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The Myth of Black “Buying Power"

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    The immense “buying power” of African Americans, we are told again and again, makes us a huge economic power. So harnessing this power by changing the consuming habits of black America, the story goes, is an essential pre-requisite for black uplift. We've all heard it many times, from the screen, from the pulpit and elsewhere. But is any of it true? Does this popular understanding confuse black income, and even black debt with black wealth? Where does this misinformation come from? And does the emphasis on “buying power” as agency denigrate collective action in favor of “lifestyle” activism?  Dr. Ball opens the door to this vital discussion.

    The Myth of Black “Buying Power”

    by Dr. Jared A. Ball

    Achieving economic clarity is a bit more difficult than it would appear.  The myth of Black “buying power” resurfaced yet again in February as more “news” was released from African American/Black Market Profile (AABMP).  The myth, now updated,  projects that this “spending power” will reach $1 trillion by 2011.  This mythology of an African America whose national economic strength rivals that of most countries is consistently misunderstood, improperly quoted and ultimately used to deny the outrageous inequality and exploitation this country still requires to maintain itself as the single superpower/empire.

    First and foremost the initial report cited needs to be understood for what it is.

    The Market Profiles gather and synthesize the most recent findings from dozens of sources in order to help marketers communicate more effectively with these important consumer segments” (emphasis added). 

    So these numbers are floated not for their accuracy regarding Black people’s economic standing but for their ability to tell which corporations should more aggressively target their marketing (psychological warfare) towards African America to get what little money actually is held there.
    Part of their projections are based on the percentage (30.2) of African American households whose income is more than $50,000 per year.  Somehow this is meant to convey a sense of economic progress or sustainability.  Not considered in this report is that if the poverty line in the U.S. (a number already itself designed to hide poverty) is set so as to only count those in poverty who live in households of 4 earning less that $20,000 annually then, of course, a $50,000 would appear stronger than it actually is.

    The AABMP report, however, references for its numbers a study from the Selig Center for Economic Growth whose numbers also must be held in question.  Their justification for suggesting in 2006 that that year would be one in which African America, as the “nation’s largest minority market,” would use their “economic clout” to “energize the U.S. consumer market as never before.”  They cite as evidence such misleading statistics as:

    1. Black population growth

    2. Increased job opportunities

    3. More education for Black America

    4. Only 8.1% of Black America is over 65 years of age or at “career pinnacles” at which point wage increases “decelerate,” whereas, whites are 13.5% over 65.

    5. Black people spend more than “non-blacks” on natural gas, electricity, telephone services and footwear and a higher proportion of their money on groceries, housing and women’s and girl’s clothing.

    6. And this author’s personal favorite, that despite “a substantial gap in homeownership rates” this ’suggests a possible opportunity for market expansion in the years ahead.”

    We must be clear.  Income is not wealth.  “Buying power” as a phrase and one measured in these ways offers so many illusions that contradict the previous point.  Population growth and increased jobs (increased from what?) do not, in and of themselves, say anything about economic power.  More education means little as well when advanced degrees are considered an absolute necessity for economic advancement (certainly still no guarantee) and even their own report (p. 9) shows that in 2005 only 19% of African America earned a Bachelor’s degree or higher and the percentage of that population who earned a graduate professional degree was so low as to only warrant an “N/A.”

    It is also important to note that “buying power” is a confused phrase in that it, again, says nothing of a wealth Black people have little of but also suggests that this “power” is or can be for community uplift.  The fact, again, that this is target marketing material means that by “power” they mean the ability to generate money for corporations to whom this spending will be geared.  It does not mean that Black America has some un-tapped economic strength that can be marshaled to buy that which increases wealth (land, stocks, etc.) and speaks to the basics of colonial exploitation.  That is, that the colonized are left only to purchase trifling gadgets and trinkets “footwear” and “clothes,” as opposed to land, stock and other capital most of which is sequestered among the tiniest elite minority.

    And finally, it is sadly laughable that too many of us are fooled into thinking our power is squandered by poor purchasing habits, again, since this is all to which we have access anyway.  The idea that land and stock is there waiting but we’d rather go to the mall for trinkets results from mass capitalist, white supremacist propaganda which too many of us have imbibed.  So, in fact, the suggestion in 2006 that homeownership represents “a possible opportunity for market expansion” was a precursor to the damage and pain most are seeing only now; predatory lending, sub-prime scandals, mortgage and home foreclosure and the what United for a Fair Economy (UFE) recently reported as “the greatest loss of wealth for people of color in U.S. history… {upwards of} $200 billion.”

