African Americans have an immense buying power in the United States, with a minute portion of those funds directed to supporting Black communities and businesses. According to Nielsen, a universal measurement company, it is estimated that African American’s buying power will increase to $1 trillion by the year 2015; further suggesting that if African Americans comprise a country, it would be the 16th largest country in the world. It would behoove the African American community to invest their consumerism into Black-owned businesses to promote economic equality across race.
One individual who has made a commitment in supporting Black-owned businesses is Maggie Anderson. Anderson is the co-founder of Empowerment Experiment and the author of, Our Black Year: One Family’s Quest To Buy Black in America’s Racially Divided Economy, in which she chronicles her family’s decision to buy and support solely from black-owned businesses for an entire year.
- Anderson also authored an essay in the National Urban League’s 2014 State of Black America Report, Facts vs. Fiction: Buying Black As An Economic Empowerment Strategy, in which she states:“In practice, self-help economics seems to be more proactively and effectively leveraged by other ethnic groups. For example, in Asian communities, a dollar circulates among the community’s banks, retailers, and business professionals for up to 28 days before it is spent outside the community. In the Jewish community, the circulation period is 19 days; in the White Anglo-Saxon Protestant (WASP) community, it’s 17 days; and in the Hispanic community, it’s 7 days. Yet, in the Black community, the dollar lives only six hours before it leaves the community.”
- It is essential to discuss and bring awareness to this topic now, as the black buying power continues to rise. According to Nielsen’s, Resilient, Receptive and Relevant African American Consumer 2013 Report, the buying power of African Americans is expected to increase to $1.3 trillion by the year 2017. Based on the Nielsen report, this amount of funds, if generated within the Black community, would significantly impact and empower many black-owned businesses. Which in return would allow black business owners to employ more minorities and generate more resources.
According to Timothy Bates’ article, The Urban Development Potential of Black-Owned Businesses, his research shows that White-owned firms tend to hire mostly Whites, whereas Black-owned firms are more inclined to hire more minorities. Bates suggest:
- While there has been an increase in the amount of new Black-owned businesses in recent years, a vast amount of those businesses only last for a few years before going out of business. In reference to James Clingman’s article, Accelerating Black Business Growth, in addition to counting Black-owned businesses, it is crucial that African Americans find ways to grow and support Black entrepreneurs.
- It is important to recognize the Black buying power and for African Americans to start supporting Black-owned businesses. Another key factor to consider is the importance of Black businesses collaborating with other Black-owned businesses. Earl G. Graves, Sr., the originator of Black Enterprise magazine, states in his Publisher’s Letter, “…black business cannot grow if we insist on isolating ourselves from other black entrepreneurs. It’s not enough for today’s black entrepreneurs to talk business. We must do business with each other.”
- If African Americans, especially the younger generation of Blacks, are informed and educated about the economic behavior of Blacks in the United States, this may cause them to direct their spending patterns towards the black community and businesses; which in return will cause a surge in the support for black-owned businesses. Supporting black businesses will enable business owners to employ more minorities and hopefully reduce the unemployment rate for African Americans. This would allow the black dollar to hit the Black community 3 to 12 times before it goes out into the world, which would be consistent with Asian, Jewish, and White communities.
- Michael Imhotep, the creator of the African History Network, discusses this issue.