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Study says: Life is good in America |
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Written by Lisa Anderson, KRT
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Saturday, 24 June 2006 |
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NEW YORK — Americans have never had it so good.
Gas prices may be up. The stock market may be down. Job security may seem an illusion and there's not yet an iPod in every pocket. But, according to the government, American families have never earned more income, spent less on necessities or enjoyed a higher standard of living than they do right now.
That information comes from a new longitudinal study by the U.S. Bureau of Labor Statistics, which, for the first time, examines a century, instead of just a year, in its long-standing survey of consumer expenditure. The report, "100 Years of U.S. Consumer Spending: Data for the Nation, New York City, and Boston," paints a pursestrings portrait of American society from 1901 to 2002-2003 by tracing the impact of significant events of the 20th century on consumer spending patterns.
If, indeed, Americans are what they spend, the survey vividly illustrates how much they have changed in 100 years. "In many ways, the only thread of commonality between U.S. households in 1901 and in 2002-03 is their geographic location," as the 70-page report puts it.
In 1901, for example, the average household had $750 in annual income - with an average 9.5 percent of that earned by children - to support an average family of 4.9 people. Most of that money - 79.9 percent - went for food, clothing and housing.
By 2002-3, the average American family was earning $50,302 and statisticians no longer mentioned children as income producers. Moreover, the average household contained 2.5 people and only 50.1 percent of the income went for food, clothing and housing. The report stresses that this represents a real three-fold increase in income: the family would be earning $2,282 restated in 1901 dollars.
Clearly, the so-called good old days hardly were so good, said Michael Dolfman, the Bureau of Labor Statistics regional commissioner in New York, who co-authored the report with Denis McSweeney, his bureau counterpart in Boston. New York and Boston were broken out because they are two of the nation's oldest urban areas.
"I come from the generation that, when we look back at the turn of the century, we see it as a halcyon time, when the pace of life was different and it was a very civil, pleasant time. Looking at the results, we found that at the dawn of the 20th century, life in the United States, and particularly in New York, was very difficult," said Dolfman, 63.
In the New York City of 1901, he pointed out, people spent 20 percent more than they earned. They were able to do this, he said, because "there was a great deal of immigration and people came with grubstakes. Extended families came over and they borrowed from each other. Merchants would extend credit to people. And, they survived."
To their advantage, perhaps, Americans in 1901 were young. In a population of 76 million, the median age was 22.9 years. By 2002-03, with a population of 281 million, the median age was 35.3 years, the highest in 100 years.
"We wanted to tell the story of how standards of living in the nation, in New York and in Boston have changed markedly in 100 years. Most people, when they talk about the economy are talking about broad measures, measures of inflation, measures of gross domestic product. We wanted to look at the American household as a key economic unit," said Dolfman, explaining the decision to examine a century's worth of data for this year's report, which was released this month.
Household expenditures on the necessities of food, clothing and housing provide windows into the changing lives of families. Shifts in what families spent on food, in particular, tell of major changes at the kitchen table over the century. In 1901, food was the single biggest expense for the average family, claiming 42.5 percent of its entire income. With most jobs paying less than 30 cents per hour, food was expensive: the average cost per pound was 13 cents for bacon, 27 cents for butter and 22 cents for a dozen eggs.
As mass production made food more plentiful and cheaper, the share of the family budget taken by food steadily declined, dropping to 13.1 percent in 2002-03. However, food remained the largest single expense until 1950, when housing, driven by a postwar boom in home ownership, supplanted it.
Over the years, spending patterns reflected changing dietary tastes, as well as technological developments, such as the rise of supermarkets, the proliferation of refrigeration and home freezers, and the growth of a global marketplace in which fruits and vegetables are available constantly, said Dolfman.
What people were eating also held up a mirror to what was going on in the society, said Dolfman. "In 1934-36, the average American ate 3,250 calories per day. By 1950, they ate 3,260 calories a day. But, in 1950, even though the calories were the same, Americans consumed 12.6 percent more food. In the Depression, they were eating pastas and breads and high caloric foods to fill themselves up," he said.
One of the most dramatic tales food has to tell is in the shift away from eating at home - which is where almost everyone ate 100 years ago. However, with the increase of fast food and more affordable restaurants and with the rise in discretionary funds, by 1960, families were spending 21 percent of their food budget on restaurants. As more women entered the workplace, rising from 18 percent of the labor force in 1901 to 46.5 percent in 2002-03, the amount spent on eating outside the home also rose. In 2002-03, it accounted for 41.9 percent of the average American family's food budget.
While home ownership rocketed from 19 percent at the start of the 20th century to 67 percent at the dawn of the 21st century, who lives in those homes has changed. The number of single-person households has risen from 16.8 percent in 1960 to 29.5 percent in 2002-03.
While many consumer categories, such as iPods, could hardly have been imagined even half a century ago, the need and willingness to spend for entertainment have not changed, particularly when it's needed the most. During the Depression years of 1934-36 the average U.S. household spent 5.4 percent of total expenditures on entertainment - more than the 5.1 percent the average family spent on the category in 2002-03. | Only registered users can write comments.
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