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:

1. What does that say about the topic in terms of being relevant to our site visitors?
2. 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.”

Stacy M. Brown’s article posted on the Washington Informer.com website concludes with what is described as an inescapable fact:    When black folks make money, they are quick to spend it!

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.

“How Do Black People in America Spend $507 Billion Dollars Annually?”

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
Appliances	2.0 billion
Beverages (Alcoholic)	3.0 billion
Beverages (Non-Alcoholic)	2.8 billion
Books	321 million
Cars and Trucks – New & Used	29.1 billion
Computers	3.6 billion
Consumer Electronics	6.1 billion
Contributions	17.3 billion
Education	7.5 billion
Entertainment and Leisure	3.1 billion
Food	65.2 billion
Gifts	9.6 billion
Health Care	23.6 billion
Households Furnishings & Equipment	16.5 billion
Housewares	1.1 billion
Housing and Related Charges	203.8 billion
Insurance	21.3 billion
Media	8.8 billion
Miscellaneous	8.3 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

Click here to read comments in response to the original article.

NBA Hall of Famer Turned School Crossing Guard: It’s Not About The Money, It’s About The Kids

By Black Men In America.com Staff

Washington, D.C. native and NBA Hall of Famer Adrian Dantley is one smart dude, who’s probably a bit cheap.  Since last fall, Dantley has apparently been working as a crossing guard in Silver Spring, MD, a suburb of Washington, D.C.  In his new position, Dantley earns approximately $15,000 per year including a benefit package with health insurance.  NBA veterans aren’t provided health insurance.  According to reports, the 58-year old Dantley is not broke.  Say what?  A retired NBA player who still has his money?  Dantley is reportedly financially secure, likes working with children and does not want to sit around the house all day.

Dantley recently told CNN that he forked over $17,000 for health insurance coverage last year, which is more than his crossing guard salary, but health insurance comes with the job.

More power to A. D. for being a role model and keeping our kids safe.

The African-American Tradition of Giving

By Randal Pinkett & Jeffrey Robinson,
Author of Black Faces in White Places: 10 Game-Changing Strategies to Achieve Success and Find Greatness

African Americans have a long-standing tradition of philanthropy, or giving back to improve the human quality of life. It is rooted in the African concept of family, which formed the basis for social life and social values in Africa.

In the twenty-first century, giving by African Americans reflects many of the traditions that have been established over the years. Modern African American giving has distinct underlying philosophies and characteristics, namely:

• A broad conceptualization of family and kinship ties that include not only blood relatives but also distant relatives, friends, neighbors, and long-time acquaintances. This is embodied by references to other African Americans-even when they are not related to us-as “brothers,” “sisters,” “cousins,” and the like.
• A relative preference for giving directly to individuals as opposed to nonprofit organizations.
• A higher value for contributions of time than money. The church is the single greatest beneficiary of African-American monetary donations. More than two-thirds of African-American charitable dollars are contributed to churches.
• A deep feeling of obligation to help members of the Black community and others in need or crisis as a result of being helped by others. To the extent that someone is known or perceived to have abandoned this obligation they may be labeled as a “sellout” or an “Uncle Tom.
• A sense of responsibility to not leave anyone behind, and success alone is insufficient without helping others to also be successful. Helping any part of the community is interpreted as helping the entire community.

One of the major challenges you’ll face as a successful and busy individual is making decisions about the approach you’ll take toward your giving. What is your strategy for giving? “Strategic giving” is a phrase we use to describe giving in the right way at the right time for the right reason, cause, or issue.

We believe the four foundations of giving are time, talent, treasure, and something we refer to as touch. It is our personal responsibility to find ways to give back generously in each of these areas. It’s been said that we should all donate 10 percent of our time, talent, and treasure to worthy activities and organizations that make the world a better place. The basic principle here is an ancient one called tithing – a concept that both of us wholeheartedly endorse. The idea of tithing has biblical origins. The people of God were required to give 10 percent of their earnings back to God. The priests received the tithe on God’s behalf, and their responsibility was to distribute this money, as well as other goods and in many cases livestock and crops, to widows, the fatherless, strangers, and the homeless and destitute, and keep some for the operation of the house of God – the temple or the church. Clearly, this practice had positive ramifications throughout the community.

The above is an excerpt from the book Black Faces in White Places: 10 Game-Changing Strategies to Achieve Success and Find Greatness by Randal Pinkett and Jeffrey Robinson. The above excerpt is a digitally scanned reproduction of text from print. Although this excerpt has been proofread, occasional errors may appear due to the scanning process. Please refer to the finished book for accuracy.

Adapted from Black Faces in White Places: 10 Game-Changing Strategies to Achieve Success and Find Greatness by Randal Pinkett & Jeffrey Robinson with Philana Patterson (AMACOM; October 2010; $24.95 Hardcover; 978-0-8144-1680-8).

Author Bios
Randal Pinkett, Ph.D., coauthor of Black Faces in White Places: 10 Game-Changing Strategies to Achieve Success and Find Greatness, was the winner of season four of The Apprentice and the show’s first minority winner. He is the co-founder, chairman, and CEO of BCT Partners, an information technology and management consulting firm. Dr. Pinkett is based in Somerset, New Jersey.

For more information please visit www.randalpinkett.com and follow the author on Facebook and Twitter.

Jeffrey Robinson, Ph.D., coauthor of Black Faces in White Places: 10 Game-Changing Strategies to Achieve Success and Find Greatness, is a leading business scholar at Rutgers Business School and lives in Piscataway, New Jersey.