8 COST OF LIVING IN THE UNITED STATES
probably in other cities, the local chamber of commerce
collects prices and prepares an index each month. In Detroit,
the Visiting Housekeeper Association, a philanthropic organi-
zation, each month calculates the cost of maintaining cer-
tain types of families. In some localities an important
industrial concern has prepared an index number. All of
these local numbers are based on changes in retail prices
of the goods and services entering into an average family
budget, weighted according to consumption.
The main reason for the origin and continuation of all of
these index numbers of the cost of living has been an agree-
ment, or at least an existing practice, that wage adjustments
should be made with price changes. This procedure was for
the most part generally accepted during the period of rising
prices up to 1920, although on various occasions in preceding
years' attempts had been made, sometimes successfully, to
establish wages on the basis of estimates of the actual cost
of living based on a family budget. In wage arbitrations
since 1920 the budget system of wage determination has
come in for greater consideration and for a time the country
was flooded with estimates of the minimum cost of living;
budgets for families with incomes permitting more than
a so-called minimum standard were rarely attempted.? An
interesting recent development of the general interest in
cost of living and family budgets has been the growing use
of such data in connection with thrift plans, banking and
instalment purchasing. This use involves practical methods
of keeping accounts and budgeting expenditures so as to
apportion the income in a rational manner; no attempt is
made to estimate what the income should be.
The definition and measurement of living costs depend
entirely on the point of view from which the problem is ap-
1 See National Industrial Conference Board, Research Report No. 41, op. cit.,
Chapter VII,
2 In addition to the budgets for clerical and professional workers referred to in
the National Industrial Conference Board Research Report, No. 41, op. cit., p. 3,
the only significant recent budgets designed to cover the needs of a family in the
higher income groups are those prepared in 1921 by the California Civil Service
Commission, for a clerk’s family and for the family of an executive. California,
State Civil Service Commission, Cost of Living Survey, Report, Sacramento, 1923,
An interesting recent study not previously referred to is by Clarence Vernon Noble,
“The Cost of Living in a Small Factory Town.” Ithaca. N. Y.. September. 1924.