These are collected attempts to disrupt the wide-spread mythology of Black (and by extension all others) “buying power.” Beginning with the posts below (working bottom up) i’ve over time looked to track some of the relevant information as it comes out and to at times intervene in some of the national dialogue on the subject.  Media coverage of this issue, as is often the case, does little to improve our general understanding of capitalism, wealth accumulation and disparity or the ongoing forms of poverty faced by so many – who often themselves become the target of blame associated with that poverty.  i welcome others’ input and encourage much more discussion of this myth especially when so many left-leaning spokespeople routinely incorporate this very conservative (reactionary) myth into their own analyses and too end up chastising the poor for being so.


Update June 22, 2015 – The Blackness Card: The Cost of Being Black with Algernon Austin

In this interview Austin satirically breaks down the actual costs of being Black further challenging notions of economic parity, never mind actual “power.”


Update February 11, 2015 – Nielsen Ratings Continue to Distort Meaning of “Buying Power”

Black History Month is the perfect time for more anti-history and “analysis.”  HERE is the latest contribution to the myth of “buying power” from none other than the Nielsen ratings company in which Black “millennials” can be seen discussing their spending habits.  Again, this suggests that persistent reports of Black economic instability are the result of poor “financial literacy” among Black people.  If not that it suggests there is genuine “power” among Black consumers.  But as we continue to note here (and below) “power” is not derived from consumption.  Instead, “power” as was once famously said, is derived from controlling the “means of production.”  Videos like these pervert economic reality and the very structural, predetermined nature of poverty.  Besides, remember how Nielsen has long be caught up in fictions about ratings (or the lack thereof) in Black communities which are connected – not to genuine power – but to advertising dollars being spent on Black commercial media outlets.


Update February 1, 2015 – New State of the Dream Report shows a decrease in Black wealth/worth

This year’s State of the Dream Report 2015 from the UFE (United for a Fair Economy) shows that since its initial report in 2004 there appears to have been a decrease in Black-to-White relative family median wealth/worth.  Currently they write that, “In 2013, White households had $141,900 median wealth, while African-American families had just $11,000 median wealth and Latino households had $13,700 median wealth. (p. 6).”  This equates to Black America having roughly 7% or less than half the median wealth relative to Whites held in the initial UFE report from 2004.  In that report they wrote, “In 2001, the typical Black household had a net worth of just $19,000 (including home equity), compared with $121,000 for whites. Blacks had 16% of the median wealth of whites, up from 5% in 1989. At this rate it will take until 2099 to reach parity in median wealth.”  This, and their further coverage in this report of African America being “Underbanked and Overcharged,” further exposes the mythology of “buying power” and it being a marker of actual economic strength.


Update January 19, 2015 – Oxfam explodes notion of economic strength

Remember, going back several years (see below), the argument has been that Black “buying power” will reach $1.1 trillion by this year (2015).  Never mind the many flaws in this claim (again, see below), what could this possible mean when as, Oxfam’s latest argues, that by 2016 1% of the world will own more than the rest of the 99% of the planet? We don’t need their analysis of this reality, their facts will suffice, they do after all still need to include comments from the “chairman of the Coalition for Inclusive Capitalism” who suggests it is big business that must somehow do more to stem the tide of worsening global inequality.  However, the fact of this kind of inequality speaks also in the microcosm to all misleading press reports that promote Black (or anyone else’s) “buying power” as compared with other countries.  It is only a “power”to buy what this 1%  determine is for sale.


Update September 19, 2014 – Africans Arise internationalize the myth(s) of “buying power”

I am honored to have been referenced by these brothers from Africans Arise who do an excellent job of critiquing this notion of “Black buying power.”  Their approach is far more comprehensive and global and is very well explained.


Update September 12, 2014 – Our conversation with Economists Jeanette Huezo and Dean Baker

We dealt with this issue a bit in our conversation with economists Dean Baker of the Center for Economic Policy and Research and Jeanette Huezo of United for a Fair Economy, “what does this mean for Black people, Brown people and working people?”


