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Family Budget of City Worker
October 1950
Bulletin No. 1021
UNITED STATES DEPARTMENT OF LABOR
M a u r ic e J. T o b in , Secretary
BUREAU OF LABOR STATISTICS
E w an Clag u e,
For sale by the Superintendent of Documents, U. S. Government Printing Office, Washington 25, D. C.
Commissioner
Price 5 cents
Letter of Transmittal
U nited S tates D epartment of L abor ,
B ureau of L abor S tatistics,
The S ecretary
Washington 25, D. C., March 7, 1951.
L abor :
I have the honor to transmit herewith estimates of the dollar costs of the City Worker’s Family
Budget for 4 persons in 34 cities for October 1949 and October 1950. This is a continuation of the project
originally undertaken at the request in 1945 of the Labor and Federal Security Subcommittee of the
Committee on Appropriations of the House of Representatives instructing the Bureau to find out what
it costs a worker’s family to live in large cities in the United States, and the relative differences in costs
between cities.
Estimates of total budget costs and costs of subgroups of items at March 1946 and June 1947
price levels were published in Bulletin No. 927, “Workers’ Budgets in the United States.” Since that
time, a short-cut procedure has been developed which provides a method of estimating the total budget
costs at a considerable saving of time and money; it does not provide, however, reliable estimates of
the cost of individual groups of consumption items. (The October 1950 and October 1949 estimates were
based on the short-cut procedure.) Costs in 10 cities for October 1949 were also computed by the
longer method.
of
The report was prepared by members of the Prices and Cost of Living Branches under the general
supervision of Abner Hurwitz and Eleanor M. Snyder and was originally printed in the Monthly Labor
Review, February 1951.
E wan C lague , Commissioner.
Hon. M aurice J. T obin ,
Secretary of Labor.
Contents
Rent, heat, and utilities__________________________
Other components of CW FB_____________________
Comparability of estim ates_______________________
Changes in estimating city worker’s family budget
Goods, rents, and services________________________
Price collection dates_____________________________
Calculation of food costs_________________________
Rent, heat, and utilities__________________________
Page
1
3
4
4
4
5
5
5
Family Budget of City Worker, October 1950
and October 1950, the housing budget advanced
from $506 to $932 in Houston, and declined from
$657 to $581 in Mobile. In three-fourths of the
cities, estimated costs of housing increased between
$5 and $20 a month from June 1947 to October
1950. Estimates of the budget cost of rent, heat,
and utilities for June 1947, October 1949, and
October 1950 appear in table 1.
More important in raising housing costs was the
addition of newly constructed units to the housing
supply at higher rentals. The volume of postwar
residential construction and the predominant
types of new units built varied from city to city.
Total annual cost of the city worker’s family
budget1 in 34 large cities of the United States
ranged from $3,453 in New Orleans and $3,507 in
Mobile, to $3,926 in Washington, D. C., and $3,933
in Milwaukee, an analysis for October 1950 shows.
These are the Bureau’s current estimates of the
cost of the budget, which was designed to describe
a “ modest but adequate” standard of living for
an urban worker’s family of four persons—an
employed father, a housewife not gainfully em
ployed, and two children under 15 years of age.
Costs of goods, rents and services, payment of
personal taxes, Social Security deductions, and
nominal allowances for occupational expenses and
life insurance are included.
The October 1950 cost of goods and services
alone ranged from $3,178 in New Orleans to $3,577
in Washington. Comparable costs of the goods
and services budget for October 1949 and June
1947 were $3,064 and $2,806, respectively, for
New Orleans, and $3,467 and $3,180 for Wash
ington. Costs of the entire budget and of goods,
rents, and services alone, in 34 cities for these
three periods, and relative differences in the
budget costs are presented in table 2.
T a b l e 1. — Cost of rent , heat, and utilities in 84 cities and
relative intercity differencest October 1950, October 1949 ,
and Jun e 1947
City
Atlanta, Ga....................
Baltimore, Md_______
Birmingham, Ala........
Boston, Mass............ .
Buffalo, N. Y ________
Chicago, 111_____ _____
Cincinnati, Ohio............
Cleveland, Ohio.........
Denver, Colo..................
Detroit, Mich.................
Houston, Tex.................
Indianapolis, Ind_____
Jacksonville, FIa_..........
Kansas City, Mo_____
Los Angeles, Calif.........
Manchester, N. H.........
