Myth Basics:

  1. “Buying Power” is a marketing phrase that refers only to the “power” of consumers to purchase what are strictly available goods and as their own report admits has nothing to do with income or wealth which are the genuine markers of economic condition.  “Power” here has nothing to do with actual economic strength.  Nearly all reports/stories related to these numbers refer back to flawed, misleading and misinterpreted research from the Selig Center for Economic Growth at the Terry College of Business housed in the Bank of America Financial Center in Athens, GA.
  2. The claim that African America has roughly $1 trillion in “buying power” is an entirely phony myth, like unicorns, democracy or freedom.  As explained in detail below, the number is fraudulent, itself derived from equally fraudulent surveys, absurdly interpreted sociological data and – at best – misinterpreted data regarding spending which mostly just ignores the far more sound data regarding wealth and income.
  3. The myth of “buying power” works to deny the reality of structural, intentional and necessary economic inequality required to maintain society as it is, one that benefits an increasingly decreasing number of people.  To do this the myth functions to falsely blame the poor for being poor.  Poverty, the myth encourages, is the result of the poor having little to no “financial literacy,” or as resulting from their bad spending habits, when in reality poverty is an intended result of an economic and social system.

Introduction

These are compiled attempts to disrupt the wide-spread mythology of Black (and by extension all others) “buying power.” Beginning here – and working upwards –  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: February 10, 2017  – Another Black-owned Bank is Gone

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Offshoots of the pernicious myth of “buying power” often include equally limited, even if well-meaning, efforts akin to those like “#BankBlack” and “#ShopBlack”.  It isn’t so much that the desire of real change which drives these attempts is flawed as it is the idea that these are methods of overturning economic inequality or systemic and intentional abuses of capitalism.  If the (false) assumption is that Black people are poor because they don’t pool or use or invest or save their money properly then it follows that shopping or banking campaigns will be an advance.  But as was reported today  Seaway bank of Chicago closed/was purchased due to “operations of an unsafe and unsound nature that resulted in inadequate capital to protect its depositors…” In other words, as we continue to demonstrate here, Black people simply do not have the kinds of money required to drive the kind of independence assumed accompanies Black ownership of banks, businesses, etc.  Poverty is not the result of poor saving or investing.  Poverty results from not having or having access to money and/or capital which, by definition, only a few do.  The 1% exist because there is a 99%.

As the story continues, “Prior to its acquisition by the State Bank of Texas, Seaway Bank had approximately $361.2 million in total assets and $307.1 million in total deposits, the FDIC’s press release stated. But the institution’s heavy involvement in the #BankBlack movement last year still wasn’t enough to secure much-needed depositors from the African-American community“(emphasis added).   Prior to this bank closure it was reported last year during the #BankBlack effort that “The U.S. had 23 black-owned banks, credit unions or savings and loan associations as of March 31, according to the Federal Reserve. The nation’s 156 minority-owned banks collectively hold $131 billion in assets.” That number is now down to 22 banks with now roughly $360 million fewer total “minority-owned” banking assets.

Were we to follow the (ill)logic often associated with the myth of “buying power” which is used to suggest that Black America would, as its own nation, rank among the top 20-30 wealthiest in the world, and we took all those “minority-owned” banks and similarly created a mythological single bank, under the control of those communities, with an actual desire to improve those communities (as opposed to a more “colorful” exploiting set of bankers and executives) we still find a stark reality that at a collective $131 billion it would still only rank 15th among U.S. banks alone and would be considerably behind the leaders JP Morgan Chase, Wells Fargo and Bank of America each of which are in the trillions.

Now, consider what it would mean then for 156 separate banking entities to first combine their wealth and then actively work to redistribute it to truly benefit the roughly 100 million people or so comprising its constituent communities.  Were even this amazing feat to occur it would still demonstrate the initial and permanent rigging of an economic system which depends upon inequality to produce the desired result of a 1%.  But this is more or less what purveyors of the myth of “buying power” argue, that the solution to economic woes facing Black people can be solved somehow by 40 million of them magically working in unison to pool money they use to consume products, goods and services they do not own or control.  And even then, that non-existent and fully fraudulent number (see below) of $1 trillion in Black “buying power”– a “power” based in the ability to consume what others produce and own – which is used to suggest there is an actual power, can actually be seen for the power it genuinely produces for others.  For, that mythological $1 trillion in “buying power” would not even itself match the actual, in-hand, usable assets of any one of those top 3 U.S. banks.

