Pension Trustees and the New Economic Order—Predicting the Future
Dr. Lowell Catlett
Futurist
New Mexico State University

Despite concerns about unemployment and a Dow Jones average that keeps dipping under 10,000, the United States remains a largely affluent country, according to Dr. Lowell Catlett. What’s important for pension fund managers to understand, however, is that demographic changes in the United States are profoundly changing lifestyles and spending habits. Those changes, in turn, will alter the fortunes of many business sectors, and should influence investment decisions.

Three major trends—the aging of America, new immigration patterns and a substantial increase in disposable income—have altered Americans’ spending habits. Choices are different today than they were a generation ago in the amount of money we spend on entertainment and the type of choices we make on items ranging from groceries to real estate. Catlett gave several examples of recent trends to illustrate his thesis:

• The number of 24-36-year-old white males is down 14% in the last decade—the same percentage drop in country music sales over the same time period. Singer Ricky Martin, however, who records CDs in English and Spanish, outsells the top two country western singers combined.
• From 1900 to 1965, 85% of all immigration came from Europe. Today most immigrants come from Asia and Latin America.
• Today there are more single-headed households than married households, a trend influencing where people buy real estate and the type of housing they rent and buy.
• A generation ago it took the average household 150 minutes to prepare dinner; now the average is only 15. The average American now eats 52% of meals out of home.
• Worldwide there are 123,000 centenarians. More than half live in the United States, and most are women.
• In 1981 the average college graduate could earn 35% more than someone with a high school diploma. Today the difference in earning potential is 100%; for those who complete graduate school, the difference is 120%.
• Two-thirds of households have pets, on which we spend millions of dollars on items ranging from treats to medical treatment. One in 20 greeting cards is for pets.

Uncertainty about the world and an overabundance of information also influence buying decisions. Today consumers often decide what and where to buy based on brand names, trademarks and reputations. Companies and products with established names will have a clear advantage in the marketplace.

Dr. Catlett is a professor at New Mexico State University. He received his doctorate in economics from Iowa State University. He is a consultant to many Fortune 500 companies as well as the US Departments of Agriculture, Interior, Defense and Labor.