What Americans Buy(npr.org)
npr.org
What Americans Buy
http://www.npr.org/blogs/money/2012/04/05/149997097/what-americans-buy?sc=fb&cc=fp
14 comments
I would like to see those bar graphs, without them being normalized to % of income. For example, a huge difference is the fraction of income spent on food: how much of that is food costs going down, and how much is income going up? Non-noramalized stacked bar graphs of (inflation-adjusted) dollars would answer that better than normalized ones.
I actually worked on the project on which the graphic in the Atlantic is based (and which, in turn, this piece is based on). We came up with different percentages because we are looking at a wider swath of spending than this piece is. But here are our numbers for food spending (in billions of 2009 dollars):
1947: 468.7
1967: 637.1
2007: 1,230.2
You might conclude that we are spending dramatically more on food all around, but keep in mind the population of the US in 1947 was less than half what it is now, so those numbers aren't quite as dramatic as they appear. All indications are that on the whole we have much better access to high quality food now (we have more access to things like fresh fruit, and wine), though this is not necessarily true if you are poor.
1947: 468.7
1967: 637.1
2007: 1,230.2
You might conclude that we are spending dramatically more on food all around, but keep in mind the population of the US in 1947 was less than half what it is now, so those numbers aren't quite as dramatic as they appear. All indications are that on the whole we have much better access to high quality food now (we have more access to things like fresh fruit, and wine), though this is not necessarily true if you are poor.
In case anyone else was wondering how much less dramatic the increase is than it appears, here are the numbers adjusted for population.
1947: $3254/person ($468.7B / 144 million people)
1967: $3201/person ($637.1B / 199 million people)
2007: $4073/person ($1230.2B / 302 million people)
1947: $3254/person ($468.7B / 144 million people)
1967: $3201/person ($637.1B / 199 million people)
2007: $4073/person ($1230.2B / 302 million people)
It may be of interest to some: As food costs have come down in US so have some important nutrients in fruit & veggies.
Eating Your Veggies: Not As Good For You? http://www.time.com/time/health/article/0,8599,1880145,00.ht...
And,
Changes in USDA Food Composition Data for 43 Garden Crops, 1950 to 1999 http://www.jacn.org/content/23/6/669.full
Which concludes: "We suggest that any real declines are generally most easily explained by changes in cultivated varieties between 1950 and 1999, in which there may be trade-offs between yield and nutrient content."
Eating Your Veggies: Not As Good For You? http://www.time.com/time/health/article/0,8599,1880145,00.ht...
And,
Changes in USDA Food Composition Data for 43 Garden Crops, 1950 to 1999 http://www.jacn.org/content/23/6/669.full
Which concludes: "We suggest that any real declines are generally most easily explained by changes in cultivated varieties between 1950 and 1999, in which there may be trade-offs between yield and nutrient content."
I would love to see this data compared to other countries.
I find it interesting that despite everything to do with health care, we're only spending approximately 4% more on medical care than we were in 1949.
That we are generally buying larger houses is no surprise, but that we're spending a substantially larger portion of our incomes to do so is, while not surprising, certainly interesting in the sense that this binds us to our income streams more than generations past.
I don't know the data, so perhaps someone could enlighten me as to whether or not this is because houses are just more expensive than they used to be, or because we just like buying larger houses (possibly for status) than we used to, or whether we just have more income available to spend on houses since we're spending so much less on food and clothing?
I find it interesting that despite everything to do with health care, we're only spending approximately 4% more on medical care than we were in 1949.
That we are generally buying larger houses is no surprise, but that we're spending a substantially larger portion of our incomes to do so is, while not surprising, certainly interesting in the sense that this binds us to our income streams more than generations past.
I don't know the data, so perhaps someone could enlighten me as to whether or not this is because houses are just more expensive than they used to be, or because we just like buying larger houses (possibly for status) than we used to, or whether we just have more income available to spend on houses since we're spending so much less on food and clothing?
>I find it interesting that despite everything to do with health care, we're only spending approximately 4% more on medical care than we were in 1949.
4% in terms of the whole pie, but over 100% more in relative terms, which I think is more important.
>I don't know the data, so perhaps someone could enlighten me as to whether or not this is because houses are just more expensive than they used to be, or because we just like buying larger houses (possibly for status) than we used to, or whether we just have more income available to spend on houses since we're spending so much less on food and clothing?
