Minorities Have Purchasing Clout


THE recent success of black political candidates in Virginia and the cities of New York, Seattle, Cleveland, and Durham, N.C. is once again focusing attention on the growing economic importance of minority businesses and communities. This month's political gains came in communities where African-Americans constitute a clear minority. In Virginia, for example, blacks make up 17 percent of the population; in New York City, 25 percent; in Seattle, 10 percent.

Yet add in Hispanic and other minorities, experts say, and the size of the overall ``minority community'' can suddenly swell - into the 40 percent range in New York's case. The victory of mayoral candidate David Dinkins in New York is seen as underscoring a potentially powerful new working coalition of blacks, Hispanics, and liberal whites.

Minority business leaders now say that, along with their growing political clout, so the growing attention from such prominent national ``mainstream'' advertisers as AT&T, Ford, General Motors, Proctor & Gamble, Coca-Cola, Burger King and McDonalds, reflects the rising economic clout of the black and Hispanic markets.

``In the last 10 years a growing number of Fortune 500 companies have been seriously targeting the Hispanic market,'' says Joe Lira, national administrator of the US Hispanic Chamber of Commerce, based in Kansas City, Mo.

Advertisers, says Mr. Lira, do well to take note. ``Our 9 percent to 10 percent of the US population represents about $179 billion in purchasing power,'' he says. And that power, says Lira, is based on the 23 million or so Hispanic-Americans who are documented - not the millions of Hispanics who may be here illegally.

African-Americans are also a growing and economically important demographic segment. Although blacks constitute only about 12.5 percent of the total population (some 30 million Americans), a significant part of the black middle-class has made ``phenomenal'' economic gains during the 1980s, says William O'Hare, director of policy studies for the non-profit Population Reference Bureau in Washington.

In a recent study written for American Demographics magazine, Mr. O'Hare notes that while many lower-income black families were severely pinched during the the 1980s, the number of black households with incomes of at least $50,000 more than doubled.

More than 1 million black households - one in 10 - now have incomes of $50,000 or more, usually involving the combined income of a husband and wife. Many of them own their own homes, are married, and well-educated - constituting a significant consumer-group by any measurement. Total aggregate income for blacks, O'Hare estimates, is about $225 billion.

To take just one category of discretionary spending, blacks now spend over $30 billion a year on tourism and travel, says Marvin Stallings, an official of the National Association of Black and Minority Chambers of Commerce, based in Oakland, Calif. His group, formed in 1978, now has 71 affiliate chambers around the US, evidence, Mr. Stallings maintains, of the rising economic importance of blacks.

Stallings, as well as Lira of the Hispanic Chamber, say that the main challenge faced by minority businesses is usually gaining access to financing. Still, there are now hundreds of thousands of minority-owned businesses, including more than 400,000 just for the Hispanic community, says Lira, up from 270,000 a decade ago. Although Hispanic firms tend to be fairly small in terms of payroll, they generate close to $23 billion in gross receipts, he says.

In some communities, advertising experts note, blacks and Hispanics now constitute the majority - or close to majority - of buyers of some staples. New York, for example, has over 2 million Hispanics - the second largest Hispanic market in the US next to Los Angeles. Moreover, as Lira notes, Hispanics ``are very close-knit and very family-oriented,'' which means a need for such products as diapers, toys, children's clothes, food products. Advertisements and billboards are increasingly targeted to Hispanics here.

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