Memphis, Tenn.........
Milwaukee, Wis______
Minneapolis, Minn___
Mobile, Ala__________
New Orleans, La...........
New York, N. Y _____
Norfolk, Va_..................
Philadelphia, Pa...........
Pittsburgh, Pa...........
Portland, Maine______
Portland, Oreg...........
Richmond, Va.......... .
St. Louis, Mo________
San Francisco, Calif___
Savannah, Ga........... .
Scranton, Pa..................
Seattle, Wash ...............
Washington, D. C.........
Rent, Heat, and Utilities
Higher costs of rental housing 2 (including rent,
heat, and utilities) accounted for a major part
of the increase in the cost of the budget between
June 1947 and October 1950 in most of the 34
cities. In Houston, for example, where the
budget housing costs rose more than in any of the
other cities, 60 percent of the total rise in the cost
of goods and services between these two dates
was due to increased rents. Differences in
housing costs in each of the three periods here
covered accounted also for most of the variations
between cities in the total budget cost. By
October 1950, housing costs alone ranged from
$557 in New Orleans to $977 in Richmond, Ya.
In addition, housing cost changes differed sub
stantially in individual cities. Between June 1947
035865—51
Relative d ifferen ces
(Washington, D. C.=
100)
Dollar costs1
October October June October October June
1950 1949 1947 1950 1949 1947
$903
849
748
776
754
797
867
691
813
743
932
666
858
660
779
718
827
876
769
581
557
708
780
761
760
691
714
977
718
730
700
674
771
972
$881
843
652
754
736
780
860
670
799
729
837
650
833
641
740
701
816
825
761
561
546
706
735
754
708
685
693
889
703
718
640
652
748
956
$597
660
589
624
522
671
573
552
571
593
506
561
560
497
534
557
611
656
656
657
446
664
592
569
607
594
547
661
654
557
607
551
610
756
93
87
77
80
78
82
89
71
84
76
96
69
88
68
80
74
85
90
79
60
57
73
80
78
78
71
73
101
74
75
72
69
79
100
92
88
68
79
77
82
90
70
84
76
88
68
87
67
77
73
85
86
80
59
57
74
77
79
74
72
72
93
74
75
67
68
78
100
79
87
78
83
69
89
76
73
76
78
67
74
74
66
71
74
81
87
87
87
59
88
78
75
80
79
72
87
87
74
80
73
81
100
i Average rent paid in each city for tenant-occupied dwellings that conform
to the housing standards specified for the budget plus the cost of required
amounts of heating fuel, gas, electricity, water, refrigerator, and stove. Var
iations in local practices with respect to the inclusion of these items in month
ly rental quotations and differences in requirements of heating fuel due to
climate are taken into account in calculating housing costs.
(i)
2
T able 2.— E stim ated total cost of budget and total cost of goods , rents , and services , 34 cities and their relative differences
October 1950 , October 1949 , and Jwwe
Estimated total cost
of budget *
City
October October
1950
1949
Atlanta, Ga._........................... $3,833
Baltimore, Md......................... 3,773
Birmingham, Ala..................... 3. 720
Boston, Mass........................... 3,807
Buffalo, N. Y........................... 3,668
Chicago, 111............................... 3,745
Cincinnati, Ohio...................... 3,733
Cleveland, Ohio....................... 3,630
Denver, Colo............................ 3,739
Detroit, Mich.......................... 3,750
Houston, Tex........................... 3,875
Indianapolis, Ind..................... 3,599
Jacksonville, Fla...................... 3,777
Kansas City, Mo..................... 3, 524
Los Angeles, Calif.................... 3,789
Manchester, N. H ................... 3,658
Memphis, Tenn.............. ....... 3,784
Milwaukee, Wis...................... 3,933
Minneapolis, Minn.................. 3,718
Mobile, Ala_______________ 3,507
New Orleans, La...................... 3,453
New York, N. Y...................... 3,649
Norfolk. Va.............................. 3,716
Philadelphia, Pa...................... 3,699
Pittsburgh, Pa......................... 3,779
Portland, Maine...................... 3,622
Portland, Oreg......................... 3,690
Richmond, Va.......................... 3,890
St. Louis, Mo........................... 3,639
