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Interoduction

The reason this book exists lies in the profound, the shining, the glorious income revolution which has occurred in the United States just in my generation.

We are today the greatest middle-income nation the world has ever known. Just in the years since the cataclysmic depression of the early thirties we have turned ourselves from a country built in the shape of an economic pyramid—with most people living at very low-income levels, and with only the few wealthy concentrated at the top—into a country built in the shape of an economic diamond—with most people living in the middle-income levels and fewer and fewer concentrated at the very top and the very bottom. In this single generation, we have lived through a bloodless revolution which must go down in world history as among the most exhilarating ever in objective and achievement.

Let me give you a few statistics to dramatize just how exciting has been the change in this instant of time:

You're only an average American family or single individual if your personal income before taxes is $6,520. That's income expressed in "constant" dollars—meaning the income figure has been adjusted to eliminate the impact of price increases since World War II. It compares with an average personal income of American families and unattached individuals of $5,290 in 1947 and $4,070 in 1929.

There are millions of families like yours in this country if your in come tops $10,000, for the number of families in the over-$10,000 class has soared from 3 per cent in 1947 to 12 per cent now. At the same time, the number in the under-$2,000 class has shrunk from 27 per cent to 13 per cent.

You're among the 67 per cent of America's families and single individuals if your before-tax income is more than $4,000 and among the 42 per cent if your before-tax income is more than $6,000. As recently as 1947, the comparable figures were 31 and a scant 12 per cent.

You're in the minor one-quarter of America's consumers if you don't have some liquid assets, such as money in a checking or savings account, savings and loan association shares, United States Savings Bonds.

You're no longer at all unusual if yours is a husband-and-wife working team. As recently as 1949, only 30 per cent of all families in the highest one-fifth income bracket included a work­ing wife; now four out of ten of these families do.

Finally, you're average if your family has marched up the living standard ladder during this decade. The real income of American families—which don't forget means income after taxes and after allowing for price increases—has risen by almost one-fourth in the postwar period and climbed at a rate averaging 1 3/4per cent a year since 1955.

How does this explain this book?

It explains it because for the first time in the history of our country, the majority of Americans are earning enough income to be acutely interested in reading in simple language about trends in paychecks, jobs, living costs, taxes, and the like. This was not so in previous generations when the majority of Ameri­cans were at the bottom of the income scale, earning barely enough to cover the basic necessities of life and the few who were at the top preferred their financial news to be written in the most technical language.

But the America of our generation is a land of millions who have an income which not only covers their necessities but which also permits them discretion on how they spend or save what is left after they have paid for the necessities.

The America of our generation, therefore, has become deeply concerned with money, with the economics of everyday life. The America of our generation wants to know what is happening in the world of money and why what is happening is happening. In a very real way, this book reflects this generation's interests.

And I'm positive that the income revolution of the 1940s and 1950s will be intensified in the 1960s.

By 1970, I think at least half the families in this country will be in the $7,500-and-over bracket after taxes. These families will have more than discretion over how they spend and save. Along with this, they will have the choice of a whole new way of life, involving vastly expanded leisure time and new inventions which are now only in the dream stage.

The reason this book exists lies also in the great upheaval in the position of the American woman which has taken place just in the past twenty years.

When World War I ended, the women who had gone into the factories returned to their homes and their kitchens, and the working woman was the rare exception. During the thirties, the working woman was under the tremendous handicap of com­peting for scarce jobs. But during World War II, the Ameri­can woman really went to work and this time she did not return to her kitchen. This time she refused to be relegated back to a role she considered unrewarding or unsatisfactory. This time she insisted on the right to earn her own living and to be proud that she was doing so. As the American woman has gone out of the home and into the job market, she has become increasingly aware of taxes, social security deductions, stocks, bonds, and other economic factors. And as she has be­come aware of how important these aspects of life are, she has demanded information about them.

Again, let me illustrate this point with a few statistics—but this time in the form of a little quiz which I wish you would try to answer as you read:

How many years will a girl coming out of school today spend in work outside the home?

What do you think the chances are that a woman will be working in a job in her middle and later years—when she's no longer under 25, but over 45 and 50?

What would you guess is the percentage of married women who are working today?

How would you guess this percentage compares to that for single working women?

What about the percentage of women who are working who are also mothers? How small would you say it is?

And how many women altogether are working?

Since this is only an introduction to a book, I'll not prolong this test—although I could easily do so.

Instead, I'll preface the list of the answers with a wager; the majority of you have flunked—and flunked badly.

For here are the answers.

How many years will a girl coming out of school today spend in work outside the home? Twenty-five years or more.