To address the point about houses being more expensive than they used to be, I think the $/sq ft in real terms metric has increased. As people move out farther and farther out into the suburbs and exurbs, the externalities of the house increase. It's much more expensive on a per capita basis to run a full service municipality when the density is 300 people / sq mi vs 4000 or 7000 people / sq mi. It's also more expensive for utilities, etc.
4% in terms of the whole pie, but over 100% more in relative terms, which I think is more important.
>I don't know the data, so perhaps someone could enlighten me as to whether or not this is because houses are just more expensive than they used to be, or because we just like buying larger houses (possibly for status) than we used to, or whether we just have more income available to spend on houses since we're spending so much less on food and clothing?
To address the point about houses being more expensive than they used to be, I think the $/sq ft in real terms metric has increased. As people move out farther and farther out into the suburbs and exurbs, the externalities of the house increase. It's much more expensive on a per capita basis to run a full service municipality when the density is 300 people / sq mi vs 4000 or 7000 people / sq mi. It's also more expensive for utilities, etc.
The medical care number has to be distorted. I don't know any American families whose contributions toward their insurance premiums alone would amount to only 7% of spending. Not counting co-pays or co-insurance or any out of pocket costs.
To get down to 7% they must not be counting employer contributions, those who get medical care from the VA, Medicare or Medicaid, nor people going uninsured and then filing bankruptcy when they get hit with notable medical costs.
There is simply no way.
To get down to 7% they must not be counting employer contributions, those who get medical care from the VA, Medicare or Medicaid, nor people going uninsured and then filing bankruptcy when they get hit with notable medical costs.
There is simply no way.
My insurance (healthy young family of four, $1K deductible per person) costs me 12.6% of my pretax earnings, not including what my employer kicks in. It was over 14% before my last raise, and it would be even higher if my company hadn't aggressively shopped around among several insurers. That's for me as an engineer making almost 100K. What about the guy making $70K with a family of four? It is a huge drain.
Yeah. Looking at my household, mortgage and health insurance are neck and neck as the biggest costs, with food a close third. That's not even counting copays and deductables and other out of pocket stuff, in other words, the best case if no one gets sick.
Significantly behind is child care, and well behind that are taxes.
Significantly behind is child care, and well behind that are taxes.
On the flip side, I'm paying insurance premiums for only myself and spending less than 1% of my pretax income. The medical, dental, and vision is all excellent. Shop around. You can certainly do better than $1,000 a month (12% of 100k / 12).
> "You can certainly do better than $1,000 a month"
For a family of four? Not that I've seen. Even after employer contributions people in my orbit are usually looking at ~$1000 out-of-pocket (granted, pretax) for family medical/dental/drug/vision.
For a family of four? Not that I've seen. Even after employer contributions people in my orbit are usually looking at ~$1000 out-of-pocket (granted, pretax) for family medical/dental/drug/vision.
That sounds way too high. Have you looked into HSA's?
I would guess they are not taking into account employer contributions, as that is not money I as a consumer ever see in my paycheck. my medical bills (including insurance premos) the past few years average out to $1200/year (significantly less than 7% of my income). If I didn't have a job/insurance, they would be zero. I would guess there are a significant number of un-employed/un-insured, that don't have medical bills, averaging this number down.
> "I would guess they are not taking into account employer contributions, as that is not money I as a consumer ever see in my paycheck"
No, but it's money that has a direct impact on wages and given the inconsistency of rates of employer contributions, it would mean that "What Americans Spend Their Money On" is not equivalent to "What Things Cost, That Americans Buy". Similarly not counting government payments toward health-care breaks that equivalence.
I wasn't trying to dismiss a potential usefulness of seeing where net consumer spending is going, on average. I was just responding to what I saw as a casual conflation between "we're not spending much more out of pocket" with "the price of healthcare isn't that big a deal". I saw the GP post as suggesting that large year-over-year percent increases hadn't amounted to a large net impact when compared to earnings. I may have misread that, but that's the implication I was responding to.
And there's simply no way 7% of net consumer spending is the right picture from which we can deduce the impact of health cost increases.