San Francisco, Calif................ 3,808
Savannah, Qa.......................... 3,557
Scranton, Pa............................. 3,598
Seattle, Wash........................... 3,808
Washington, D. C................... 3,926
$3,613
3,648
3,451
3,589
3,488
3,605
3,599
3,461
3,553
3,562
3,605
3,401
3,633
3,336
3,630
3,399
3,585
3,645
3,512
3,343
3,295
3,458
3,522
3,558
3,530
3,392
3,425
3,663
3,471
3,654
3,318
3,358
3,582
3,773
June
1947
$3,240
3,345
3,338
3,391
3,180
3,369
3,202
3,282
3,253
3,381
3,094
3,181
3,224
3,093
3,333
3,216
3,305
3,410
3.387
3,364
3,092
3,430
3,338
3,286
3,378
3,286
3,251
3,315
3,325
3,399
3,240
3,249
3,475
3,546
Relative differences—(Washington, D. C.-100)
Estimated cost of goods, rents,
and services only *
October October
1950
1949
$3,495
3,444
3,370
3,468
3,350
3,424
3,414
3,327
3,415
3,428
3,531
3,266
3,451
3,236
3,431
3,347
3,457
3,553
3,376
3,190
3,178
3,334
3,376
3,339
3,450
3,317
3,343
3,520
3,323
3,447
3,264
3,279
3,477
3,577
October October
1950
1949
June
1947
$3,333
3,355
3,164
3,305
3,228
3,328
3,323
3,205
3,282
3,291
3,325
3,125
3,352
3,099
3,319
3,149
3,311
3,339
3,232
3,072
3,064
3,203
3,232
3,252
3,261
3,144
3,148
3,349
3,196
3,340
3,083
3,115
3,308
3,467
Cost of goods, rents, and
services only
Total cost of budget
$2,926
3,012
2,977
3,048
2,879
3,036
2,897
2,964
2,940
3,046
2,806
2,857
2,916
2,807
2,976
2,905
2,981
3,054
3,033
2,999
2,806
3,086
2,993
2,934
3,043
2,964
2,920
2,974
2,999
3,031
2,929
2,936
3,124
3,180
98
96
95
97
93
95
95
92
95
96
99
92
96
90
97
93
96
100
95
89
88
93
95
94
96
92
94
99
93
97
91
92
97
100
June
1947
96
97
91
95
92
96
95
92
94
94
96
90
96
88
96
90
95
97
93
89
87
92
93
94
94
90
91
97
92
97
88
89
95
100
October October
1950
1949
91
94
94
96
90
95
90
93
92
95
87
90
91
87
94
91
93
96
96
95
87
97
94
93
95
93
92
93
94
96
91
92
98
100
98
96
94
97
94
96
95
93
95
96
99
91
96
90
96
94
97
99
94
89
89
93
94
93
96
93
93
98
93
96
91
92
97
100
June
1947
96
97
91
95
93
96
96
92
95
95
96
90
97
89
96
91
96
96
93
89
88
92
93
94
94
91
91
97
92
96
89
90
95
100
92
95
94
96
91
95
91
93
92
96
88
90
92
88
94
91
94
96
95
94
88
97
94
92
96
93
92
94
94
95
92
92
98
100
*The June 1947 costs of the city worker’s family budget published in this
report vary somewhat from those published in the February 1948 issue of
the Monthly Labor Review. Changes in the method of estimating food
costs increased the total cost of goods and services by about $65.
* In addition to goods, rents, and services, includes personal taxes, life
insurance, employment insurance, and occupational expenses.
* Includes food, rent, heat and utilities, housefurnishings, household
operation, clothing, medical care, transportation, reading and recreation,
personal care, tobacco, gifts and contributions, and miscellaneous items.
However, the over-all effect was to raise the aver
age rental level, because rents of new units were
almost always above those prevailing for older
(rent controlled) dwellings. Part of the change in
the budget cost of rent, heat, and utilities from
June 1947 to the two later dates reflects shifts
which have occurred within each city in the dis
tribution of types of dwelling units which meet
the budget standard. In some cities, the volume
of new residential construction was insignificant;
in other cities where the volume of residential
building was greater, new units were chiefly of
higher cost types. Thus, differences in budget
housing costs between cities as well as in time-totime changes within each city include the dif
ferential effect of the kinds of new units added to
the housing market.
Estimates of housing costs in 1949 and 1950
are based on information obtained in comprehen
sive dwelling unit surveys conducted by the
Bureau between December 1949 and February
1950.3 The survey data thus obtained were ad
justed to October 1949 and October 1950 by ap
plying the percentage change in the rent compo-
T able 3.— Com parison of total cost of goods and services
budget based on comprehensive and short-cut procedures ,
10 citiest October 1949
City
Birmingham, Ala............