What are the chances that she'll be working in her middle and later years? The chances are about as good that a woman of 50 will be working as one of 20. In 1940, more than half of all employed women were under 25 and one-fifth were over 45. Now, one-fifth are under 25 and almost two-fifths are over 45.

What is the percentage of married women who are working today? About 6 out of every 10 women now working are married, and 5 out of 10 are over 40 years of age.

How does this compare to the percentage of single working women? Obviously, the married working woman now decisively outnumbers the single working woman. While it is still com­mon folklore that the single woman dominates the female working force, the fact is that in our generation alone, a com­plete revolution has taken place and the married woman now dominates the working force.

What about the percentage of women who are working who are also mothers? Even more striking than any statistic I've al­ready given is the fact that nearly 2 out of every $ mothers whose children are of school age are in the work force. The so-called career woman whose ambition for work overwhelms her desire for marriage and children is, in short, more a fiction than a fact.

And how many women altogether are working? Over 23,000,-000, 36 per cent of all women of working age, which is a whop­ping one-third of the labor force.

Now, once more, why does this explain this book?

The American woman of this decade is as avid for knowledge about jobs, paycheck trends, social security changes, taxes and the like as the American man. She doesn't want to pretend to ignorance in the mistaken belief that if she does seem thor­oughly uninformed, a man will think she is cutely feminine. She doesn't want to be a bore to her husband because he can't discuss with her things that matter terribly to him and she doesn't want to be a bore to herself either. The eagerness of the American woman for information about finance is, I think, one of the truly new developments in the world of communi­cations.

I forecast with absolute certainty that the upheaval in the position of the American woman will go on in the new decade. Actually, the official forecast of the United States Labor De­partment is that over one-half of the new jobs which will open up in the next five years will be taken by women. The sex bar­riers in employment are being broken down daily. The inexcusable discrimination in pay against women working in jobs identical with those held by men is being fought with increasing success.

The reason this book exists lies in the unprecedented way of life we as a nation have developed since the 1930s.

We have embraced installment buying to the point where right now, our installment debts alone top forty-two billion dol­lars compared with an infinitesimal two and a half billion at the end of World War II, and less than fifteen billion as recently as 1950. We have embraced home ownership to a point where we are in fact a nation of home owners and we are buying 1,200,000 to 1,500,000 new houses a year as well as buying and selling millions of older houses a year. We have created a spec­tacular social security system. A whopping 14,800,000 of us al­ready are getting social security pensions and practically every individual in this country is entitled to some form of pension. We have, through the United States Savings Bond program, made virtually every American  familiar with  securities.  Even today over forty million of us own more than forty billion dol­lars of outstanding savings bonds and eight million of us are still buying these bonds regularly under payroll savings plans.

I need not elaborate more on this point, I know. A person who has installment debts is interested in reading about install­ment buying. ... A person who has savings bonds is interested in reading about savings bonds. ... A person who owns a home or is planning to buy one is interested in reading about the direction of home prices and about trends in all the goods and services that are part of home ownership.

But I do want to emphasize that the way of life we have developed in the past two decades will become even more distinct in the new decade. Buying on the installment plan easily could double. Building, buying, and ownership of homes will take off in an explosive upsurge in the mid-sixties as the babies born after World War II reach marrying age and set up homes of their own. There is no mistaking the widening trend toward ownership of securities by the average American family.

The reason this book exists lies in the vast spread of owner­ship of stocks among the millions in the past ten years.

Of course, this point ties in with the previous points. Only a middle-income nation could be a nation of stockowners. Only a nation which included millions of women earning their own pay could include millions of women investors. Only a nation which included millions of employees buying savings bonds under payroll savings plans also could include an increasing army of employees buying common stocks under the same or similar payroll savings plans.

Look at these dramatic statistics.

The number of individual stockholders in our nation is now over 13,500,000, more than double our share-owning population as recently as 1952, and 50 per cent more than the total of stock­holders as recently as 1956.

Today, one out of every eight American adults owns stock in a public corporation, against one out of every twelve four years ago, one out of sixteen only eight years ago.

Recently, the number of shareholders has been rising at an unprecedented rate of over 1,000,000 a year.

Almost half of all stockholders today are in the $5,000-$10,000 bracket.

The average stockholder has a household income of $7,000.

Women shareholders outnumber men by 52.5 to 47.5 per cent.

Housewives who own stocks total 4,000,000—they are the largest single group in the stock market.

What's more, these figures do not take into consideration the 110,000,000 Americans who indirectly own stocks through their savings in pension funds, insurance companies, and other financial institutions which have investments in stocks. They do not cover 1,400,000 who own stock in private corporations only.

Each new statistic is more amazing than the last. Each under­lines the fact that the stock market is the financial heart of America.

This is so because one of every eight shareholders has a wife, child, or other dependent almost as intimately involved as the direct owner of the stock.

