Year In Review: How Do Black People Spend Their Money?
Originally posted on November 5, 2010. Updated December 27, 2013.
As we look at the year in review, the most popular article posted on this website/blog was an article detailing how black people spend their money. The article was “How Do Black People in America Spend $507 Billion Dollars Annually?”
This article has been the most read and commented article for 3 years running. Once I learned that this was the most popular and discussed article on the website, two questions immediately came to my mind:
- What does that say about the topic in terms of being relevant to our site visitors?
- Has anything changed?
This has been a hotly debated topic not only on this site, but in our office, at social events and in beauty and barber shops across America.
We’ve updated our original article with some information from an article written in September 2013, by Stacy M. Brown posted on the Washington Informer.com website titled, “Big Spenders, Small Investors: Blacks Have Little to Show for Hard-Earned Dollars.” In that article, Ms. Brown writes, “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.”
If history is any indication of future behavior, this updated article will be hotly debated in 2014. Let’s hope that we can make some progress in this area and close the wealth gap.
Happy New Year!
Gary Johnson, Founder & Publisher – Black Men In America.com
Other highlights from “Big Spenders, Small Investors: Blacks Have Little to Show for Hard-Earned Dollars” include the following:
- 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.
- 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.
- 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.
- The current home-ownership 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.
- 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. Woulard, whose books include, the 2011, “Pawn Queen,” noted that the money spent tithing could buy as many as 93,333 homes valued at $150,000; pay for tuition up to $15,000 a year for 933,333 college students, and feed every homeless American for a year. “It’s the best hustle on the planet. If you don’t get it here on earth, you’ll get it when you die and go to heaven,” Woulard said. “And, it just so happens that not one person in the history of this planet has died, went to heaven, and come back to tell everyone that it’s true.”
According to Dr. Boyce Watkins, a Scholar in Residence in Entrepreneurship and Innovation at Syracuse University in New York, also known as “the people’s scholar,” “We don’t use money to invest or produce,” said Watkins, 42.” When we get our tax refund, we go straight to the store.”
The 17th annual report on “The Buying Power of Black America” also includes a dollar-by-dollar breakdown of the Black economy.
Copies of “The Buying Power of Black America” can be purchased from Target Market News for $99.00 for the hard copy version and $65.00 for the digital version. For more information call 312-408-1881, or click here to purchase online.
Below is our original article posted in November 2010. Have their been any improvements? You be the judge.
With $836 Billion in Total Earning Power, only $321 Million Spent on Books while $7.4 Billion Spent on Hair and Personal Care Products and Services
New ‘Buying Power’ report shows black consumers spend as economy improves
New 16th edition shows expenditures rise to $507 billion
(November 1, 2010) African-American consumers are cautiously increasing their spending in some key product categories, even as they continue to make adjustments in a slowly growing economy. The finding comes from the soon to be issued 16th annual edition of “The Buying Power of Black America” report.
In 2009, black households spent an estimated $507 billion in 27 product and services categories. That’s an increase of 16.6% over the $435 billion spent in 2008. African-Americans’ total earned income for 2009 is estimated at $836 billion.
The report, which is published annually by Target Market News, also contains data that reflect the economic hardships all consumers are facing. There were significant declines in categories — like food and apparel — that have routinely shown growth in black consumers’ spending from year-to-year.
“These latest shifts in spending habits are vital for marketers to understand,” said Ken Smikle, president of Target Market News and editor of the report, “because they represent both opportunities and challenges in the competition for the billions of dollars spent by African-American households. Expenditures between 2007 and 2008 were statistically flat, so black consumers are now making purchases they have long delayed. At the same time, they re-prioritizing their budgets, and spending more on things that add value to their homes and add to the quality of life.”
The median household income for African-Americans dropped by 1.4% in 2009, but because of students going out on their own, and couples that started their lives together, the number of black households grew 4.2%. This increase meant that many household items showed big gains. For example, purchases of appliances rose by 33%, consumer electronics increased 33%, household furnishings climbed 28%, and housewares went up by 37%.
Estimated Expenditures by Black Households – 2009
|Apparel Products and Services||$29.3 billion|
|Beverages (Alcoholic)||3.0 billion|
|Beverages (Non-Alcoholic)||2.8 billion|
|Cars and Trucks – New & Used||29.1 billion|
|Consumer Electronics||6.1 billion|
|Entertainment and Leisure||3.1 billion|
|Health Care||23.6 billion|
|Households Furnishings & Equipment||16.5 billion|
|Housing and Related Charges||203.8 billion|
|Personal and Professional Services||4.1 billion|
|Personal Care Products and Services||7.4 billion|
|Sports and Recreational Equipment||995 million|
|Telephone Services||18.6 billion|
|Tobacco Products||3.3 billion|
|Toys, Games and Pets||3.5 billion|
|Travel, Transportation and Lodging||6.0 billion|
Source: Target Market News,
“The Buying Power of Black American – 2010”
“The Buying Power of Black America” is one of the nation’s most quoted sources of information on African-American consumer spending. It is used by hundreds of Fortune 1000 corporations, leading advertising agencies, major media companies and research firms.
The report is an analysis of consumer expenditure (CE) data compiled annually by the U.S. Department of Commerce. The CE data is compiled from more than 3,000 black households nationally through dairies and interviews. This information is also used for, among things, computing the Consumer Price Index.
The report provides updated information in five sections:
– Black Income Data
– Purchases in the Top 30 Black Cities
– Expenditure Trends in 26 Product & Services Categories
– The 100-Plus Index of Black vs. White Expenditures
– Demographic Data on the Black Population