Boston, Mass...................
Chicago, HI......................
Denver, Colo...................
Detroit, Mich..................
Houston, Tex...................
Kansas City, Mo............
Los Angeles, Calif...........
New York City, N. Y___
Pittsburgh, Pa.................
Cost of goods and
services using—
Compre Short-cut
hensive
$3,164
3,307
3,321
3,264
3,254
3,299
3,084
3,337
3,216
3,261
$3,164
3,305
3,328
3,282
3,291
3,325
3,099
3,319
3,203
3,261
Difference
Amount
0
-$2
+7
4-18
4-37
4-26
4-15
-18
-13
0
Percent
0
-0.1
+0.2
+0.6
+1.1
+0.8
+0.5
-0.5
-0.4
0
3
nent of the Consumers’ Price Index between these
dates and the month in which the dwelling unit
survey was conducted in each city. Inter
city differences in changes in costs for rent, heat,
and utilities after June 1947 resulted from a
number of factors which varied in importance
from city to city. Between June 1947 and October
1950, rents were decontrolled in 8 of the 34 cities
and in suburban areas of 2 cities.4 Kent increases
T a b l e 4.—
following decontrol action are reflected in the
higher costs of housing in these cities.
Other Components of CWFB
Estimated costs of goods and services, exclusive
of rent, heat, and utilities, varied among the 34
large cities by about $200 or less at successive
pricing dates.
C ity worker's fa m ily budget for 4 persons— 10 large cities of the U nited States, October 1949 and Jun e 1947
Birming
ham
Boston
Chicago
Denver
Detroit
Houston
Kansas
City
Los
Angeles
1
New York Pittsburgh
Oct. June Oct. June Oct. June Oct. June Oct. June Oct. June Oct. June Oct. June Oct. June Oct. June
1949 1947 1949 1947 1949 1947 1949 1947 1949 1947 1949 1947 1949 1947 1949 1947 1949 1947 1949 1947
Food8.............................. $1,150 $1,128 $1,153 $1,128 $1,153 $1,123 $1,116 $1,108 $1,127 $1,130 $1,160 $1,094 $1,107 $1,086 $1,117 $1,115 $1,172 $1,160 $1,149 $1,131
Food at home8......... 1,019 999 1,022 999 1,022 995 988 981 998 1,001 1,029 969 980 961 989 988 1,039 1,028 1,018 1,002
Housing........................... 768 702 874 738 894 787 917 683 847 707 951 620 757 610 857 651 829 783 824 716
Rent, heat, and utili
ties 4...... ................ 652 589 754 624
671 799 571 730 593 837 506 641 497 740 534 706 664
607
Housefurnishings8__ 86 81 90 81 780
84 85 87 79 87 83 84 83 85 80 87 85 92 86 707
87 78
Household opera
tion 8...................... 30 32 30 33 30 31 31 33 30 31 30 31 31 33 30 32 31 33 30 31
Clothing 7.~_................... 459 425 449 420 470 451 453 434 448 445 430 403 449 410 460 427 431 473 460 453
Medical care8.................. 182 161 183 165 185 149 176 159 190 180 181 167 176 152 248 222 210 165 181 157
Transportation8............. 289 261 317 290 263 199 288 256 296 256 263 241 281 253 318 247 244 183 310 265
Automobile owners10. 356 327 385 354 414 335 352 315 357 310 321 299 335 309 375 298 435 351 379 326
Nonowners of auto
mobiles................... 101 73 123 109 162 108 107 88 122 104 96 76 129 95 156 101 117 70 113 93
Other goods and services. 316 300 331 307 356 327 314 300 346 328 314 281 314 296 337 314 330 322 337 321
Reading and recrea
tion 11__................. 66 63 92 83 102 93 75 80 93 95 74 70 78 76 98 93 95 99 90 88
Personal care18......... 60 57 59 56 71 63 64
59 68 65 64 55 60 55 66 65 61 59 65 62
Tobacco..................... 44 41 43 40 41 39 35 33
40 31 39 38 37 36 35 33 40 36 42 39
Public school ex
penses 18................. 20 20 5 5 10 10 10 10 15 15 5 5 15 15 5 5 5 5 10 10
Gifts and contribu
tions 14.................... 86 80 90 83 90 83 89 80 89 83 90 76 84 77 91 80 88 83 89 83
Miscellaneous 18........ 40 39 42 40 42
39 41 38 41 39 42 37 40 37 42 38 41 40 41 39
Total cost of goods and
services......................... 3,164 2,977 3,307 3,048 3,321 3,036 3,264 2,940 3,254 3,046 3,299 2,806 3,084 2,807 3,337 2,976 3,216 3,086 3,261 3,043
Other outlays 18__........... 287 361 284 343 276 333 268 313 264 335 276 288 234 286 314 357 257 344 269 335
Taxes 17._.................. 120 194 147 206 139 196 131 176 127 198 139 151 97 149 147 190 120 207 132 198
Estimated cost of the
budget.......................... 3,451 3,338 3,591 3,391 3,597 3,369 3,532 3,253 3,518 3,381 3,575 3,094 3,318 3,093 3,651 3,333 3,473 3,430 3,530 3,378
* Revision of the 1947 food estimates (see p. 5 for explanation of changes
in calculation procedures) increased the estimated cost of food in 1947 by $63
to $71 and the total goods and services by $65 to $74, over the figures pre
viously published.
