100 Years of Consumer Spending
Spending habits have changed significantly over the last century. We have seen great increases in the percentage of income that is allocated to housing and transportation compared to spending on food and clothing, which has fallen. The following is a detailed look at consumer spending and how it has changed over the last 100 years.
Spending At The Turn Of The Century
In 1901, food and housing took up about 60 percent of people’s incomes. About 40 percent of a consumer’s income was spent on food and about 20 percent of a consumer’s income was spent on housing. 20 percent was spent on apparel while virtually nothing was spent on transportation. Health care took up about 5 percent, entertainment was2 percent and books were 1 percent. In 1901, 1 percent went for alcohol and the other 11 percent was used for everything else.
The War Years
Between the years of 1934 to 1946, food and housing together took up about 60 percent of incomes, with 34 percent used for food and 26 percent for housing. Clothing used 12 percent of income, and transportation another 10 percent. Health care took up 3 percent and entertainment was raised to 5 percent. Reading took less than 1 percent and no official numbers are available for alcohol because prohibition. Other expenses claimed the final 9 percent.
Boomer Generation
In 1950, food and housing together took up about 55 percent of people’s incomes, with 34 percent used for food and 21 percent for housing. About 12 percent of a consumer’s income was spent on apparel and 11 percent on transportation. Health care took up about 5 percent, entertainment required about 5 percent and reading remained at 1 percent of the income, the same as alcohol. Other expenses claimed the final 10 percent.
Fast Forward
From 2002 to 2003, food and housing together took up about 45 percent of incomes, with 13 percent on food and about 33 percent on housing. About 4 percent was spent on clothing and 22 percent on transportation. Health care took up about 6 percent, entertainment required about 5 percent And reading was about 2 percent. Alcohol was about 1 percent of a consumers income. Other expenses claimed the final 15 percent.
Yearly Income vs. Expenditures
The relationship between income and expenses has varied over the years, with income generally growing faster than expenses until the 1970s. During the following decade, it dropped significantly.
In 1901, income in excess of expenses was -2.4 percent. In 1918, income in excess of expenses was -5.5 percent. In 1934 to 1936, income in excess of expenses was 0.78 percent. In 1950, income in excess of expenses was 10.1 percent. In 1960 and 1961, income in excess of expenses was 19.4 percent. In 1972 and 1973, income in excess of expenses was 26.9 percent. In 1984 and 1985, income in excess of expenses was 6.3 percent. In 1996 and 1997, income in excess of expenses was 11.9 percent. In 2002 and 2003, income in excess of expenses was 18.9 percent.
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