The Historical Dictionary of American Slang has: "Orig. N.Y.C. a homeless woman who carries her belongings in bags, typically paper shopping bags. Now colloq."
(Oxford English Dictionary)
bag lady orig. U.S., a homeless woman, often elderly, who carries her possessions in shopping bags; = shopping-bag lady s.v. SHOPPING vbl. n. 2.
1972 S. R. CURTIN Nobody ever died of Old Age vi. 85 Letty the *Bag Lady..would pack all her valuables in two large shopping bags and carry them with her.
20 January 1973, Washington Post, pg. 32:
These old women are called bad ladies because they never leave their rooms for a minute without putting all their possessions in a couple of large paper shopping bags to carry along wherever they go.
(Review of Nobody Ever Dies of Old Age by Sharon R. Curtin - ed.)
16 December 1976, New York (NY) Times, pg. 44:
About New York
Sidewalk World if the Shopping-Bag Women
(Library catalog record)
Title: Shopping bag women of Manhattan /
Author(s): Hand, Jennifer.
Publication: [New York, N.Y. : s.n.],
Description: v, 173 leaves : ill. ; 28 cm.
Descriptor: Homeless women -- New York (State) -- New York.
Note(s): Typescript./ Includes bibliographical references (leaves 168-173)./ Dissertation: Thesis (Ph. D.)--New School for Social Research, 1982./ Reproduction: Photocopy./ Ann Arbor, Mich. :/ University Microfilms International,/ 1985./ 23 cm.
Responsibility: by Jennifer Hand.
Material Type: Thesis/dissertation (deg)
Document Type: Book