezer Food Concerns 11 Spring
National Food Situation 5 Spring
Nutrient Data Tapes Have New Supplier 19 Fall
The Part of Income That Goes for Food 6 Winter
USDA Meat and Poultry Inspection:
Current Interest in Product Labeling 7 Spring
Vegetarian Diets 14 Summer
OUSING
Energy Conservation in and Around the Home 16 Spring
FTC Issues Guides for Household Furniture Industry 20 Spring
Rental Housing in the United States 11 Winter
SCELLANEOUS
Characteristics of the Low-Income Population: 1972 23 Summer
Consumer Affairs in the USDA 3 Spring
Consumer Price Index by Region 21 Spring
Consumer Product Safety Commission 15 Winter
Consumer Publications in Spanish 26 Summer
Energy Outlook and Implications for the Family 13 Spring
FTC Trade Regulation Rules 21 Spring
Ingredient Labeling for Cosmetics 20 Summer
National Health Insurance: Issues for
Consumer to Consider 14 Fall
Ordering Publications from the Government
Printing Office 21 Winter
Other Families: Families Without Spouses 18 Summer
Young Adults 16 Summer
LL 1974 29
COST OF FOOD AT HOME
Cost of Food at Home, 1 Estimated for Food Plans at Three Cost Levels,
July 1974, U.S. average
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 leveh
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 not 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
• ' j• adjustments are suggested: 1-person-add 20 percent; 2-person-add 10 percent; 3-person-add 5 percen ,
5-person--subtract 5 percent; 6·or-more-person-subtract 10 percent.
30 FAMILY ECONOMICS REVIEf
CONSUMER PRICES
Consumer Price Index for Urban Wage Earners and Clerical Workers
(1967 = 100)
Group July 1974 I June 1974 I May 1974 I July 1973
All items ...................... 148.3 147.1 145.6 132.7
Food ••••• 0 •• 0. 0 •• 0 ••••••••• 160.5 160.3 159.7 140.9
Food at home ............... 160.6 160.9 160.4 140.9
Food away from home ........ 160.4 158.6 157.1 140.9
Housing ..................... 150.9 149.2 147.6 134.2
Shelter •••• • 0. 0 ••••••• •• ••• 154.4 152.8 151.3 139.7
Rent •••••••••••••• 0 0 •••• 130.3 129.8 129.3 124.3
Homeownershi p ••••••• 0 ••• 163.2 161.2 159.4 145.2
Fuel and utilities ............ 150.9 149.4 148.6 125.7
Fuel oil and coal •••••• 0 •••• 218.5 214.2 211.0 131.7
Gas and electricity .......... 146.2 144.5 143.9 125.5
Household furnishings and
operation .... . ........... . 141.4 139.2 137.0 125.0
Apparel apd upkeep •• 0. 0 •••• 0. 135.3 135.7 135.0 125.8
Men's and boys' •••••••• 0 •••• 136.0 137.0 135.7 125.4
Women's and girls' ••• 0 ••••••• 132.9 133.6 133.7 125.5
Footwear ••••••••• 0 •• 0 ••••• 136.9 137.4 137.4 129.9
Transportation • 0. 0 ••••••••••• 142.6 140.7 137.6 124.8
Private ....... . . . .......... 141.9 139.8 136.6 122.6
Public ........ .. ........ .. . 148.6 148.6 146.3 144.9
Health and recreation .......... 141.0 139.4 137.7 130.3
Medical care .......... . ..... 151.4 149.4 147.2 137.3
Personal care ............... 137.8 136.5 134.9 125.3
Reading and recreation ........ 134.6 133.5 132.0 126.2
Other goods and services ••••• 0 137.7 135.8 134.4 129.5
Sou rce: U.S. Department of Labor, Bureau of Labor Statistics.
Index of Prices Paid by Farmers for Family Living Items
(1967 = 100)
Item Aug. July June May Apr. Mar. Aug.
1974 1974 1974 1974 1974 1974 1973
~IIF <i tems . ............... . ... 164 161 160 159 157 155 141
r~od and tobacco ........... --- --- 161 --- ·-- 161 ·--
~~othing .................. --- -·- 167 --- -·- 162 ··-
~~usehold operation ......... --· --· 152 -·- --- 147 ·--
o~s~hold furnishings .. . ... . . --· ·-- 138 --- --- 135 ·--
. -~dtng materials, house ...... -·- ··- 177 --- ··- 169 ··-
1 &iurce: U.S. Department of Agriculture, Statistical Reporting Service.
I' LL 1974 31
~ ----------------------------------~-------------------------
32
CONTENTS
Page
Who Lacks Health Insurance Coverage? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Clothing Quantity Budgets for Individuals
Virginia Britton
Textile News: Fabric Flammability
Nancy G. Harries
3
8
The Cost of Meats and Meat Alternates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Betty Peterkin
National Health Insurance: Issues for Consumers to Consider ..................... 14
Kristin L. Kline
BLS Urban Family Budgets-Autumn 1973 ................................... 19
Nutrient Data Tapes Have New Supplier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Variable Annuities-Retirement Income With Growth Potential ................... 20
Nancy Rudd
Energy Prices and Their Impact on Families ................................... 22
Marilyn Doss Ruffin
Cost of Operating an Automobile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Regular Features
Some New USDA Publications ..... . ....................................... 14
Consumer Prices ... . ........................ . ........................... 31
Cost of Food at Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Index of Articles in 19 7 4 Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
FAMILY ECONOMICS REVIEW