We are given the illusion of power so as to be kept from realizing the motivation of those creating it which is to have us believe that our ability to consume their products and ideas gives us power when our only real power is the potential to unify, work collectively, organize and struggle.  It is indeed as Bruce Lee said, “The enemy has only images and illusions behind which he hides his true motives. Destroy the image, and you will break the enemy.”


Update: January 2017 – “Mourning In America” – State of the Dream 2017

SOD_2017_promo-01.png

The latest State of the Dream report from United for a Fair Economy continues to dispel myths of “buying power” and economic strength in the U.S.  First, note as they say that, “80% of private wealth was inherited” (emphasis added – and as opposed to earned on some equally mythical level playing field filled with opportunity) and further that:

The overall wealth gap in the United States has widened significantly in the past 30 years, with the richest 1% now owning 41.8% of the wealth while the poorest hold only 22.8%. There is even further division when race is taken into account. For every dollar owned by the average White family in the US, the average family of color has less than a dime. In 2013, White households had $141,900 median wealth, while Black families had just $11,000 median wealth and Latino households had $13,700 median wealth.


Update: November 27, 2016 – Black-White Earnings Gap Returns to 1950 Levels

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Art: Dan Wasserman / Boston Globe

It, once again, remains absurd to speak of a mythological economic “power” and to further confuse wealth with income and with consumption when even income – never a sign of wealth or power – has gaps with white workers returning to 1950s levels.  Yet another new report on persistent economic inequality does note at least two other relevant points: 1) White working men have seen their own unemployment rates double since 1960 (almost the same for Black men):

“In fact, more and more working-age men in the United States aren’t working at all. The number of nonworking white men grew from about 8 percent in 1960 to 17 percent in 2014. The numbers look still worse among black men: In 1960, 19 percent of black men were not working; in 2014, that number had grown to 35 percent of black men. That includes men who are incarcerated as well those who can’t find jobs.”

And: 2) there is a class element even within Black suffering:

“The earnings gap between black men with a college education and those with less education is at an all-time high, the authors say.”


Update: November 2, 2016 – Net worth of white households in D.C. region is 81 times that of black households

It feels almost as if this is a perfect metaphor for the soon-over Obama presidency.  What was thought by many in 2008 to be “change we can believe in” has been anything but and this story feels as if the effect of the centrifugal force of a Black man in the White House where nationally (it may appear to work in reverse viewed from outside the country in) the financial impact on Black people extends from the nation’s capital, where there was the “initial impact” or “ground zero.”


Update: September 5, 2016 – Labor Day Special and the Decline in Overall “Consumption Buying Power”

In this very important Labor Day special from CounterSpin and FAIR.org one can hear Holly Sklar of the national network called Business for a Fair Minimum Wage discuss an overall problem facing corporate America; that of declining real wages and/or the ability of working people to afford the products they produce.  Described a bit more accurately as “consumption buying power” the reality is that even the ability of working people to buy goods is decreasing due to their being paid record low wages for their labor and, of course, meaning they have less to turn around and spend on goods sold and owned by those corporations working their hardest to keep wages low.  If there is any benefit to this madness it could only be its value in further crippling myths of capitalism and the American economy and, particular to our concern here, the myth that somehow Black working people have some tremendous economic strength.  No.  The “power” to consume is not economic or political power in any real or meaningful sense.  But even that powerlessness, the “power” of consumption, is dwindling.  The segment mentioned here with Sklar starts at about the 16th minute, but the entire segment is essential listening.