No, but it's money that has a direct impact on wages and given the inconsistency of rates of employer contributions, it would mean that "What Americans Spend Their Money On" is not equivalent to "What Things Cost, That Americans Buy". Similarly not counting government payments toward health-care breaks that equivalence.
I wasn't trying to dismiss a potential usefulness of seeing where net consumer spending is going, on average. I was just responding to what I saw as a casual conflation between "we're not spending much more out of pocket" with "the price of healthcare isn't that big a deal". I saw the GP post as suggesting that large year-over-year percent increases hadn't amounted to a large net impact when compared to earnings. I may have misread that, but that's the implication I was responding to.
And there's simply no way 7% of net consumer spending is the right picture from which we can deduce the impact of health cost increases.
I find it interesting that despite everything to do with health care, we're only spending approximately 4% more on medical care than we were in 1949.
This is almost meaningless by itself. An actually useful number would be comparing that to say, number of doctor visits/treatments and how effective those are.
This is almost meaningless by itself. An actually useful number would be comparing that to say, number of doctor visits/treatments and how effective those are.
Maybe you and I are spending 4% more, but your employer is spending a whole lot more. I believe health insurance costs my employer $16,000/year for me.
There are definitely similar studies in other countries, although I don't have them to hand. I did just see a survey for the UK which put the cheapest areas to live with house prices 3.8 times the average wage up to about 9.8 the average wage in the most expensive, and the cost of housing and rent has rocketed up since I first started renting 10 years ago...
After the mortgage there's not a lot left to spend on anything else!
After the mortgage there's not a lot left to spend on anything else!
Perhaps someone could explain this to me, "But too many workers serving a need leads in one direction for prices: Up."
I am no economist, but I would expect the opposite. Having too many people in one field would result in a reduction in wages and prices until people started leaving that field as a result and the supply/demand ratio stabilized. What am I missing or misunderstanding?
I am no economist, but I would expect the opposite. Having too many people in one field would result in a reduction in wages and prices until people started leaving that field as a result and the supply/demand ratio stabilized. What am I missing or misunderstanding?
I agree that statement was poorly worded, but I think what they meant is that if a particular good is inefficiently produced, or rather, requires a large investment of human capital, that good is going to be more expensive than if the same good requires fewer workers. I believe that was a reference to the cost of health care.
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Suppose:
1 unit of X and Y both cost 10 man hours in 1962.
1 unit of X costs 10 man hours in 2012.
1 unit of Y costs 1 man hours in 2012.
Check out this This American Life story about how doctor oversupply in an area resulted in unneeded medical procedures being performed:
http://www.thisamericanlife.org/radio-archives/episode/391/t...
http://www.thisamericanlife.org/radio-archives/episode/391/t...
Along similar lines and even more enlightening:
http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_...
(Who provides cheap healthcare? The Mayo Clinic.)
http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_...
(Who provides cheap healthcare? The Mayo Clinic.)
Perhaps it is meant in the sense that, in a capitalist society, if 10 new restaurants open up on your main/high street to serve a "need", let's say steaks, then price for raw beef will go up since all these restaurants have to buy supply before any steaks are sold/eaten.
I think its in the sense of one, individual need. An oil change with one guy working on your car for 20 mins costs 1/4 as much as 4 guys working on your car for 20 mins (minus supplies).
I would love to see "What Americans Are Offered To Buy",the advertising spending on it, what products have the most advertising, and then the author presenting a question at the end if we really need those things people are telling us that we should (and continue to) buy the most.
Mens clothes really jumped out at me. I'd assumed since retail space for women was 7x that dedicated to men, women's clothing would be around 7x that of mens.
Something really complicated is going on making those two channels very different.
Something really complicated is going on making those two channels very different.
Some hypotheses based on anecdotal observations:
Women spend more time shopping for men and children than men spend shopping for women and children.
Women spend a lot more on shoes than men.
Women spend a lot more on accessories than men.
Women enjoy shopping more than men so retailers offer more opportunity to browse.
Women spend more time shopping for men and children than men spend shopping for women and children.
Women spend a lot more on shoes than men.
Women spend a lot more on accessories than men.
Women enjoy shopping more than men so retailers offer more opportunity to browse.
Maybe. At the very least, shoes are a separate category on that chart. One rolex makes up for a ton of less expensive accessories.