* Includesaway
meals
between-meal food and beverages purchased and
consumed
fromand
home.
8 Food and beverages purchased for meals prepared at home, including
lunches that are carried to work or school.
4Average rent paid in each city for tenant-occupied dwellings that conform
to the housing standards specified for the budget, plus the cost of required
amounts of heating fuel, gas, electricity, water, refrigerator, and stove.
Variations in local practices with respect to the inclusion of these items in
monthly rental quotations and differences in requirements of heating fuel
due to climate are taken into account in calculating housing costs.
* Furniture; equipment and appliances such as washing machine, electric
iron, toaster, and fan; housewares such as dishes, cooking utensils, brooms,
and mops; textile housefurnishings such as sheets, towels, and table linens.
8 Soaps and other supplies for cleaning and laundry, matches, household
paper supplies, etc.
7 Includes shoe repairs, dry cleaning, and supplies for home cleaning and
mending. Some allowance is made for differences in requirements of heavy
and light clothing, due to climate.
8 Includes medical, dental, and hospital services; medical supplies; and
eyeglasses. Hospital service includes family membership in group hos
pitalization plan.
8 Average costs of automobile owners and nonowners weighted by the
following proportions of families: for New York City and Chicago, 40 per
cent of automobile owners, 60 percent of nonowners; for other cities, 74 percent
and 26 percent, respectively.
10 Includes annual allowance of $107 in 1947 and 1949 for automobile pur
chase.
11
magazines, movies, radios, toys, games, pets, and dues to
civicNewspapers,
and social clubs.
18Barber and beauty shop services, toilet soap, dentifrices, shaving supplies,
cosmetics, etc.
18 Textbooks and other supplies not furnished by the public schools, and
outlays for school games and entertainment.
14 Christmas and birthday presents to persons outside the family, contri
butions, and community welfare. Estimated as 2.8 percent of the cost of
other goods and services.
18 Lodging away from home, music lessons for the children, legal service,
and garden supplies. Estimated as 1 percent of the cost of other items (ex
cluding gifts and contributions) plus $10 which represents the cost of com
munication (telephone calls, stamps, and stationery supplies).
18 Taxes, life insurance ($85), employment insurance, and occupational
expenses ($22) such as union or association dues, special clothing, and equip
ment required by the occupation. Employment insurance for most cities
is covered by $30 (1 percent on first $3,000 of wages) for employee contribution
to Federal Old Age and Survivors Insurance. In Birmingham and Los
Angeles there is an additional $30 for unemployment or disability insurance.
17Income taxes Federal and State; poll or other per capita taxes.
4
The budget includes outlays for Social Security
deductions, unemployment compensation deduc
tions in States where such insurance is obligatory,
an allowance of $22 for occupational expenses,
$85 for life insurance, and personal taxes (Federal,
State, and local income taxes, and poll taxes).
Reductions in Federal income tax rates be
tween 1947 and 1949 lowered total tax pay
ments of budget families about $55 on the aver
age, the exact amount depending on the level of
budget costs in each year. A four-person family
with an income of $3,300 would pay Federal in
come tax of about $184 in 1947, $95 in 1949, and
$99 in 1950; other personal taxes vary by State
and community. (The calendar year is the base
in each case.)
