African-Americans Amass Greater Buying Power

AFFIRMATIVE action might have recently been pushed to the back of the public-policy bus, but not before giving some African-Americans the wherewithal to strengthen their future power as consumers.

The buying power of blacks - the amount of income available after taxes for purchase of goods and services - is rising faster than for the population as a whole. From 1990 to '96, it swelled by 40.5 percent, compared with the general population's 35.2 percent rate, finds a recent study by the University of Georgia at Athens.

Moreover, the black population's share of the nation's total buying power is expected to rise from 7.5 percent in 1990 to 7.8 percent next year, the study reports. (That percentage is still well below African-Americans' 12 percent share of the entire population.)

Blacks' increased leverage at the cash register stems partly from the rapid growth in their population. It is expected to expand 45 percent by 2025 compared with a 20 percent increase for the white population, according to the Census Bureau.

But the new financial clout is also attributable to a degree to higher incomes resulting from affirmative action and other programs aimed at giving blacks a fair place in schools and the workplace, demographers say.

Rising incomes

Indeed, the percentage of black households with incomes $50,000 or higher rose from 6 percent in 1967 to 15 percent in 1993 in constant dollars.

Some demographers say the growth in the percentage of affluent households stems from new opportunities in education and jobs.

The US Supreme Court, however, in a ruling last month, threw into question the constitutionality of federal programs that bestow benefits on the basis of race.

US businesses can tap into the rising wealth of African-American consumers by recognizing the population's complexity as well as its immensity. In the past several years, large numbers of blacks have moved into suburban areas, belying the crude stereotype of blacks as an urban population of modest means.

''Historically, all blacks have been seen as poor and powerless, and today businesses must recognize the diversity of the African-American community,'' says William O'Hare, a demographer at the Annie E. Casey Foundation in Baltimore.

''The time when we could use one message or one product for all black consumers has passed,'' says Jeffrey Humphreys, director of economic forecasting at the Selig Center for Economic Growth at the University of Georgia. ''Profit opportunities are missed if you don't tailor your message and even the product to a particular market.''

The greater financial clout of blacks in the marketplace could translate into greater power at the ballot box. ''If there is a direct relationship between incomes, political contributions, and political power, then the black community should benefit,'' says Mr. Humphreys, who conducted the study.

Falling incomes

But blacks' rising buying power should not be mistaken for greater per-capita prosperity.

Although millions of upwardly mobile African-Americans have become affluent in the past three decades, millions of others have seen their real incomes decline, keeping them in poverty.

Indeed, the African-American population has endured, in the extreme, the same middle-class erosion that is bedeviling the larger American society. Despite years of economic growth and greater opportunity springing from the civil rights movement of the 1960s, the median income of blacks in 1993 was only slightly higher than the 1967 figure in constant dollars, according to the Census Bureau.

Scholars differ over whether the chief cause of the rapid growth of black buying power is the increasing number of blacks, or affirmative action and other government efforts.

But there's a view that suits both theories.

As population growth has multiplied the number of dollars in African-Americans' hands, government programs have enabled many black individuals to rise to a level of affluence entailing sizable financial heft, says Mary Kent, editor at the Population Reference Bureau Inc., in Washington.

The weakening of affirmative action, while curtailing opportunities for minorities as a whole, will especially set back blacks in the lower income group because they most depend on public support for advancement, economists and demographers say.

You've read  of  free articles. Subscribe to continue.
QR Code to African-Americans Amass Greater Buying Power
Read this article in
QR Code to Subscription page
Start your subscription today