    Black people, like most others, are an exploited, colonized population whose wealth-generating capabilities are, just as these reports really say, for an elite who have nothing to do with Black people.  Black wealth resides in elite white enclaves here and abroad while African America devolves economically, politically and in terms of healthcare, education (quality of and access to), police brutality and mass incarceration.  And even within Black (and Latin) America 25% of the households have 90% of the wealth demonstrating a great divide within communities where Black median net worth is already a pathetic and dangerously low $5,988 and $7,932 for Latin America compared to $88, 651 for whites.  Black people have no money.  We spend on credit and loans (none of which is considered for either of these studies) so as to project a “power” that we in fact are far from having.  Rarely does anyone have in their pocket or account the $20,000 for a car or $30,000 (and way up) for one year of college.  We take loans for these and other purchases which then count towards our “spending power.”  The debt we fall into this way and others (i.e. credit cards) is counted as a “positive” by those to whom our pockets are perpetually emptied.  But this is not and can never be “power.”

    Anyone, including Black “leaders,” who parade fanciful numbers before their unsuspecting audiences so as to, again, suggest that irresponsibility is the cause of Black poverty need to be checked, vigorously.  We need to get back to an increased intelligent and honest discussion of economics so we can be where Ture was when he left, as he and his comrades always said when answering a phone and saying goodbye, “ready for the revolution.”

    Dr. Jared Ball is assistant professor of communication at Morgan State University, and one of the guiding minds behind voxunion.com, which we strongly advise our readers to visit.

     

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    Follow the Money

    The real problem is a lack of Empowered Black American manufacturers, producers and importers of vehicles, food, furniture, house hold appliances, and the other necessaries the Black American consumer spends billions of dollars on. The vast majority of products that we need are not manufactured, produced, imported or distributed by us! We simply consume and resell manufactured or imported products of others. The real money circulates among those who manufacture, and control the importation, distribution and marketing of the necessaries and the unnecessary bling-flash that sucks up our cash! We are consumers --- and it is well known our wealth is consumed by others! We are truly victims of democratic capitalism! Black America's money from the poorest to the richest has been co-opted - integrated into the proverbial melting pot. Integrated Money - just like integration has no benefit for our people!  Approximately 40 million plus Black Americans - whatever the average income be it 2  thousand or 200,000 thousand:

    Back Americans are not benefiting from their own wealth!

    WE ARE IN ECONOMIC CRISIS !!!!

    For Every Dollar ($1) we spend, less than five % (5¢) is recycled in the community for the benefit of the community.

    Our Immediate Goal must be Economic Empowerment. 76% of our wealth must be redirected and recycled to Empower and benefit our inner-city and rural communities.

    How do Black owned businesses empower themselves, eliminate ‘the middle man’ and benefit from at least fifty cents of each dollar spent? The strategic application and use of our PeaceZone Internet Technology is a key tool that can help empower what I call Black Empowerment Entrepreneurial Warriors. These are Entrepreneurs that are doing business and ready to invest funds and become Empowered Distributors of ‘major’ consumer and household products; entrepreneurs that are willing to re-invest profits to move on the path to becoming assembly plant owners and manufacturers; entrepreneurs who have a sincere desire and ability to strengthen and support our rural Black owned farm communities (yes there are still a lot of Black owned farms); entrepreneurs that will mentor and empower our youth with knowledge and the skills to become entrepreneurs that build industry; entrepreneurs that can create wealth, employ themselves and others so they do not have to stay on the 21st century plantation’.

    REDIRECT AND RECYCLE: EMPOWERMENT NETWORK ECONOMIC SPENDING MATRIX

    PERCENT STATUS

    76% to 100% equals Economic Freedom

    51% to 75% equals Economic Wealth

    26% to 50% equals Economic Stability

    0% to 25% equals Economic Crisis

    Black buying power

    Good article...but where are the solutions? we need practical solutions for our social struggles. I've often wondered how cats that sing the loudest about our social ills and talk of revolution do so from the comfort of the ivory tower and when push come to shove won't throw a brick. It seems as though dr. ball is the latest sanctioned authority to rise out of the ashes of burning intellectuals.

    Get em, Jared!

    This piece is absolutely on point. "Buying Black" is meaningless when one realizes the financial hurdles that a Black business person has to jump in order to make a substantial profit.  You are driving the nails in the wall with the commentary on true wealth and where is it being created and kept. As long as Black America is fixated on colorful pieces of paper via the incessant urban media we will never accomplish standing on our own collective feet with out the aid of economic crutches. Keep up the fierce work, sir.

    Economics that I can understand. Thanks.

    Yes. Orwellian America - on all fronts.

    Well said

    Thanks for shedding some light on how to interpret these numbers that are always bandied about.

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