African American Buying Power Soaring
CHICAGO — The economic might of African American consumers will swell to $1 trillion by 2010, per reports from Packaged Facts and the Selig Center for Economic Growth at the University of Georgia.
The numbers from the two research bodies are fairly close—Packaged Facts, a division of MarketResearch.com, Rockville, Md., pegs current buying power at $762 billion growing to $981 billion by 2010. Selig noted in a quarterly newsletter released late last year that the $761 billion pocketbook of the nation’s largest minority group would hit the trillion-dollar mark in five years.
Selig attributed the gains to better employment opportunities, particularly since the number of black-owned businesses has grown four times faster than the number of all U.S. firms, per the U.S. Census. The number of African Americans attaining high school diplomas increased 10% between 1993 and 2003, the largest gain reported for any group. Also, the median age for the black population is 30.2 years, meaning larger proportions are entering the work force or are graduating from entry-level jobs while smaller numbers are retiring.
The Packaged Facts report for the first time includes a regional breakdown of its findings, which show that African Americans in the West and Northeast have higher average incomes than those in the Midwest and the South. The disproportionate share in the Northeast indicated, per Packaged Facts, that African Americans in that region are more likely to want to get to the very top, viewing work as a career, not just a job. They also are more likely than African Americans elsewhere to feel more financially secure and happier with their standard of living.
Despite burgeoning economic power, African Americans are largely an untapped consumer.
“Having roughly the same purchasing power as Hispanics, African Americans tend to be left behind when it comes to marketing and advertising because Hispanics are expected to have more rapid population growth,” said Don Montuori, Packaged Facts publisher. “Marketers would be wise, however, to tap into the African American segments that outpace their Hispanic counterparts, such as those with incomes greater than $50,000, owner-occupied households, married-couple families and African American women—all sectors which offer huge potential in the consumer goods markets.”
The national share of buying power for African Americans will increase to 8.6% by 2010 from 8.4% in 2005, per Selig. Hispanic buying power is projected to rise to 9.2% from 8.1%; Asian American buying power will rise to 4.9% from 4.4%, while American Indian buying power will stay steady at 0.6%.
Mike Beirne