Update September 2, 2014 – More press missteps

Yet another journalist asked for my input on this issue, this time to respond to another popular media reference to this myth of “buying power.”  But again the story falls short.  HERE is the piece and this is what i sent to its author:

Derek,

Too bad none of my comments made it into your piece on Elder and buying power. Clementi makes good points but still misses the key point that “buying power” is a marketing phrase meant to drive corporate advertising investments and not at all about the economic strength of a community. the median household wealth of a Black family is still below $6,000. That means even your GDP math concluding in “a per capita buying power of around $23,000” also grossly re-affirms the myth of what “buying power” as a phrase does and doesn’t mean. All you end up doing is moving Black America down this already false scale of economic strength from 16 to 44. That doesn’t help address the fact that poverty and income/wealth inequality are real and worsening problems that have nothing to do with how people spend money. Finally, you list me as a source but include none of my thoughts, statements, research or general argument. It almost reads as if i co-sign your work when i absolutely do not. The falseness in the claim of Black buying power is not in the overall ranking, it is in the terribly flawed approach, totally false claim and distortion of how economics work or the means by which people are held in poverty.

jab


 Update: May 2, 2014 – PEW Research Center shows us more about myths of spending as = power

The following chart from the PEW Research Center supports my argument (below) about poor people buying what is available and are not, as the myth argues, foolishly choosing to waste money while missing out on opportunities to improve themselves.  This PEW chart shows how colonial “trinkets” (as Fanon described them) are far more affordable than what is needed for the material improvements.

poorcosts


Update: February 14, 2014 – National press continues to misunderstand/confuse “buying power”

Today’s “What buying power buys African-Americans,” from Marketplace also included me. However, there just is not enough time given here to address the concerns raised or to more appropriately respond to claims/points made.  In this case, i had not heard the particular argument of the other interviewee until the piece aired, but it does speak to existing and severe differences in concepts of “power,” economics and the history of Black political struggle in the U.S. For instance, and as was done in this piece, to refer to a Black presence in commercials as any kind of “power” while then also referring to this and mythological reports of “buying power” as an extension of the civil rights movement’s bus boycotts really does distort that history.  Collective economics and non-violent direct action were, if nothing else, attempts to address community needs and institutional inequality.  To equate those movements with corporate ploys to attract consumers grossly distorts their intent, as well as, diminishes further critiques of those efforts’ ability to truly upset entrenched wealth and power.  Dr. King, for one example among many others, was clear in his own lifetime that these boycotts, efforts at desegregation and the passage of legislation were all insufficient and incapable even of ridding the country of its structural racism and economic (capitalist) violence against working people and Black people in particular. Secondly, though incomplete in its arbitrarily narrow time frame, the Montgomery bus boycotts are often understood to be the beginnings of a movement, not the culminating success story this piece suggests. But, if the frame is to be that Black people today have an economic strength (that again simply does not exist) then it makes sense that to defend that position the earliest stages of the civil rights struggle would be selected as the historic example that proves this myth. This way the succeeding years of increasingly radical, globally focused, anti-imperialist, anti-capitalist and Black Power elements can all be fast-forwarded to a wonderfully powerful 2014. King’s own critique of the stagnation of a movement he is often the symbolic head of is ignored as is that of lesser known figures whose criticisms are equally omitted and valid today. Perhaps more than anything this piece is a lesson in the limits of mainstream journalism and even the well-intentioned journalists who work in that environment.

http://www.marketplace.org/node/130181/player/storyplayer


Update: February 7, 2014 – More national press coverage and errors of “buying power”

“Black buying power hits $1.1 trillion. What does it mean?” Marketplace included me in this piece on “buying power.”

http://www.marketplace.org/node/129791/player/storyplayer


Update: September 23, 2013 – Our conversation with Ward Churchill about Native American “buying power” and other Indigenous mythologies

Our interview with Ward Churchill about Native American “buying power” and other national myths…


Update: September 20, 2013 – More press abuse of concept of “buying power”

The myth does indeed endure.  A few weeks ago I was contacted about being quoted in a forthcoming article on “Black Buying Power.”  I was initially hopeful but upon reading the piece had to unfortunately send the following to its author:

“Greetings,

I’ve just now seen the piece you wrote on Black buying power. I have to say that when you reached out to me I became a bit hopeful that you were going to add some depth to the discussion but it seems that you’ve actually avoided the issue of what “buying power” means (functionally speaking) and how these huge spending numbers are “calculated.” You do reference me but actually horribly misquote me by putting words I quoted from someone else in my mouth and truncating the statement leaving it to be out of context and absent its actual point.

