AFRICAN AMERICAN SPENDING POWER
Black America were an independent country, its
wealth would rank it as the 11th richest in the
world, according to a consumer research document
that analyzes Black spending power annually.
spending power is being squandered, observers
note, relegating Black America to economic
slavery, instead of financial freedom.
Buying Power of Black America" recently was
released by Target Market News Inc. (TMN), a
Chicago-based marketing research group. The
analysis of Black spending power last year
showed that some $631 billion flowed through
Black hands. By comparison, the United States
ranked first in Gross National Income (GNI), at
$9.6 trillion in year 2000 figures.
comparison that we published is designed to get
people to respect us as an economic force, but
the truth is we don’t behave in the same way
those nations do. So while the comparison is not
totally there, it makes a point that we are an
economic force," TMN Editor Ken Smikle told The
Final Call. "Folks wonder why we don’t spend
more money with us, but the real issue is we
don’t have access to capital to build businesses
that are convenient to where we shop and where
expectations are understandable because of the
centuries of discrimination we’ve suffered, and
folks want to see us be the answer to our own
problems that we didn’t create. But asking us to
go out of our way to do something that nobody
has to do because of a circumstance we didn’t
create or perpetuate, I think, is unrealistic,"
refutes the idea that the circulation of money
in a community can be documented. And he argues
that economic independence can be arrived at, if
Black Americans reach out to build trade
relationships with the international market.
want to become an isolated community that only
circulates its dollars amongst itself. We’re
part of the world and we have to spend our money
with the world," he said.
argue that a focus on circulating more money
within the Black community is key to economic
empowerment, and that spending power does not
necessarily equate to economic strength.
no such thing as consumer power; its an
oxymoronic term," claims Dr. Claude Anderson,
author of the book, "Powernomics." In a
capitalistic society, he argues, producers,
distributors and sellers have power over the
consumers, and that Black Americans are exactly
where they were in 1860 on the eve of the Civil
time, 98 percent of the Black people in America
were enslaved and we had half of one percent of
this nation’s wealth. One hundred and forty
years later, when we’re supposed to be free, we
still have half of one percent of the wealth of
the richest nation on earth."
A major reason for Black America’s
failure is the inability to recycle its money
within its communities, he implied. Nearly all
of Black income is spent directly outside of
Black hands, because Blacks do not practice
group economics—pooling of money, focusing it
into one geographical area and purchasing in a
bloc, he added.
example of group economics, according to Dr.
Anderson, was accomplished in the Greenwood
District of Tulsa, Okla., in the early 1900s—a
time when legal segregation forced Blacks to do
business among themselves. Commonly referred to
as "Black Wall Street," the area became a
nationally recognized entrepreneurial center, as
dollars circulated 36 to 1,000 times within the
Black community, according to authors Jay Wilson
and Ron Wallace in their book on the subject.
600 successful businesses were 21 churches, 21
restaurants, 30 grocery stores and two movie
theaters, plus a hospital, a bank, a post
office, libraries, schools, law offices, a
half-dozen private airplanes, and even a bus
system. On a fateful June 1, 1921, the business
district was bombed from the air and burned to
the ground in a riot by mobs of envious Whites,
including ranking city officials.
there are 38.3 million Blacks in America and
over 400,000 Black businesses, according to Dr.
Anderson. He claims that in the past 25 years,
other ethnic groups have increased their
disposable income and out-produced Blacks in
wealth because they practice group economics,
resulting in the creation of more businesses.
of every 10 Asians is in business; one out of 35
Whites is in business; one out of every 54
Hispanics is in business; and only one out of
every 104 Blacks is in business," he said.
Anderson encourages Blacks to use what he calls
competitive advantage in industries where Blacks
dominate in consumer patterns or in population.
consume more leather than anyone else, you
should be manufacturing leather," he said.