I think it's more like, the vast majority of clothes are socks, underwear, jeans and t-shirts. Simple, everyday stuff that wears out. I'd bet the sales of this stuff pretty much equals out. However, there's a layer of "nice" clothes. mens stuff is more expensive, but lasts and is fashionable longer. Suits vs dresses might be a good example.
I'd also guess men are spending more on clothes than they have historically.
I think it's more like, the vast majority of clothes are socks, underwear, jeans and t-shirts. Simple, everyday stuff that wears out. I'd bet the sales of this stuff pretty much equals out. However, there's a layer of "nice" clothes. mens stuff is more expensive, but lasts and is fashionable longer. Suits vs dresses might be a good example.
I'd also guess men are spending more on clothes than they have historically.
7x floorspace does not necessarily equal 7x sales. It simply means more choices. There could be 7 women wearing 7 different dresses and 7 men all wearing the same suit. Or turnover could be higher in men's inventory. Etc
Although I see where you're coming from, especially since sales/sqft is a big KPI for retail.
Although I see where you're coming from, especially since sales/sqft is a big KPI for retail.
Well, women's clothes is still 2X men's clothes.
Men still buy clothes. And men are not cost sensitive - women will shop for bargains, while men will just buy whatever they think they need.
I'd imagine women spend 7X as much time shopping for clothes, easily. That's why they need 7X the space. But they don't buy that much more, they just look at stuff, try it on, ask questions, drag their SO along (who takes up more space) ...
Men just walk in, see if it fits, pay up and get out. You just need a big rack of jeans / suits / t-shirts sorted by color and size, a change room, and someone to take their money on the way out.
Men still buy clothes. And men are not cost sensitive - women will shop for bargains, while men will just buy whatever they think they need.
I'd imagine women spend 7X as much time shopping for clothes, easily. That's why they need 7X the space. But they don't buy that much more, they just look at stuff, try it on, ask questions, drag their SO along (who takes up more space) ...
Men just walk in, see if it fits, pay up and get out. You just need a big rack of jeans / suits / t-shirts sorted by color and size, a change room, and someone to take their money on the way out.
I've had to encourage my gf to buy designer clothes. The conversation basically went like "why don't you buy one really nice dress that you actually like instead of 7 that you don't wear." Same with shoes, there's no point in buying crappy ugly shoes that wear out when you can spend 5x the price and get good looking shoes with a lifetime warranty.
That said I find it really hard to find a shirt with French cuffs so im probably a bit of an outlier, but I figure if I'm going to get dressed why not look good at the same time?
Note: I also find a lot of designer fashion in thrift stores because it's one of the few things that lasts long enough to make it through.
That said I find it really hard to find a shirt with French cuffs so im probably a bit of an outlier, but I figure if I'm going to get dressed why not look good at the same time?
Note: I also find a lot of designer fashion in thrift stores because it's one of the few things that lasts long enough to make it through.
A few important things that aren't being discussed:
If your income level drops, it should be relatively easy to cut back on food expenses. You can simply eat less or buy less expensive food. Not great options, but possible. On the other hand, if you income level drops, it's can be very difficult to reduce housing costs fast. Thus I would think that people are more vulnerable to unexpected drops in income.
Same thing goes for medical costs. It can be very difficult to reduce those without sacrificing health.
Another big issue is that in 1962 most households were single income. Most mothers were at home. If the husband lost his job, there were 2 potential wage earners that could theoretically renter the job market to regain the needed income. Today most households are dual income, and require all of that income to pay the bills. So if one personal loses their job, there isn't a backup worker able to enter the workforce if needed. So again, more vulnerability to reduced income.
If your income level drops, it should be relatively easy to cut back on food expenses. You can simply eat less or buy less expensive food. Not great options, but possible. On the other hand, if you income level drops, it's can be very difficult to reduce housing costs fast. Thus I would think that people are more vulnerable to unexpected drops in income.
Same thing goes for medical costs. It can be very difficult to reduce those without sacrificing health.
Another big issue is that in 1962 most households were single income. Most mothers were at home. If the husband lost his job, there were 2 potential wage earners that could theoretically renter the job market to regain the needed income. Today most households are dual income, and require all of that income to pay the bills. So if one personal loses their job, there isn't a backup worker able to enter the workforce if needed. So again, more vulnerability to reduced income.
