The Hidden Promise of the 1970s

A5 the results of the 1970 census pour from the Government's computers, population analysts are finding an astonishing number of encouraging trends for the nation's economy. Almost everybody stands to become more prosperous in the next few years and beyond. Census Bureau officials calculate that the median income of the U.S. family, measured in dollars of constant buying power, will rise from $8,600 in 1969 to $10,900 by the beginning of 1975. Then the figure will continue upward, to $14,700 by 1985. Says the bureau's director, George Hay Brown: "We are heading into a society with an affluent majority."

Brown's forecast assumes, as most economists do, that incomes and productivity will increase in the 1970s at the same rate that they did in the past decade. By 1985, some 16% of U.S. families are expected to be earning $25,000 or more a year, five times the current percentage. Since 1959, the number of persons below the official poverty level has fallen from 39.5 million to 25.4 million, a drop from 22% to only 12% of the population; the rate of decline has been accelerating in re cent years. Popular myth to the contrary, says Herman Miller, chief of the Census Bureau's population division, "the rich are not getting richer and the poor poorer. The money is being spread around more and more."

Leisure and Luxuries. Though the markets of the future are highly unpredictable because of social and political uncertainties, several trends seem likely to occur. Consumers--and voters --will have an unprecedented amount of choice about how to spend their new wealth. A substantial part will probably be siphoned away by higher taxes, but those taxes could help to pay for cleaner air and water, improved medical care, better teachers, more reliable public transportation and new day-care centers for working mothers. Even so, the demand for luxury goods and services will probably soar. Millions of families will buy or rent more lavish homes and apartments, and load them with the latest gadgets. Marketing analysts anticipate a big increase in sales of swimming pools and second homes. Spending for leisure and travel will rise anew, in part because of the increase in three-day weekends that begins this year with the switch of four federal holidays to Mondays. Outdoor recreation will be increasingly popular, lifting sales of boats, ski equipment, picnic and camping gear. If the four-day work week wins a foothold, it can only reinforce all these prospects.

There was a substantial increase in the number of working wives during the 1960s. Census Bureau experts expect the trend to continue and boost family income. A surprising number of women from affluent families go to work, more out of desire than need. Among wives whose husbands earn less than $5,000 a year, 45% have jobs; but so do 35% of the wives whose husbands are paid $15,000 or more, and 26% of wives whose husbands get $25,000 or more.

Accent on Newlyweds. Above all else, business opportunities in the 1970s will be affected by startling changes in the age mix of the U.S. population. Because of the low birth rate, population rose only 1.1% last year, to 206 million. Census experts envisage an increase of only 1.3% a year until 1975 and 1.4%-a-year growth until 1980 (to about 230 million). Fully one-third of that increase will come among 25-to 34-year-olds; they were born during the postwar "baby boom," and are now becoming newlyweds themselves.

The 1970s will become the era of the young marrieds. They will provide a huge market for minimal-cost housing: mobile homes, or tiny town houses and apartments in the far-out suburbs. Builders estimate that construction of such units may have to double from present levels. "Young marrieds are avid consumers," notes Adman Victor Bloede, president of Manhattan's Benton & Bowles. "They buy everything." They also borrow heavily. In, particular, they will want appliances and furniture, pots and dishes, infants' wear and home entertainment items as diverse as Tia Maria and tape recorders.

By contrast, there will be little increase in the 45-to-64 age group. Seasoned executives may be in such short supply that many will postpone retirement. The number of U.S. teen-agers will hardly rise at all by 1980, a fact that may reshape the market for companies that cashed in on rock records and teen clothing during the 1960s. The sub-teen population (ages five through twelve) will actually shrink, cutting into the demand for breakfast cereals, some soft drinks, toys and bicycles. Says Argus Research Corp. Economist Sam Nakagama: "American families can now spend money on themselves instead of their kids, getting rid of a great burden on family budgets." A burden will be lifted from state and local taxpayers too. Elementary school population is expected to decline until 1975 and remain below its present level even in 1980. Except in fast-growth areas, there will be little need to build more schools in the next ten years.

Business will be profoundly affected by geographic shifts in population. Two out of three Americans live in metropolitan areas (v. 42% in 1900), but the growth rate of the biggest urban areas is dwindling. Because suburbs have become more populous than central cities, there will be more construction of shopping centers--and more trouble for downtown department stores. The move away from big-city centers will also lead to less crowding of urban land. By the year 2000, census officials expect the population density of sprawling metropolitan areas to drop to about half of what it was in 1920.

Americans are increasingly choosing to dwell where the sun often shines, or near water. Half the U.S. now lives within 50 miles of a seacoast or the Great Lakes. The fast gainers in the 1960s were middle-sized metropolitan areas (pop. 700,000 to 2,000,000) in California, Arizona and Texas. Among them: Anaheim-Santa Ana, up 100.2%; San Jose, up 65%; Phoenix, up 45%; San Bernardino-Riverside, up 39%; and Houston, up 38%.

The nation's expanding wealth and its enormous range of economic choices give Census Director Brown reason for optimism. "George Orwell was wrong," he says. "Everything I see indicates that we are going into 1985 in a country that is basically people-oriented, with strong individualism, a free market and a democratic society beset by many problems, but working them out in terms of human liberty and dignity."

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