Update: August 10, 2016 –  The Average Black Family Would Need 228 Years to Build the Wealth of a White Family Today

As another new study puts it, between 1983 and 2013, “the wealthiest Americans—members of the Forbes 400 list—saw their net worths increase by 736 percent during that period, on average.  If those trends persist for another 30 years, the average white family’s net worth will grow by $18,000 per year, but black and Hispanic households would only see theirs grow by $750 and $2,250 per year, respectively…  ‘[Economist] Thomas Picketty said that, left uninterrupted, we would move toward a hereditary aristocracy of wealth,’ says Chuck Collins, one of the study’s authors. ‘What he didn’t say is that in the United States, that would be almost entirely a white aristocracy of wealth.'”


Update: August 7, 2016 – Black August, The Elections and What HAS to be a Myth of Buying Power

It’s Black August and the presidential election season!  And right on time to remind us of the incredible inequality that exists and its impact on what is only nominally a “democracy.” Or, better put in question form by George Jackson, “what good is the vote after the fact of monopoly capital?”  In just this brief clip from a recent article on the wealthiest U.S. citizens and how the ridiculous $2 billion projected to be spent on the presidential election would be nothing to the richest 100, we see once again how absurd it is to compare the “power” to consume trinkets with the power to own, rule and both decide who runs for office and actually benefit from one or another election victory:

In the 2012 election cycle, the top 100 Super PAC donors accounted for 3.7 percent of the donor population but gave 80 percent percent of the money, a structure that roughly mirrors the makeup of U.S. society as a whole, where one percent of the population holds half of the total wealth. The ratio will likely tilt even further toward the Club of 106 during the 2016 cycle, thanks to two recent court decisions — McCutcheon and Citizens United — that loosened limits on individual donors and opened the door for Super PACs to raise and spend unlimited amounts of money (emphasis added).


Update: August 4, 2016 – Struggling a bit to Make the Case on Seattle Radio w Frank Barrow

Media spots are not always easy for me and this issue.  This one was not so bad other than the attachment to the myth creates some cognitive dissonance.  Barrow works hard against the tendency to come back to the refrain of how consumers choose to spend and then in the outro uses the example of a “need” to buy $600 iPhones, etc.  But this is precisely my point; A) an iPhone is an available, marketed product and; B) many do not need to have the $600-800 up front.  It is not money in-hand or account, it is paid in installments over the duration of the contract, like a loan or financing.


Update: July 21, 2016 – Debunking the Myths About Black Buying Power Statistics

There remain some who are at least trying to make room for this discussion.  In this piece published today i am referenced in an attempt to challenge yet another “study” who reference point is again the same Selig Center i challenge below as producing unsupportable numbers that are often misinterpreted.


Update: July 20, 2016 – Discussing the Myth of Black Buying Power

With increased protests in the streets and exploration of solutions for continuing police violence and persistent inequality has come renewed calls for the deployment of collective economic strength, particularly in the form of boycotts and reinvestment in Black banks.  This has also brought about some renewed focus on the notion of “Black buying power.”  In this edition of imixwhatilike! we spend a day in the life of explaining, discussing and debating what i call The Myth of Black Buying Power.  The myth claims Black America has more than $1 trillion in annual spending power which confuses many about the nature of capitalism, economic inequality or the meaning of “power” itself.  With the help of radio hosts Jennifer Bryant, Netfa Freeman, Garrett Harris (WPFW 89.3 FM) and Eugene Puryear (Sputnik Radio) – and even an on-air debate with B. Doyle Mitchell Jr., president and CEO, Industrial Bank – i attempted to explain my conclusion.


Update: July 12, 2016 – CEO Pay Increases Compared to Workers’ Is 940 to 10

From 1978-2015 the disparity in pay and transfer of income/wealth from the bottom up could not be seen more clearly than in this recent report from the Economic Policy Institute.  Black people, who are overwhelmingly represented among those living below the already fraudulently set “poverty line,” cannot be said to have economic “power” when nearly all working people have been weakened to this extent.  As this report summarizes the question of “why this matters… Exorbitant CEO pay means that the fruits of economic growth are not going to ordinary workers since the higher pay does not reflect correspondingly higher output. From 1978 to 2015, inflation-adjusted CEO compensation increased 940.9 percent, 73 percent faster than stock market growth and substantially greater than the painfully slow 10.3 percent growth in a typical worker’s annual compensation over the same period.”


