In Pursuing Happiness: American Consumers in the Twentieth Century, economist Stanley Lebergott asked us to imagine that automobiles, penicillin, electric washing machines, refrigerators, disposable diapers, electricity, television, and “every economically significant good added since 1900” all disappear. Next, he tells us that the remaining items would include “salt pork, lard, and houses without running water.” You get the picture. Our purchases have changed a lot during the past century.
Next, I checked a Bureau of Labor Statistics report (2008 data) too see how we spend our money today. In descending order, the average household uses close to 34% of its total spending on housing; 17%: transportation; 13%: food; 11%: personal insurance and pensions; 5.9%: healthcare; 5.6%: entertainment; and 3.6%: apparel and services.
As you might expect, the amounts are quite different when we look specifically at income levels. For example, a family spending $34,687 annually will use $4,818 on food. At the other end of the income scale, a family spending $124,678 will allocate $13,011 to food.
The Economic Lesson
Just an interesting spending fact today. On July 4, 1776, Thomas Jefferson noted that he spent 27 shillings on 7 pair of women’s gloves.