Here is what I wrote, “What is there to say when gaps between demonstrable reality and people’s perceptions are as wide as the ever-widening gaps in wealth? 2010 begins with another promotional round of the popular mythology of Black “buying power.” But this economic Easter Bunny/Tooth Fairy comes at great material consequence. This “great disconnect between our people’s wishful mis-perceptions… and the objective reality that actually shapes our lives,” as Glen Ford has said recently, is in part due to misinformation and the conclusions reached by so many prominent thinkers in our world. Precisely at a time when Black unemployment is worsening and predicted to reach even further epidemic levels we also hear of research which suggests that Black Americans think their lot is actually improving.”

Here is how you quote me, ““The objective reality that actually shapes our lives is in part due to misinformation and the conclusions reached by so many prominent thinkers in our world. Precisely at a time when black unemployment is worsening and predicted to reach even further epidemic levels, we also hear of research which suggests that black Americans think their lot is actually improving,” he said.”

The first line in yours doesn’t even make sense because you left out the preceding – and really important – sentence and then I am quoted as saying what I quoted Glen Ford as saying.

But really my only issue is that you didnt leave room for any of the studied critique of how they reach these really misleading numbers which makes my quote about a system seem like just talking. You dont link to my piece or reference any of the real research I put in to debunk the numbers these “studies” keep claiming. This leads to more confusion about how poverty works and you end up supporting the myth that we just spend ourselves out of opportunities (even as you quote accurately studies that demonstrate how Black homes are purposely devalued which exposes the lie that poverty is anything but the result of intentional discriminatory practices against Black (and poor) people).

Deadlines, editors, etc. I get it but I do admit to having had higher hopes.

Take care,

jared”

This latest “study comes from the same Selig Center mentioned below and also appears as the primary reference for reports like this one which itself becomes the primary reference for articles like the one mentioned above.  Its summary includes the following:

“Minority groups in the U.S. will command unprecedented economic clout this year and well into the future, according to the annual Multicultural Economy report from the Selig Center for Economic Growth at the Terry College of Business.  The 2013 report provides a comprehensive statistical overview of the buying power (or the amount of income left after taxes, not including savings or borrowed money) of African Americans, Asians, Native Americans and Hispanics from 1990-2018. It includes national statistics as well as breakdowns for each state…  In addition, African American consumers will add $1 trillion to the 2013 market, Native Americans will contribute $96 billion, and Asian consumers will supply $713 billion.  As minority groups’ buying power continues to outpace the growth of the white market, these groups should see more tailored treatment from advertisers, producers and media outlets, said Jeff Humphreys, author of the report and director of the Selig Center” (emphasis added).”

In addition to the points made below I would only want to add here that:

A) The study itself is not easily obtained as it costs $125 which is prohibitive for most of us.  So while I endeavor below to explain how these claims of “buying power” are calculated the precise methods and details are not accessible (to me).

B) The point, as I do say below, is not how to help “minorities” to invest all of this “power” so as to increase their actual wealth – because this is not an option, there are no stocks and properties, etc. available waiting for purchase from otherwise foolish spenders.  The point is to, as the above quote makes clear, help corporations target these communities for worthless spending, to turn “minority buying power” into corporate profit.  It makes no sense to refer to these “studies” in order to demonstrate the poor spending habits of poor people.  This report that refers to the Selig one (as is always the case) is not a guide for increasing Black wealth.  It is a falsely-balanced guide for corporations to know how to target Black people and a guide to Black people on how to be better consumers.  In other words, it is a guide for turning Black income in to White corporate wealth. So, again, it makes no sense at all to reference these studies as part of a critique of Black people’s complicity in their own poverty.  Black people are not poor because they are poor consumers.  Poor people are poor so that there can be rich people.  Poor people, as this report shows, are targeted to spend their income which becomes the unearned income (or wealth) of the rich who own the companies and products being bought.  This is how the wealthy stay wealthy, by assuring that the poor stay poor.