Great points.
> On the other hand, if you income level drops, it's can be very difficult to reduce housing costs fast. Thus I would think that people are more vulnerable to unexpected drops in income.
I was shocked to see how high housing was. 31.3% just for rent or mortgage? You are screwed in a two person household if someone loses a job.
And 5.4% for utilities? I assume that includes mobile, but that feels incredibly high.
> On the other hand, if you income level drops, it's can be very difficult to reduce housing costs fast. Thus I would think that people are more vulnerable to unexpected drops in income.
I was shocked to see how high housing was. 31.3% just for rent or mortgage? You are screwed in a two person household if someone loses a job.
And 5.4% for utilities? I assume that includes mobile, but that feels incredibly high.
What's the median household income post tax? Can't find a good figure but it's around $50k pretax. Which is I guess 40k ish post tax, $3.5k or so per month. So 5% of that is $175.
Phone, cable, water, trash, electricity?
Phone, cable, water, trash, electricity?
Lenin said that there are in progressive order: lies, total lies, and finally statistics.
Anybody here spending 3% of their income on health care? I mean in most cases insurance premiums alone are much more than 3% of average income. Not to mention things like cancer that cost about 500k on average to treat. Who takes this data seriously?
Anybody here spending 3% of their income on health care? I mean in most cases insurance premiums alone are much more than 3% of average income. Not to mention things like cancer that cost about 500k on average to treat. Who takes this data seriously?
It would be interesting to see how total income is allocated. That would include income taxes, debt payments, and other things that aren't purchases.
Also, I think it's interesting that recreational spending has increased very little. Are we already saturated with all the recreation we want?
Also, I think it's interesting that recreational spending has increased very little. Are we already saturated with all the recreation we want?
Why would we spend more on recreation when we have less time for it?
Grocery spending versus restaurant/ deli spending stands out to me: 8.6% on Groceries vs. 5.7% on some version of eating out.
In a better scenario, groceries, being cheaper and generally healthier than food "eaten out" would make up a bigger percentage of total food spend.
That said, as a 20something single guy, I don't remember the last time I went to a grocery store and i think i manage my money pretty well.
I'd like to see these food spend #s (and the rest of these #s) broken down for income levels and other demographics
In a better scenario, groceries, being cheaper and generally healthier than food "eaten out" would make up a bigger percentage of total food spend.
That said, as a 20something single guy, I don't remember the last time I went to a grocery store and i think i manage my money pretty well.
I'd like to see these food spend #s (and the rest of these #s) broken down for income levels and other demographics
Groceries make up a smaller percentage partially because they are so much cheaper than eating out.
As for it being healthier, it all depends on your choices. If I am eating in, but having noodles and microwave pizza it will be much less healthy than getting a salad out. I have been on business trips where I ate every meal at a restauraunt for more than two weeks, but it was a relatively healthy diet.
As for it being healthier, it all depends on your choices. If I am eating in, but having noodles and microwave pizza it will be much less healthy than getting a salad out. I have been on business trips where I ate every meal at a restauraunt for more than two weeks, but it was a relatively healthy diet.
The implication of your comment is you eat out 3 (or more/less) times a day, 7 days a week? Out of curiosity, what kinds of foods are you buying? How much would you say you spend a week on food?
In my early 20s I was somewhat like the OP - I would eat out for pretty much every meal. The trick to it was only eating twice a day, or once if you could manage it. The end result was actually fairly inexpensive depending upon where you were eating.
Of course, that was back when my body could handle this kind of abuse.
Of course, that was back when my body could handle this kind of abuse.
[deleted]
So a "niche" startup with a solid monetization plan would involve selling cheap alcohol and cirrhosis pills?
(j/k)
(j/k)
Why why why are they having a two dimentional represntation of a 1 dimentional data point? If they wanted something like this to work you should use squares instead of circles regardless.
My only experience is reading Tufte, so I have a question for you. If you based the circles' area on the data, rather than making the circles based off the radius based off the data, you wouldn't be misconstruing the data, right?
Engle's law - the consumption of food drops as income rising. It's sad that Engle had such a similar name to Engles, because he had a lot of interesting stuff to say.