Comparability of Estimates
In preparing the 1949 and 1950 estimates of the
budget costs, every effort was made to maintain
comparability with the 1946 and 1947 estimates.
No basic changes were introduced in the original
quantity weights, and the same comparability of
goods and services was maintained in the calcu
lations for each period.
The budget costs for the two earlier years, 1946
and 1947, were based on representative retail
prices collected in the 34 cities for more than 300
items. Price collection and processing on such a
large scale was extremely costly and time consum
ing. Accordingly, the Bureau undertook to de
velop a short-cut procedure which utilizes retailprice data for about 60 items and average rents for
a representative sample of 5-room dwelling units
meeting the budget standard. The number of
items priced in the short-cut method is too limited
to provide reliable estimates of dollar costs or
intercity indexes for groups of items included in
the budget. The estimating formula can be used
only to obtain total costs of the goods, rents, and
services budget, and indexes based on these totals.
It has been tested for 10 cities in which October
1949 prices were obtained for the comprehensive
list of over 300 items, and the differences between
the two are shown in table 3. For the 10 cities
in which the comprehensive list of items was priced
in October 1949, costs of the CWFB by major
component groups were computed separately.
These figures and the comparable data for June
1947 are given in table 4.
On the basis of this and similar tests made
previously, using March 1946 and June 1947
prices, the procedure was considered sufficiently
reliable for estimating the total budget cost for
each of the 34 cities for which price and rent infor
mation was available. By this procedure, budget
costs can be estimated and intercity differences can
be compiled for periods in which price relationships
are stable. When the cities are ranked in order
of estimated budget costs, the difference (both in
absolute and relative terms) between each suc
cessive city often is not significant, and errors of
estimate are often sufficient to cause minor shifts
in the relative position of individual cities. The
estimated intercity indexes which appear in table
2 thus should be used as rough indicators of a
city’s relative position in the cost scale and not as
precise measurements.
Changes in Estimating City Worker’s
Family Budget
Estimated costs of the city worker’s family
budget for four persons in 34 cities in October 1949
and October 1950 given on page 2 are based on
the same budget concepts and basic quantity
weights used in March 1946 and June 1947 (de
scribed in the Monthly Labor Review for February
1948). Methodological changes were introduced,
however, and are described below.
Goods, Rents, and Services
Average retail prices of over 300 items entered
into the cost computations for 1946 and 1947,
compared with about 60 items for 1949 and 1950.
In selecting the shortened list, price relationships
were analyzed to determine the single item or the
few items in a subgroup that would best reflect
the level of prices of the entire subgroup. Quantity
weights of the 300 items originally priced were
then allocated among those in the short list. The
imputation pattern was based on the relationship
between costs of the single or few priced items
within each subgroup and the full list of items
originally included in the subgroup. A detailed
description of the methodology was published in
the March 1949 issue of the Monthly Labor
Review (p. 315).
Subsequently, the basic formulas have been
adjusted so that the short-cut procedure can also
5
be used to estimate the average cost of goods,
rents, and services combined; the original formula
was designed to measure only relative intercity
differences in costs of the CWFB. Errors of
estimate in the group and subgroup totals in this
short-cut procedure, tend to cancel out in sum
mation. Therefore, only the estimates for the total
budget are considered valid.
To correct for this bias, a simple adjustment for
changes in price levels was made by applying to
the a term of each equation the relative change
in the retail food price subgroup index most
similar to that group for which the average price
was being estimated. The adjustment was as
follows:
a '= a + (j~ _ i^ |a|
Price Collection Dates
where a=original coefficient of the basic equation.
a ' = adjusted coefficient.
I n=price index at time n for the food sub
group represented in the estimating
equation.
I 0—comparable 1935 annual food price
index.
|a|=the absolute value of a which was
chosen to permit a positive adjustment
even when a is negative.
Except for seasonal items, the budget covers a
year's purchases, based on prices as of the specified
date. For the two earlier budget calculations,
prices for nonseasonal items were collected in
March 1946 and June 1947, respectively, in all 34
large cities. For 1949 and 1950, the price collec
tion date was not the same in all cities for all
items. Food prices were collected in October in
all 34 cities; prices of other goods and services were
obtained during October in 18 cities, in September
in 8, and in November in the remaining 8. The
pricing cycle in each city is that established for
collection of prices for the Consumers' Price
Index.
