Voluntary Savings and Consumer Behavior

Abstract

To the majority of Americans, a dollar has only one function. It is to be used immediately in the purchase of food, clothing, or shelter. Few Americans have ever had difficulties in finding an outlet for their incomes. Most Americans live from one pay day to another and are seldom able to save much surplus above living expenses. The end of a given year finds few of them with balances in the bank or money in their pockets. Two facts account for this condition. There is first the fact that the majority of persons who receive incomes in the United States receive comparatively small incomes. A second reason is that necessary living expenses are based upon psychological reactions as well as upon physical requirements. The first fact is too well known to require extensive comment. The only really extensive survey made of the entire nation on the distribution of income was made by the co-operation of various governmental agencies for the year 1935-36. In general, according to this study of consumer incomes, one-third of all American families and individual consumers had annual incomes of less than $780, one-half less than $1,070 and two-thirds less than $1,450. About nine-tenths received less than $2,500. About two per cent of all consumer units received incomes of $5,000 or over, and less than one per cent received $10,000 and over.1 The war has increased the incomes of many. It has not, despite isolated cases, raised the incomes of the majority out of what is considered the lower income groups. Total manufacturing wages have risen tremendously. To many individuals it has meant an income where no income has existed before. To many it has meant a job where there was no job before. It has not meant an increase in the incomes of the majority to the level of income enjoyed by the relative few before the war.