Workers' savings and income in 1945

J L_ I -


Workers' Savings and Income

in 1945 i wNIV ,
riojM ~NTS~P


Introduction i .
U.S. DEPOSITORY
During the war much was said and written about the
amount of money being saved by the American people.
Different sets of figures were produced to show that a lot
of money was being saved. None of the figures showed,
however, how much money was being saved by workers'
families and how much was being saved by families in
other groups.
So about the middle of 1946, the Federal Reserve Board
published the results of a survey which had been made
during the first 3 months of that year. The survey was
made by interviewing a number of families' all over the
country, and asking them a series of questions about their
incomes in 1945 and about the money they had saved. The
interviewers found out from each family how much money
that family had put into Government bonds, and how much
money it had in the bank when the year 1945 ended.
This is what the interviewers found:

SAVINGS
About 24 percent of the American families had no sav-
ings at all in 1945. Another 29 percent of the families
had less than $500 per family. In other words, over half
of the families had so little money in the bank or in bonds
that their savings were insignificant from the point of view
of the national economy.
Sixty percent of the savings belonged to 10 percent of
1 While we are discussing families and their savings, the information in the
Federal Reserve Board Survey is given in terms of "spending units." A spend-
ing unit is a little different from a family. According to the Federal Reserve
Board definition, a spending unit is "all persons living in the same dwelling and
belonging to the same family who pool their incomes to meet their major
expenses."


L


I






the families. The top half of the people had 97 percent of
the savings; the bottom half had 3 percent of the savings.
This is how savings were distributed by families:

Who Had The Savings


the
the
the
the
the
the
the
the
the


families
families
families
families
families
families
families
families
families


had
had
had
had
had
had
had
had
had


The
The
The
The
The
The
The
The
The
The


60% of
77 1 of
87,; of
93C; of
97% of
99'% of
100% of
---- of
----- of
-.-....- of


The average amount of money saved was $1,750 per
family. That is, if the money and bonds were equally
divided among all those that had savings, each family would
have had $1,750. However, the 50 percent of the families
that had the least amount of savings or none (the group
that together owned 3 percent of the money) averaged sav-
ings of only $150 per family. The richer half of the fami-
lies averaged $3,350 per family.

The average holding by each group in the population was
as follows:

The top 10% of the families held 60% of all assets.
They averaged holdings of $10,500 per unit.
The w..r/ 20'1 of the families held 27% of all assets.
They averaged holdings of $2,350 per unit.
The next 30% of the families held 12%' of all assets.
They averaged holdings of $700 per unit.
The bottom 40 ; of the families held 1 ; of all assets. They
averaged holdings of $40 per unit.

INCOME
SThe figures on savings are, of course, part of the same
economic picture as the figures on income. For that rea-
son, the Federal Reserve Board got the figures on income in
1945, as well. This is what the figures on income showed:


top
top
top
top
top
top
top
top
top
top


10%
*20%
30%
40%
50%
60'
70%
80 %
90%
100%


of the families had


the
the
the
the
the
the
the
the
the
the


savings
savings
savings
savings
savings
savings
savings
savings
savings
savings


'







The family in the middle on the income scale had about
$2,050 in 1945, that is, half of the families reported in-
comes of more than that amount; the other half reported
less than $2,050.
Ten percent of the families got 29 percent of the money
earned in 1945. The lowest paid families in this group
earned $4,450. In other words, 90 percent of the families
in the country earned less than $4,450 in 1945.
Forty percent of the families earned less than $1,700 in
1945.
This is the way income was distributed in 1945:

Distribution of Income in 1945


of the families had


the
the
the
the
the
the
the
the
the


families
families
families
families
families
families
families
families
families


had
had
had
had
had
had
had
had
had


29% of the income


45";
58%;
69';
78%
85%
91%
96f
99%
100%


the
the
the
the
the
the
the
the
the


income
income
income
income
income
income
income
income
income


The following table shows the percent of families in each
income class and the percent of the savings which they held
in 1945:


Income class


$7,500 and over
$5,000-$7,499 .
$4,000-$4,999 .
$3,000-$3,999
$2,000-$2,999
$1,000-$1,999
Under $1,000
All classes .


* 0 S S S S
* S 0 0 0 S


* S 0


* S S S S S
* S S S S S
* S 0 5 5 0


1 Based on 1945 money income before taxes.


Percent of the
families

3
3
7
15
23
27
20
100


Percent of the
savings held
in 1945

23
13
10
16
17
14
7
100


The
The
The
The
The
The
The
The
The
The


top
top
top
top
top
top
top
top
top
top


10 ;
20~
30
40 ;
50%~
60%
70%
80 (
90 -
100%


. .
. .




UNIVERSITY OF FLORIDA
Ili E lllll HI l I 1111 IfllUII HW IJ llill l
3 1262 08860 0100
INTENDED USE OF SAV L N
The people interviewed were also asked what they in-
tended doing with the money they had saved. Here is a
summary of the answers given:

Major Purposes For Which Money Was Saved
Percent
Future protection in general, "a rainy day" --------------------- 29
Sickness, accident, old age, and retirement ------ ----------- 45
Unemployment and depression -----.--.----------- 7
Children's future ---------------------.--------------- 17
Purchase of a house or other real estate--- ------------- 17
Other investment -------------------------- 7
Buying durable goods, travel, or other consumption 9
Payment of debt __---------- ----------------------- 13


FOR FURTHER READING
NATIONAL SURVEY OF LIQUID ASSET HOLDINGS.-Parts
1-3. U. S. Department of Agriculture.
FISCAL POLICY FOR FULL EMPLOYMENT, by J. H. G. Pier-
son. National Planning Association, 800 21st Street
NW., Washington 6, D. C., 1945. Price, 25 cents.
POSTWAR ECONOMIC STUDIES.-No. 1-Jobs, Production,
and Living Standards. No. 3-Public Finance and
Full Employment. No. 4-Prices, Wages, and Em-
ployment. Federal Reserve Board. Price, 25 cents.
THE ECONOMIC REPORT OF THE PRESIDENT-January 8,
1947. U. S. Government Printing Office.


The information in this leaflet was taken from the reports of a
survey made for the Federal Reserve Board of Governors by the
Division of Program Surveys, Bureau of Agricultural Economics,
U. S. Department of Agriculture. Free copies are available from-

U. S. DEPARTMENT OF LABOR
DIVISION OF LABOR STANDARDS
WASHINGTON 25, D. C..

FEBRUARY 1947


C6--52250-1 U. S. GOVERNMENT PRINTING OFFICE

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