Update: May 17, 2016 – Urban League Says We Are “Locked Out”

While I cannot agree with their conclusions as to why this is the case or what to do about our current lot it is important to point out these realities in the face of the persistent myth that these conditions result from financial illiteracy.  They write in this latest report, “Compared to 40 years ago, the income gap has remained basically unchanged (now at 60%), and the homeownership rate gap has actually grown six percentage points (now at 59%).”


Update: January 18, 2016 – State of the Dream: #BlackLivesMatter and the Economy

I’ve made referencing these reports routine since they began in 2004. I don’t always agree with their interpretation of facts but definitely appreciate their research into continuing/worsening inequalities.  And as always this year’s research/infographic demonstrates the empty claims behind “buying power” (and much more).

Dream_2016_v3


Update: January 8, 2016 – 19 Black Owned Banks in the United States | What If We Kept 10% of Our Annual Spending Power in Those Banks?

We are a little late getting to this year’s annual resuscitation of this “trillion dollar” wealth and buying “power” mythology, this time with a nod to a narrow nationalism.  Aside from political questions around Black capitalism or what precise evidence there is to support the idea that Black banks with more money is better for Black people (as opposed to just a few bankers) are at least the questions: what is the value of 10% of nothing or what is 10% of a myth? It certainly is not wealth, nor is it power.


Update: December 2, 2015 -North America’s 100 Richest People Control More Wealth Than the Entire Black Population

Yet another report demonstrates the fallacy of “Black Buying Power.”  How can “power” be used in relation to Black economic standing when as this latest study says, “100 richest US citizens control about as much wealth as all of the nation’s 42 million African Americans.”? Further the study reads, “African Americans’ net worth relative to whites has fallen by more than half since 2000: The average white family today has net assets of $141,900, compared with just $11,000 for black families—about the same paltry sum as back in 1985. Latinos have seen similar declines in net worth relative to whites.” There is simply nothing “powerful” in this relationship.


Update: November 5, 2015 – 5 White People Own More Land Than All of Black America Combined

Again, buying land (or stock) as a method of redressing increasing – and required – inequality is unfortunately also mythological when 98% is owned, of necessity, by those intending to maintain an inequality from which they continue to benefit.


Update: August 24, 2015 – Black Car Sales and an Absence of “Fair Value”

According to a release today from Hazel Trice Edney, “This year alone, African-Americans are projected to spend as much as $24 billion on new cars and other vehicles from America’s auto industry. Yet, research shows that, commensurate with their spending, Black consumers have little to show for their support of car dealerships, except the shiny new purchases in their driveways.”  Again, as stated below, these “shiny new purchases” are precisely the colonial trinkets available to colonized populations – not an expression of any genuine power.   The idea that Black people collectively used $24 billion on cars rather than other more sustaining or empowering enterprises extends the myth of “power,” when in reality these are acceptable purchases made – most often – with bank loans that would not otherwise be granted.  In other words, there is no $24 billion kitty into which African America could go to buy say stock or land or to pay down existing debt, etc.  Similarly, the fact that Edney cites an effort here to make deals to increase Black ownership of car dealerships as a way of capitalizing on this supposed “power” demonstrates the mythology involved.


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.

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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.”

Kwame Ture on Black Power (Berkley 1966)

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 (as opposed to actual in-hand figures) 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.”

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8 thoughts on “The Myth of Black Buying Power

  1. I am really happy to have read and listened to some of this work…really liked the Ball and Bismarck-cobham (?) interviews. The Economics of transformation is what i am most interested in…am always amazed of the lack of discussion by our so-called bright lights on production, of our literacy minus a numeracy…people don’t seem to know who Arthur Lewis is, what he theorized, why he was awarded a Nobel, why he was wrong to say that the plantations were ‘modern’, etc., I better stop….

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