Over the past century, shelter has replaced food as our biggest household
A long line at JP Licks is an inconvenience, but it may also signal a turning point in Boston’s spending habits. While the rest of the country spends less and less on food, we’ve started a reverse trend, devoting more of our paychecks to eating in and dining out—which may explain the recent proliferation of high-end restaurants, Whole Foods supermarkets, and premium ice-cream shops in the area.
But across America, and even in Boston until quite recently, the percentage of an average household’s income spent on food has steadily declined. This trend reflects “improved living standards,” according to the authors of a recent report from the US Department of Labor, titled 100 Years of US Consumer Spending: Data for the Nation, New York City, and Boston. The report is generally as dry as toast, but it is full of tidbits that demonstrate how much the Hub has changed over the years, and how it was, and is, different than the rest of the nation.
Take, for example, my favorite sentence in the 71-page report, referring to present-day spending habits: “In buying groceries, New Yorkers allocated more for meat, poultry, fish, eggs, fruits, vegetables, cereal, and baked goods than did Bostonians, who spent more on…dairy products.” (Ellipses added because the US Department of Labor would never pause for comic effect.) In other words, we’re pigs when it comes to ice cream. We even insist on turning clam chowder into a dairy product.
And while Boston is like the rest of the nation in benefiting from lower grocery prices over the years, we may be developing more expensive tastes to compensate. In 1901, the average American household spent $327 for food, which accounted for 42.5 percent of all spending. Since the average household was in the red that year—spending $769 while receiving $750 in income—it’s not likely that much of that food bill went to gourmet items. As of 2003, the average annual food bill in the US was $5,357, based on data from the Consumer Expenditure Survey (CES), but that represented a record-low 13.1 percent of all household spending. In Boston, however, an opposite trend was beginning. After bottoming out at 11.6 percent of all household spending in 1997, the food section of the pie chart was up to 13.5 percent in 2003. In five years, annual spending for comestibles went from $4,297 to $5,627, greatly outpacing inflation in the same category at the national level ($4,750 to $5,357). Breaking down the grocery bill by food groups, 27.3 percent went to “meat, poultry, fish, and eggs,” down from 48.4 percent in 1901. “Cereals and bakery products,” which accounted for 11.0 percent in 1901, was up to 15.0 percent. Since there are fewer children—and certainly fewer livestock—in Boston now, I’m guessing that more of the increase was due to dessert than to oats and shredded wheat.
Bostonians didn’t just buy more ice cream cones in 2003. Annual spending in almost every major CES category increased from 1997 levels. Transportation went from $6,698 to $7,175; health care rose from $1,753 to $2,007; and “reading and education” went from $862 to $1,281, though the report doesn’t say whether that extra 400 bucks went to preschool classes or subscriptions to Lucky magazine. Even annual spending on alcoholic drinks ($504) and on tobacco ($273) was up in these supposedly abstemious times—and those were the only two categories in which Bostonians spent more than New Yorkers. The only place where people in Boston appear to be cutting back is in clothing: Hub residents spent $1,610 on “apparel and services” in 2003, a cool grand below the New York average of $2,638 and slightly below the national average of $1,694. No wonder Filene’s Basement has outlasted Filene’s itself.
For the most part, 100 Years of US Consumer Spending is the story of how most Americans have been benefiting from rising incomes even as some of the things we can’t live without have been getting cheaper and cheaper (in constant dollars). In 1901, the average American family devoted 79.8 percent of its expenditures toward “necessities”—food, clothing, and shelter. In New York, that figure was 80.3 percent; in Boston, it was 86.0 percent. Fast-forward to 2003, and you’ll see why there’s such a big market for iPods and SUVs. The average American family devoted only 50.1 percent of its spending toward necessities. In New York, the figure was 56.7 percent. But the biggest drop was in Boston, which passed New York on its way down to 53.8 percent.
To a typical household at the beginning of the 20th century, income was something that said a quick hello and even quicker good-bye. But these days, more of it hangs around while people figure out what to do with it. “Between 1901 and 2003, the average US household’s income increased 67-fold, from $750 to $50,302,” the authors write. “During the same period, household expenditures increased 53-fold, from $769 to $40,748.”
That comparison might actually understate the growing gap between what we have and what we need. A pound of butter, part of Boston’s favorite food group, costs only a bit over 10 times what it did a century ago. In 1901, it was 27 cents, or four cents more than the average hourly wage of a factory worker. Three years ago, it was up to $2.81, or about 12 minutes’ worth of work for the average factory worker.
Butter is also a cheap way for waitstaff to pacify us when we go out to eat, which we do with a frequency that would astonish—well, pick any generation that came before you. As Barbara Ehrenreich put it in Nickel and Dimed, “if you wonder why Americans are so obese, consider the fact that waitresses both express their humanity and earn their tips through the covert distribution of fats.” In a similar vein, a few months ago the Federal Reserve Bank of Boston released “Social Dynamics of Obesity,” a paper by economists Mary Burke and Frank Heiland that argued a correlation between lower grocery bills and bigger girths in America. The authors hint at a reverse-Malthusian nightmare in which both our pantries and our bodies take up ever more space: “…[T]he body-weight standard becomes more relaxed as average weight increases in response to a food price decline; the relaxed standard then leads to further weight increases.”
Then again, perhaps the falling cost of entertainment is more to blame for our sedentary lifestyles. The AP reported in September that the average American home now has more television sets (2.73) than people (2.55), which must have something to do with the fact that a Magnavox 21-inch color set cost $495 in 1955 and a Samsung 19-inch set cost $340 four decades later, despite the fact that average household income was 10 times higher. But it seems that cheaper diversions only fuel the desire for more of them. In 1901, the average American household spent $12 a year, or 1.6 percent of all expenditures, on entertainment (not including reading material); in 1950, when TVs were starting to go mainstream, that figure was up to 4.4 percent. And in 2003, despite the lower cost of electronics, the share was up to 5.1 percent, or $2,069 a year, a trend that was pretty much the same in Boston.
If costs have plummeted for food and clothing—the latter replaced by transportation as one of the Big Three—the same can’t be said for shelter. In 1901, housing (a category that includes fuel and furniture) ate up 23.3 percent of an average American household’s expenditures, and the figure was 29.9 percent in Massachusetts. (Specific figures for Boston don’t go back quite that far.) By 1960, it had taken the lead as the costliest part of a family’s budget, up to 29.5 percent nationally and 31.4 percent in Boston, and it has only strengthened its claim on first place since then. In 2002, the cost of the roof over one’s head and the pipes beneath one’s feet was at 32.8 percent of all household expenditures nationally and 36.4 percent in Boston. The average household in Boston spent $15,211 on housing that year—significantly higher than the national average of $13,359, but still well below New York’s $18,919. Two-thirds of that went to mortgage or rent payments, with the remaining money split among utilities and fuels ($2,676), furniture ($1,212), and “household supplies” ($1,179).
Of course, the increase in housing costs has been accompanied by some pretty significant changes in what makes an average household. In 1901, only 19 percent of Americans owned their homes, a figure that was surely lower in a major city such as Boston. By 2003, two-third of American households, and 59 percent of Bostonian households, were property owners. And at the start of the 20th century, the average American household included 4.9 people; now the average is little more than half of that, and Boston is especially roomy, with 2.3 people per household.
These changes don’t completely make up for the fact that home prices and rents have outstripped inflation during the past few decades, and the higher housing costs in Boston versus the rest of the US don’t make it easy to keep families here. But at least we don’t have to deal with two household costs each eating up more than a third of a typical family’s annual income.