 Update: February 5, 2010 – Black television and pundit luminaries continue to misunderstand and report “buying power”

A new BET “study” which is based on a “comprehensive” survey of “80,000 African American consumers” concludes that because of an increased Black population, one which spends more on technology and is predicted to have a “buying power that will reach $1.2 trillion by 2013, that there is an economic strength among Black people that simply does not exist.  Again, “buying power” is a marketing phrase meant to define the ability of a demographic to spend its money with this or that corporation.  It is not an indicator of income, wealth or access to assets (such as land, stock, rental property, etc.) all of which are real indicators of economic power and all of which point (as described below) to an absolute lack of power in Black America.  From these misleading numbers and conclusions we get equally misleading analysis that suggests – and by design reaffirms the lie – that, as the esteemed Black spokesperson Dr. Boyce Watkins said in response to this latest “study,” “Unfortunately, when African-Americans make money, we spend it. We don’t use it to invest or produce… When we get our tax refund, we go straight to the store.”  This is an absurd explanation of poverty.

This “great disconnect between our people’s wishful mis-perceptions… and the objective reality that actually shapes our lives,” as Glen Ford has said recently, is in part due to misinformation and the conclusions reached by so many prominent thinkers in our world.  Precisely at a time when Black unemployment is worsening and predicted to reach even further epidemic levels we also hear of research which suggest that Black Americans think their lot is actually improving.

As we have been arguing here there is no collective $1.2 trillion that wealthy investors choose to spend frivolously.  These numbers are aggregates of money spent by millions of hard working, mostly poor people spending in relatively small amounts on items which are available to them.  There are no offers of stock, nor is there land and property all awaiting sale but being ignorantly passed up by foolish savages who are incapable (apparently) of making intelligent use of their billions.    Poverty is not the result of spending habits.  Poverty is a well-structured planned outcome of an economic system which demands that it exist.

It remains essential to focus on material reality as opposed to propagated myths packaged in ease-inspiring slogans or phrases.  For instance, a recent statement on “intergenerational poverty” demonstrates the point.  They write that, “The wealth gap is the most acute indicator of racial inequality. Based on data from the 2002 Survey of Income and Program Participation, white median household net worth is about $90,000; in contrast it is only about $8,000 for the median Latino household and a mere $6,000 for the median black household. The median Latino or black household would have to save nearly 100 percent of its income for at least three consecutive years to close the gap. Furthermore, 85 percent of black and Latino households have a net worth below the median white household. Regardless of age, household structure, education, occupation, or income, black households typically have less than a quarter of the wealth of otherwise comparable white households.”  Or in another installment in an annual series on these issues we learn, among many other startling facts, that Black Americans “earn 62 cents for every dollar of white income, and Latinos earn 68 cents for every dollar of white income.”


Update: December 22, 2009 – Addendum to original commentary on the myth of Black “buying power”

I had initially put this together as an email response to some friends but have since found it to be a bit more useful and, therefore, wanted to give it an actual post.  It has drawn some criticism, some of which is valid and deserving of response.  My primary point is to challenge what remains an absolutely false notion that somehow this concept of “buying power” speaks to genuine economic strength among Black Americans (or most others).  “Buying power” is a marketing phrase designed to assist businesses, almost all white and with no concern for the lived experiences of Black people, in targeting populations based on patterns of spending.  “Buying power” should not be confused with wealth nor should it be confused with equally false notions of “progress.”  In this case “power” means an ability to enrich others’ businesses.  “Power” in this case has absolutely nothing to do with traditional struggles over control over one’s (or a community’s) land, labor, politics or culture.  This “power” means only the ability to positively impact the bottom line of a corporation.  The problem, my primary point of concern, is when this point is lost and people tout these numbers as an opportunity for liberation lost on the mindless activity of a free but irresponsible or stupid population.

