From the Washington Informer, "Big Spenders, Small Investors: Blacks Have Little to Show for Hard-Earned Dollars," by Stacy M. Brown, on 18 September 2013 -- If black America counted as an independent country, its wealth would rank 11th in the world.
However, African Americans continue to squander their vast spending power, relegating blacks to economic slavery instead of financial freedom, according to several consumer reports detailing the use of cash in the black community.
“There is no way we should have to beg for anything with all of the resources we enjoy,” said journalist, A. Peter Bailey, a Northwest Washington D.C., resident, former Ebony magazine editor, and author of, “Witnessing Brother Malcolm X: The Master Teacher.”
“It’s unthinkable today that we would find ourselves going hat-in-hand to anyone,” said Bailey, 75.
African Americans consistently outpace the total market population in overall growth, smart phone ownership, television viewing and annual shopping trips according to the new study, “Resilient, Receptive and Relevant: The African-American Consumer 2013 Report,” a collaborative effort by the Nielsen Company in New York and the National Newspaper Publishers Association (NNPA), located in Northwest Washington, D.C.
The report, which will be released on Thursday, Sept. 19, reveals that black buying power continues to increase, rising from its current $1 trillion level to a forecasted $1.3 trillion by 2017.
Despite the strong economic outlook, blacks continue to spend most of their money outside of the African-American community and, according to Nielsen and NNPA, advertisers have repeatedly slighted the black media, spending only three percent, or $2.24 billion, of the $75 billion spent with all media last year.
“No one is going to do anything for us. However, we can flex our economic power, but we have to stop being selfish and pool our resources in order to do so,” Bailey said. The Malcolm X disciple and former Howard University student said blacks should learn from the famous Montgomery, Ala., bus boycott that followed Rosa Parks’ arrest when she refused to give up her seat to a white man.
From Dec. 5, 1955 to Dec. 20, 1956, blacks boycotted Montgomery buses in the first large-scale demonstration against segregation in the country. The boycott also catapulted Martin Luther King Jr. into the role of the country’s civil rights leader.
The 381-day boycott resulted in the local bus company losing hundreds of thousands of dollars in revenue as the 17,000 African Americans in the community comprising more than 90 percent of its ridership refused to patronize the bus system. “Instead, black people took taxis, walked or even rode horses and the company lost money,” Bailey said.
King understood better than anyone that civil rights included economic rights, said Rep. John Conyers Jr. (D-Mich.), dean of the Congressional Black Caucus who’s now in his 25th term in Congress, the only member ever endorsed by King.
“We can never truly form a more perfect union until income, wealth and opportunity are made more equal,” said Conyers, 84.
Statistics compiled by several organizations reveal that the purchasing power of blacks continues to be evident in so many ways.
Each year, African Americans spend more than $47 billion on Lincoln automobiles, $3.7 billion on alcohol, $2.5 billion on Toyotas, $2 billion on athletic shoes, and $600 million each year on McDonald’s and other fast foods, according to Target Market News Inc., a Chicago-based marketing research group.
Blacks also spend wildly to keep up their appearances.
The black hair care and cosmetics industry counts as a $9 billion a year business, but while African Americans are spending the most, they are profiting the least, said officials from the Black Owned Beauty Supply Association (BOBSA) in Palo Alto, Calif.
Beauty product lines designed for African Americans were once 100 percent owned and operated by blacks, today other ethnic groups control more than 70 percent of the market, a BOBSA spokesperson said.
Another report, released in May, titled, “The African American Financial Experience,” revealed that blacks have been hurt to a greater degree than any other group during the Great Recession.
The study, produced by the Prudential Company in Newark, N.J., noted that blacks were more likely to lose jobs and to own homes with appraised values that had fallen below what was owed on the mortgage.
“When most black people buy homes, we hurt ourselves economically,” said Dorothy A. Brown, professor at law at Emory University in Atlanta and a former special assistant to the Federal Housing Commissioner at the U.S. Department of Housing and Urban Development in Southwest Washington, D.C.
Home ownership has been an important vehicle in creating a solid white middle class, but it has not done the same for most black homeowners, said Brown, 53.
Officials at the Brookings Institution in Northwest Washington, D.C., said poorer white neighborhoods had more home value per income than poorer minority neighborhoods and, even when homeowners had similar incomes, black-owned homes were valued at 18 percent less than white-owned homes.
The current homeownership rate reveals that 73.5 percent of whites own homes while approximately 43.9 percent of African Americans are homeowners, according to the Harvard Joint Center for Housing Studies State of the Nation report for 2013.
“The recent crash and subsequent rebounding of the market, fiscal cliff jitters notwithstanding, show the white median net worth is down by only 16 percent while the black median net worth is down by 50 percent,” Brown said. “This is because the stock market has significantly rebounded and compensated whites’ losses in home equity, but blacks, without comparable stock investments, have not benefited.”
The Brookings study also revealed that, while many whites are comfortable investing in the stock market, most blacks are not.
Sixty percent of African Americans have less than $50,000 saved in company retirement plans and only 23 percent have more than $100,000.
The loyalty blacks have to their church also has proven costly, said officials at Faith Communities Today, a nonprofit based in Hartford, Conn.
A 2013 study revealed that black churches have collected more than $420 billion in tithes and donations nationwide since 1980, an average of $252 million a week.
“What people fail to see and understand is that, the church pastors aren’t waiting for miracles to fund their lifestyles, they don’t have to pray, day in and day out, to make their ends meet,” said Northwest resident and author, Byron Woulard.
“They are getting rich off God, not from God,” he said. (source: Washington Informer)