Blog Articles


02

The Absurd Notion of Black Buying Power

and the Folly of Black Advertisers

 

By Marlon Aldridge, Sr.

 

“African-American’s Buying Power Projected to be $1.1 Trillion By 2015” (Black Enterprise)

 

Lately Black advertisers, especially those affiliated with the National Newspaper Publishers Association, report or commission studies about Black buying power. This is a manipulative practice (e.g., propaganda) used by Black advertisers in an attempt to convince big retail executives to spend advertising dollars with them because they supposedly have access and nuance understanding of the Black consumer market. My thought is this. In trying to manipulate big retailers, Black advertisers are unknowingly perpetuating negative perceptions they have of Blacks anyway (e.g., Blacks are poor because they spend all their money). Propaganda is the most efficient and productive method used by “power” groups to control “out of power” groups (e.g., American ethnic groups, especially Blacks). Imagine exerting very little effort to get a group of people to think negatively about themselves without them perceiving that you are doing so. Nothing else gets the job done better. Here’s another assessment of the subtle message propagated by the media and Black advertisers.

Dr. Jared Ball, a professor at Morgan State University, researched Black buying power, but says that $1.1 trillion doesn't mean everything is great for the Black community. "This phrase, 'buying power,' is used as a glossy euphemism for Black poverty [emphasis added] for being the fault of Black spending habits, as opposed to a pre-determined need in our economic model. A lot of people pick up this phrase and hear these large numbers, and assume Black America is stronger than Black America actually is."(See article, Black buying power hits $1.1 trillion. What does it mean?)

Companies spend $75 billion a year on advertising, but only three percent ($2.25 billion) of that is in Black publications, and casting Black actors, and on Black TV and radio stations. To counter this insignificant  amount of spending, the National Newspaper Publishers Association (a membership organization of Black advertisers) paid the Neilson Company to conduct market research on Black buying power, which it published in a report called, “African-American Consumers: Still Vital, Still Growing”. It purportedly shows the underrepresented potential and spending power of the African American community. Still big retailers routinely shun Black advertisers.

We speak about Black buying power because we cannot speak about Black wealth. I challenge the reader to look up white buying power. You will find it nowhere on the Internet. I tried a Google search using the keyword phrase, “white buying power”. Here’s what was returned. In short, there was no information on white buying power, only about Black buying power. This type of behavior by Black advertisers illustrates their hopelessness, despair, and unwitting participation in the perpetuation of insulting stereotypes hoisted on Blacks by the media. It also takes attention away from the growing number of Blacks living in poverty especially children and the high levels of unemployment among young Black men.

What about the racial wealth gap

The continual reporting of the racial wealth gap is another example of perpetuating negative stereotypes of Blacks (again, without them knowing it). According to the Institute of Assets and Social Policy, the wealth gap between Whites and Blacks has nearly tripled from $85,000 to $236,500 (from 1984 to 2009). Even Blacks with the same level of education and income as Whites were not able to keep up. Furthermore,

Extreme wealth inequality not only hurts family well-being, it hampers economic growth in our communities and in the nation as a whole. In the U.S. today, the richest 1 percent of households owns 37 percent of all wealth. This toxic inequality has historical underpinnings but is perpetuated by policies and tax preferences that continue to favor the affluent. Most strikingly, it has resulted in an enormous wealth gap between white households and households of color. In 2009, a representative survey of American households revealed that the median wealth of white families was $113,149 compared with $6,325 for Latino families and $5,677 for black families. (See article, The Roots of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide)

To buttress my argument about the absurdity of Black buying power, the article reinforces my point

Not surprisingly, increases in income are a major source of wealth accumulation for many US families. However, income gains for whites and African-Americans have a very different impact on wealth. At the respective wealth medians, every dollar increase in average income over the 25-year study period added $5.19 [of] wealth for white households…while the same income gain only added 69 cents of wealth for African American households.

While there are many factors which could explain why comparable increases in wages for Black households did not contribute to equal wealth gains, the subtle message is that Blacks spent their share of wage increases on non-wealth building purchases. Moreover, the word power as in “Black buying power” takes on a new meaning after reviewing this data. Where is the power when a dollar in the hands of a Black person does not deliver the same return on investment as it does in the hands of a White person? What damage does this consistent messaging do to the psyche of Black people?

Although this article did attribute government policies and tax preferences for the affluent as major factors for the widening racial wealth gap, only the headline, “The Roots of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide”, will be remembered while remedies to the problem are seldom applied.

Fact checking the reported $1.1 trillion figure

The Neilson Company 2012 report entitled “African-American Consumers: Still Vital, Still Growing” projected that Black buying power would hit $1.1 trillion by 2015. This figure was attributed to the Selig Center for Economic Growth at the University of Georgia. In 2012, interestingly enough, Black aggregate household income was estimated at nearly $667 billion (U.S. Census Bureau, 2012 American Community Survey). This is pre-tax money unlike the buying power estimate which is after tax money. In 2010 aggregate household income was estimated at nearly $641 billion. From 2010 to 2012, I calculated the annual growth rate of aggregate household income at 0.798 percent. Therefore, pre-tax aggregate household income would be about $839.8 billion in 2015. From 2002 to 2007, receipts generated by black-owned businesses increased 55.1 percent to $137.5 billion. This represented an annual growth rate of 9.2 percent. If this growth rate continues, Black-owned firms will generate $277 billion in 2015. If I add these two numbers together I get $1.1 trillion, which is in agreement with the Selig Center. However, my estimate was pre-tax dollars, not after tax dollars. Neither calculation had adjustments for inflation.

In conclusion, the media continually alienates and degrades Blacks with subtle messages of inferiority in the form of market research or statistics. Black advertisers unknowingly do the same. Tell them to stop!

Finally, we should all study propaganda as a method of social control. This way we don’t unknowingly play right into the hands of those who seek to control us, e.g., the media who seeks to control our minds and emotions and retailers who seek to rob us of our resources.

 

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