This is so because in the 55-to-64 age bracket, one of every six Americans is a shareowner. Our senior citizens are increas­ing at an exploding pace, are becoming more powerful.

This is so because stock ownership no longer is concentrated in the Northeast. New York State still leads in the number of shareowners, but actually the South Central and South Atlantic regions have shown the largest increase in shareholders in the past three years and California's gain in stockholders has been the greatest of all. Leading all cities in the proportion of share­holders—better than one in five—are Berkeley, Hartford, Pasa­dena, Rochester, St. Petersburg, and Wilmington. There isn't an area, a town, a city, which is not profoundly affected by the market's movements.

This is so because of the way Americans have been getting into the stock market and because of the sort of people they are. One out of five go into the stock market via a company's employee stock purchase plan and over 1,340,000 are now investing regularly through these plans. Of today's shareholders 1,335,000 are members of labor unions.

Nothing like it has ever happened anywhere. Wall Street is not just wooing Main Street. Wall Street and Main Street are becoming one. Actually, it might be said that for the first time in world history the financial peace of mind of our nation's mil­lions of average folks is directly and inextricably bound up with the fluctuations of its stock market.

Again I will make my forecast for the future. The trend toward ever-mounting ownership of stocks by the masses is world-wide. It is being spurred by the rising level of incomes, the increasing knowledge of stocks, the acutely publicity-conscious New York Stock Exchange and leading stockbrokerage houses across the country, the development of employee stock buying programs, various monthly investment plans, and investment clubs. There will be millions more owners of stocks by the mid-sixties than there are today. And although I do expect severe price spills from time to time, I do not expect that there will be ever again any­thing comparable to 1929 in our country to wipe out millions of stockholders and destroy all interest in owning stocks (as well as capitalism itself).

And, finally, the reason this book exists lies in the simple word "inflation."

Just as a happy marriage is not nearly the news that a juicy divorce is, so a long era of price stability is not nearly the news that a long era of violent price change is. And we have gone through an era of violent changes in the cost of living since World War II.

Permit me one last dramatization via statistics:

In 1940, a quart of milk cost under 12 cents; in 1950, a quart cost 22 cents; today, the price in my neighborhood store is 29 cents.

In 1940, a loaf of sliced white bread cost under 8 cents; in 1950, a loaf cost under 14 cents; a loaf now costs over 19 cents.

In 1940, a leg of lamb, per pound, cost around 28 cents; in 1950, lamb per pound was over 71 cents; it is now over 77 cents.

In 1940, a New York subway fare was a nickel; in 1950, it was a dime; in 1961, it is 15 cents. And in the same period, bus fares in my home town have gone from a nickel to seven cents to 15 cents.

This is what inflation has been in your terms and mine—a sharp rise in the prices of goods and services we use every day, an extraordinarily rapid climb in the cost of living in a relatively short period.

Because we lived through this inflation between 1940 and 1950 and 1960 it does not follow that we will repeat this ex­perience between 1960 and 1970 and 1980. It does not follow, not at all. In fact, it is my strong and growing belief that much of the recent outcry against violent inflation has been distinctly belated and we saw the worst of inflation before this decade even opened. We are into a new price cycle, into the first bona fide buyers' market since the start of World War II.

Virulent inflations simply do not thrive in a nation which has more than ample capacity to produce goods, which has no shortages of materials or manpower, which is into a phase of the fiercest competition for the consumer's dollar both from industries at home and from corporations headquartered outside our borders. You'll find considerable data to back up this judg­ment in Chapter 6. Actually, it well may be that, instead of curbing runaway inflations, preventing and cushioning recessions will be a top challenge to our nation in this new decade. You'll find hints on this throughout these pages too.

There could be little interest in a book of this sort in an im­poverished nation or a nation in which the wealth was con­centrated among the few. We are not impoverished. Our wealth is not concentrated. There could be little concern with a news­paper column such as mine in a nation which was stagnating and turning backward. We are not stagnating. We are, in fact, through research and our desire to live up to the standards set for us by the men who founded our nation, creating new devices for expansion and for better living standards all the time. There certainly could be no column such as mine and no book such as this in a nation in which the woman was a second-class citizen.

In compiling this book, the editors and I divided the many hundreds of columns written since 1954 into 11 chapters, each covering a subject of broad interest. Before, in between and fol­lowing various columns, you'll find remarks or guides designed to elaborate on a fundamental point, emphasize a trend or fore­cast a future. Some columns, dated years back, were selected be­cause my editors considered them so prophetic. In these instances, if the prophecy's fulfillment is self-evident, I've left the story alone. In other cases, I've "painted the lily" with a footnote or two. I hope what you read in these pages will help show you.

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