Country and City Incomes Compared in 1927
IN COMPARING purchasing power of farmers and city-dwellers, one important fact is generally overlooked, contends Advertising and Selling (New York), namely, that "to live on the same standard as the farmer, the city family must have an income that is two-thirds larger than that of the farmers." As the basis for this assertion it is noted that the United States Department of Agriculture recently made a survey, "the results of which proved that an $1,800 cash income on the farm is as good as a $3,000 income in the city." As the editor of the advertising fortnightly reminds us:
$1,800 IN THE COUNTRY EQUALS $3,000 IN TOWN
A study of the living expenses of 2,886 typical farm families in several widely separated States was made. It was found that these expenses averaged about $1,600 per family. This $1,600 included $684 worth of goods raised on the farm, or provided by the farm, such as food, fuel, and housing. In other words, about two-fifths of the expenses of each farm family are secured from the farm in the form of goods. To pay their expenses, these typical farm families had to have a cash income of only about $900.
This is a fact about the farm market that is steadily overlooked. We are always comparing city incomes with farm incomes, to the disadvantage of the latter. We forget that the urban family with an income of $3,000, which is a typical city income, is no better off than the farmer whose cash income is only three-fifths of that figure. The city man's income is gross. From it must be deducted food, rent, fuel and other items, for a large part of which the farmer does not have to make a cash outlay.
It may, therefore, be inferred from the Department of Agriculture's figures that if a farmer has a cash income of $1,800, it gives him the same buying power that the city man has with a $3,000 income. With his elemental necessities largely provided directly from the farm, the farmer's family can use most of its cash income to buy conveniences, comforts, and luxuries.
Source: The Literary Digest for February 5, 1927