One possible flaw in my argument below is that I equate credit or loans (in the example of an automobile purchase) with the marketer’s claims of “buying power.”  In fact, as the Selig Center states accurately in their own definitions and reports, “buying power” refers only to “disposable income,” or “the total personal income available for spending on goods and services after taxes.”  Further, “Simply defined, buying power is the total personal income of residents that is available, after taxes, for spending on virtually everything that they buy, but it does not include dollars that are borrowed or that were saved in previous years. It is not a measure of wealth, and it does not include what tourists spend during their visits.”  This, however, remains unclear.  Their definition of “buying power” as not including “dollars borrowed” in “previous years” seems not to discount money borrowed in that same year.  If so, my point below would indeed be sound as credit card debt or car loans from that same year would be counted as “buying power.”

However, again, the intent is to assist businesses not to alleviate planned or necessary poverty.  These arguments of “buying power” are also to assist in myths of poverty being the result of pathological habits among Black and other populations whose innate flaws are beyond even the ability of the most magnanimous of civilizations.  Then the numbers associated with this “buying power” can falsely suggest that were only these savages more responsible with their money poverty and economic inequality would simply disappear.  My own error was in not making more clear that one problem I have with these calculations is their definition or explanation of  “disposable income.”  If, as stated below, the average Black household has a median net worth of less than $6,000 and there has been a 30+ year decline in workers’ real wages overall the response to which was increased credit to maintain absurd spending levels then where is the “power?”  If most income is spent on the basic necessities of survival (food, clothing, shelter) then how is it “disposable?”  How can something be called “disposable” or meant to convey “power” when, as the Selig report says, the top 5 expenditures for Black people include “phone services, utilities and groceries?”  Are these truly to be considered gratuitous purchases along with the other clothing and footwear?  Even if we assume that most of the clothing and shoes purchases are beyond absolute necessity are we still to assume that Black people are poor because they spend too much on phone, electricity and food?  Perhaps more importantly, should buying food and phone use be allowed in any society to result in the kinds of poverty faced in the U.S. by Black people (or anyone else)?

It is for this reason that I attempt below to place Black America within a global context of colonialism.  This is the basis of my argument that Black people (indeed almost everyone) are not capable of purchasing assets (stocks, land, property, etc.) because so much of their “disposable” income is used for basic needs leaving only access to more frivolous items.  Colonized populations have no access to the most wealth-producing elements of a society and are forced/manipulated/relegated to basic necessities or the fruitless results of conspicuous consumption.  This is the point of a capitalist economy.  The goal in such an arrangement is to have that which does increase wealth (and then, of course, societal control, political power, etc.) to be in the hands of a few.  No system or society is designed to allow any and everyone an equal opportunity to rule it.  This was precisely his point when Malcolm X made clear that “It’s impossible for a chicken to produce a duck egg… a chicken just doesn’t have within its ystem to produce a duck egg.  It can’t do it.  It can only produce according to what that particular system was constructed to produce.  The system in this country cannot produce freedom for an Afro-American.  It is impossible for this system, this economic system, this political system, this social system, this system, period…  And if ever a chicken did produce a duck egg, I’m certain you would say it was certainly a revolutionary chicken!”


 Original Post March 12, 2008The Myth of Black “Buying Power”

Myths of Black America’s “buying power” continue to confuse just how bad things really are or how this “permanent recession” is an economic and social necessity.  This myth is meant to shift the blame of poverty onto the poor and suggests that economic inequality is more an issue of pathological behavior than a scientific inevitability.  In a speech delivered on Black Power (see below) Kwame Ture accurately cut through the morass of madness known as “economics.”  He stated simply and clearly, “a man is poor because he does not have money.  Period. If you want to get rid of poverty you give people money.  Period.”

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 and its purpose which, as is as they say atop their report, “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 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.”