"Blacks need to come together, pool their
resources, build industries around their
competitive advantages and control everything
from the resources at the bottom to the
manufacturing and production, warehousing and
distributing, all the way to retail market at
the top, and confine their money by buying Black
and selling to any color.
"Otherwise, they will never be able to survive
in this society," he said.
Land, the basis of wealth
Dr. Ridgely Muhammad, an agricultural
economist and manager of Muhammad Farms, said
that the definition of "slave"—a person who has
lost control of himself and is dominated by
something or someone—describes the economic
condition of most Blacks in America.
to the Economic Program of the Honorable Elijah
Muhammad as a solution to the ills of the Black
community. And it starts with the land, he said.
heard the Hon. Elijah Muhammad say that
agriculture is the root of civilization, I
changed my major in undergraduate school from
architectural engineering to agricultural
economics," he said.
children of Israel were taken out of Egypt and
given he Promised Land so they could be a free
people. There has never been in the history of
the world a people who were free and independent
with no land. The number one thing a nation must
do is feed its people," he said.
Muhammad said that the American agricultural
economy is being slowly worn down, explaining
that 90 percent of family farm income comes from
save Black farms, he proposes that Blacks in
each city form a buying group to collectively
purchase produce in bulk orders for distribution
throughout the community. Several major cities,
he said, have buyers clubs successfully
underway. He also commended the POWER company
and MATAH network for striving to lead in the
manufacturing and distribution of Black products
good jobs, but we end up paying the money right
back to the people who we’re working for. The
White man’s system only works if there is a
slave, because the ‘upper crust’ doesn’t do any
work. They call it capitalism," he said.
to Dr. Jawanza Kunjufu, author and publisher of
"Black Economics: Solutions for Economic and
Community Empowerment," the three ways to
develop wealth are entrepreneurial ventures,
real estate or the stock market.
Chicago Sun Times report showed that Black
investment in the market dropped from 74 percent
last year to a current 61 percent, and that
Blacks are looking into real estate as a more
viable investment option.
report says that housing was Black America’s
greatest expenditure in 2002, at over $131
Entrepreneurship, which Dr. Kunjufu said was
championed for Black Americans by the Honorable
Elijah Muhammad and Marcus Garvey, offers many
challenges. He claims, however, that Black
Americans could maintain their communities,
despite a nine-year peak in unemployment, by
supporting Black businesses.
$1 billion that we spend with each other, we
employ 50,000 more of our people," he said.
Jews circulate money better, he said, because
they make decisions based on community, while
Blacks make decisions based on price. But Blacks
hesitate to support Black merchants because
their prices may be higher or the same as the
competitor, he added.
challenge also lies, he said, in location. The
25 percent of Black households that earn a
substantial income live in the suburbs where
there are considerably fewer Black businesses,
said Dr. Kunjufu.
best Black minds do not live or work, spend,
volunteer or invest in the Black community, can
it be anything else but a ghetto?" he asked.
"We have a
lot of income, but we don’t have a lot of
wealth. And we don’t have wealth, because we
simply transfer our wealth to others by spending
most of that with businesses other than our
own," said James Clingman, who is an adjunct
professor at the University of Cincinnati and
founder of the Greater Cincinnati African
American Chamber of Commerce.
Clingman echoed others who say that control of
manufacturing, production and distribution are
key to economic empowerment. But he also
contends that Blacks have psychological
also rich in intellectual capacity, and that’s
what bothers me," he continued. "If most of us
were not psychologically enslaved, we would be
spending with one another, we would be building
more businesses and supporting them, we would be
pooling our capital and pooling our intellectual
resources and doing more for our people, just
like others are doing in this country.
reason I see for us being the most educated and
intellectual Black people on this earth, and
having nearly $700 billion go through our hands
and still be in the condition that we’re in, is
that we’re still psychologically enslaved.
There’s no way that this White man can do to us
what he does and we just accept it. We have to
stop accepting it. Turn inwards, look inwards to
our own resources and do more for ourselves,
regardless of what he does," he said.