Calculation of Food Costs
This adjustment procedure had not been applied
in previously published food budget costs for
March 1946 or June 1947. Therefore, in order
to maintain comparability between the cost esti
mates for June 1947, October 1949, and October
1950, food costs for June 1947 were recalculated
by applying the adjustment just described. The
effect was to increase the 1947 food budget about
$65 above the costs originally published.
In determining the cost of the food budget,
linear regression equations were used to estimate
the average price for a group of foods, based on Rent, Heat, and Utilities
actual prices of a small number of items in the
group. For example, the average price of all
It was unnecessary to use a short-cut method
cereal and bakery products was estimated from of estimating costs of rent, heat and utilities in
the relationship between the group average and the October 1949 and October 1950 budgets be
white bread and soda cracker prices. These cause current dwelling unit survey data were
equations are of the form Y = a - \- b i X i Jr • . . + b nX n available for all 34 cities. The budget costs for
where Y is the average price for a whole food this category thus are not subject to the estimating
group; the X {s are prices for selected items in the errors found in the other groups of goods and
group, and the a and 6<'s are constants of the services.
equation.
The March 1946 and June 1947 costs of rent,
The coefficients of the estimating equations heat, and utilities were based on representative
were derived by multiple regression techniques, city samples of five-room dwelling units which
using data from the study, “Money Disbursements met the budget standard.3 Both furnished and
of Wage Earners and Clerical Workers, 1934-36.” unfurnished units were included, and rents for
The period 1934-36 was one of low prices, and furnished units were adjusted downward to
when the estimating equations were applied to the exclude the rental cost of furnishings. In October
relatively higher prices for the later periods, the 1949 and October 1950, the CWFB cost of rent,
resultant estimated average prices were found to heat, and utilities was based only on unfurnished
units.
be biased downward.
6
1The BLS published estimates of the cost of the C WFB in 34 cities at the
price levels of March 1946 and June 1947, in the Monthly Labor Review,
February 1948. The development of the budget and the determination of
its costs was undertaken in response to a directive by the Labor and Federal
Security Subcommittee of the House Committee on Appropriations, to “find
out what it costs a worker's family to live in the large cities of the United
States." The CWFB was designed to describe a “modest but adequate"
standard of living. It was not intended to be a "subsistence" or a “mainte
nance" budget. In the words of the Technical Advisory Committee which
assisted in its development, the budget represents “thenecessary minimum";
it covers conventional and social as well as biological needs. The goods and
services included in the budget and their quantities are those which were
considered essentia] according to community standards prevailing during the
prewar period. The list of items, together with a detailed description of how
the budget was derived, is given in Bulletin No. 927, Workers’ Budgets in the
United States. Copies of this report are available from the Bureau of Labor
Statistics.
i The estimates of housing costs for the budget family are based on 5-room
dwellings which meet the housing standards established by the American
Public Health Association’s Committee on Hygiene of Housing and the Fed
eral Public Housing Administration. Only units meeting the following
specifications were included in the budget calculations:
“Five-room dwelling-house or apartment—including kitchen, with sink
and installed stove, hot and cold running water; with a complete private bath
including wash bowl, flush toilet, and tub or shower; electricity for lighting;
installed heating, either central or other type, such as base burner, pipeless
furnace, or stoves, depending upon the climate of the specific city. (Central
heating was generally required in cities where the normal January tempera
ture is 40° F. or colder, and central or other installed heating for cities with
warmer climates.)” Dilapidated dwellings were excluded, i. e., if they had
deficiencies in physical construction rendering them inadequate or unsafe as
shelt er, or several lesser deficiencies which in combination render them inade
quate or unsafe, or were of makeshift or inadequate construction. All units
included were located in neighborhoods with play space for children, not
adjacent to certain specified hazards to health and safety, and accessible to
public transportation.
*March 1946 and June 1947 estimates were derived from dwelling unit sur
veys conducted in 1944 and 1945.
4 Federal rent controls were lifted as follows: Birmingham, May 1950;
Houston, October 1949; Jacksonville, August 1949; Milwaukee, August 1949
(State control until May 1950); Mobile, May 1950; Norfolk, March 1950;
Richmond, June 1950; Savannah, March 1950; Los Angeles suburbs, Novem
ber 1949 to June 1950; Virginia suburbs of Washington, D. C., June 1950.
01'IC!
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