Magazine article Black Enterprise

Hit Discriminators Where It Hurts: African Americans Must Use Their Vast Spending Power to Make Change

Magazine article Black Enterprise

Hit Discriminators Where It Hurts: African Americans Must Use Their Vast Spending Power to Make Change

Article excerpt

African American consumers are a powerful force in the U.S. economy. Based on the 2001 Consumer Expenditure Survey, the $383 billion spent by African American consumers accounts for 5% of all U.S. consumer spending and 4% of Gross Domestic Product. Despite this collective buying power, black consumers are still greeted with suspicion about their intentions and with skepticism about their ability to pay.

Given the importance of black consumer spending for the U.S. economy, and given the intense competition by businesses for those dollars, what can be done to discourage future discrimination? The answers may very well lie in how African American consumers respond when there is convincing evidence of consumer discrimination. The nature of the response is critical because it determines the penalty that companies face when their employees treat black consumers poorly. The best way to prevent consumer discrimination is to ensure that companies incur substantial penalties when it occurs.

The continued slights that African American consumers face suggest that the penalties that companies now face simply are not high enough. Victims of consumer discrimination typically respond by filing a lawsuit against the company. Although there may be monetary settlements equaling millions of dollars, these payments serve only to compensate the victims. They do not serve to punish the company, hence deterring similar conduct in the future. For example, in a well-known case against Denny's, the company paid a settlement of $54 million in 1994, which seems substantial but accounts for only 1. …

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