African-Americans Amass Greater Buying Power

Article excerpt

AFFIRMATIVE action might have recently been pushed to the back of the public-policy bus, but not before giving some African-Americans the wherewithal to strengthen their future power as consumers.

The buying power of blacks - the amount of income available after taxes for purchase of goods and services - is rising faster than for the population as a whole. From 1990 to '96, it swelled by 40.5 percent, compared with the general population's 35.2 percent rate, finds a recent study by the University of Georgia at Athens.

Moreover, the black population's share of the nation's total buying power is expected to rise from 7.5 percent in 1990 to 7.8 percent next year, the study reports. (That percentage is still well below African-Americans' 12 percent share of the entire population.)

Blacks' increased leverage at the cash register stems partly from the rapid growth in their population. It is expected to expand 45 percent by 2025 compared with a 20 percent increase for the white population, according to the Census Bureau.

But the new financial clout is also attributable to a degree to higher incomes resulting from affirmative action and other programs aimed at giving blacks a fair place in schools and the workplace, demographers say.

Rising incomes

Indeed, the percentage of black households with incomes $50,000 or higher rose from 6 percent in 1967 to 15 percent in 1993 in constant dollars.

Some demographers say the growth in the percentage of affluent households stems from new opportunities in education and jobs.

The US Supreme Court, however, in a ruling last month, threw into question the constitutionality of federal programs that bestow benefits on the basis of race.

US businesses can tap into the rising wealth of African-American consumers by recognizing the population's complexity as well as its immensity. In the past several years, large numbers of blacks have moved into suburban areas, belying the crude stereotype of blacks as an urban population of modest means.

"Historically, all blacks have been seen as poor and powerless, and today businesses must recognize the diversity of the African-American community," says William O'Hare, a demographer at the Annie E. …