By Jamiel Robinson
Despite historically high unemployment rates, Black Americans have shown resilience in their ability to persevere as consumers.
In 2013, the National Newspaper Publishers Association (NNPA) collaborated with Nielsen to create a report and compile Nielsen’s third installment called, “The African American Consumer Report,” which showed the spending habits of the African American consumer. Most importantly, the report revealed and calculated the annual buying and spending power of African Americans in the United States.
According to the report, the African American population in the United States reached almost 43 million in 2012, representing approximately 13.7% of the U.S. population. Black buying power continues to increase, rising from its current $1 trillion level to $1.3 trillion by 2017, which keeps Black consumers at the forefront of social trends and media consumption.
Many retailers and Fortune 500 companies have developed African American advertising teams and have also dedicated significant amounts of resources towards tapping into the steadily increasing buying power of Black consumers. These major institutions and corporate juggernauts have the resources and totally understand the importance of advertising to Black consumers; however the majority of African American businesses, here in the United States, cannot boast the same successes and ability to effectively reach the African American consumer.
One of the biggest complaints that Black businesses have is that Black consumers don’t support them. One of the biggest responses that Black consumers give is that they would possibly support a Black business if they knew who they were and where to find them.
The average income for Black households nationwide is $47,290, with 35% of those Black households earning $50,000 or more. Sadly, according to an analysis of 2012 Census data provided by the Pew Research Center and cited by the Associated Press,the median wealth of White U.S. households in 2009 was 113,149, compared to $5,677 for Blacks. The wealth gap between White Americans and Black Americans is the widest that it has been in a quarter-century, with White households having over 20 times the net worth of Black households.
The dollar circulates almost ten (10) times within the Jewish community before it reaches the outside. The dollar circulates almost six (6) times within the Asian community before it reaches the outside. The dollar circulates an infinite number of times within the White community; more than all other groups. Sadly, the African American dollar does not even circulate one time within its own community. As a matter of fact, the Black dollar only stays in the Black community less than six (6) hours. This must change if we hope to address the issues of high unemployment, recidivism, crime and other critical issues impacting the African American community.
The Nielsen report found that if African Americans in the United States had their own country, their over $1 trillion in annual buying power would make them the 16th largest country in the world. The lack of Black consumer’s financial support of African American businesses should help everyone understand why the wealth disparity numbers exist within the Black community the way they do. Small businesses are the backbone of America. They create jobs and support communities. Black people must support Black businesses to ensure long-term sustainability.
As a Black consumer, the wealth gap should serve as a wake-up call, as well as an opportunity to use these statistics to better understand the power that they possess with their Black dollar. Black people play a powerful role in the overall economic infrastructure of the United States and each purchasing decision Black consumers have an impact on the bottom line of every company in the United States.
In order for any Black business to survive in today’s economy, they must have a consistent stream of income, as well as continued support from the greater community at-large and customers they serve, if they hope to be around more than a few years.
While Black consumers have the right to spend their money where they want and how they choose, making the decision not to support Black businesses contributes to the wealth and income gap of Black households. The same thing applies to Black businesses regarding B2B.
Having a collective voice and a systematic approach to bridging the gaps between consumers and the Black business community is the key.
Grand Rapids Area Black Businesses focuses on fostering a micro-economy that supports the revitalization of the Black community and expands opportunities for Black Businesses in the Greater Grand Rapids area by promoting and creating awareness for Black Businesses. Grand Rapids Area Black Businesses is creating meaningful and beneficial economic empowerment in the Black Community that leads to exceptional growth and sustainability.