BOIS-CAIMAN-1791-CLUB ist auf und Mach mit !

The Enduring Myth of Black “Buying Power”

The Enduring Myth of Black “Buying Power”

January 31, 2010 by freemixradio

2010 begins with yet another regurgitation of the myth of Black “Buying Power.” This time it is the highly laudable (sorry, laughable) BET who has produced a “study” which claims an economic power that simply does not exist. BlackAmericaWeb too picked up the “story” and made reference to studies the falseness of which we have already demonstrated below. What remains is an increasing disconnect between reality and perception causing even further distance between people and genuine progress.

Update: January 29, 2010

This BET “study” which is based on a “comprehensive” survey of “80,000 African American consumers” concludes that because of an increased Black population, one which spends more on technology and is predicted to have a “buying power that will reach $1.2 trillion by 2013, that there is an economic strength among Black people that simply does not exist. Again, “buying power” is a marketing phrase meant to define the ability of a demographic to spend its money with this or that corporation. It is not an indicator of income, wealth or access to assets (such as land, stock, rental property, etc.) all of which are real indicators of economic power and all of which point (as described below) to an absolute lack of power in Black America. From these misleading numbers and conclusions we get equally misleading analysis that suggests – and by design reaffirms the lie – that, as the esteemed Black spokesperson Dr. Boyce Watkins said in response to this latest “study,” “Unfortunately, when African-Americans make money, we spend it. We don’t use it to invest or produce… When we get our tax refund, we go straight to the store.” This is an absurd explanation of poverty.

As we have been arguing here there is no collective $1.2 trillion that wealthy investors choose to spend frivolously. These numbers are aggregates of money spent by millions of hard working, mostly poor people spending in relatively small amounts on items which are available to them. There are no offers of stock, nor is there land and property all awaiting sale but being ignorantly passed up by foolish savages who are incapable (apparently) of making intelligent use of their billions. Poverty is not the result of spending habits. Poverty is a well-structured planned outcome of an economic system which demands that it exist.

Update: Addendum December 22, 2009

I had initially put this together as an email response to some friends but have since found it to be a bit more useful and, therefore, wanted to give it an actual post. It has drawn some criticism, some of which is valid and deserving of response. My primary point is to challenge what remains an absolutely false notion that somehow this concept of “buying power” speaks to genuine economic strength among Black Americans (or most others). “Buying power” is a marketing phrase designed to assist businesses, almost all white and with no concern for the lived experiences of Black people, in targeting populations based on patterns of spending. “Buying power” should not be confused with wealth nor should it be confused with equally false notions of “progress.” In this case “power” means an ability to enrich others’ businesses. “Power” in this case has absolutely nothing to do with traditional struggles over control over one’s (or a community’s) land, labor, politics or culture. This “power” means only the ability to positively impact the bottom line of a corporation. The problem, my primary point of concern, is when this point is lost and people tout these numbers as an opportunity for liberation lost on the mindless activity of a free but irresponsible or stupid population.

One possible flaw in my argument below is that I equate credit or loans (in the example of an automobile purchase) with the marketer’s claims of “buying power.” In fact, as the Selig Center states accurately in their own definitions and reports, “buying power” refers only to “disposable income,” or “the total personal income available for spending on goods and services after taxes.” Further, “Simply defined, buying power is the total personal income of residents that is available, after taxes, for spending on virtually everything that they buy, but it does not include dollars that are borrowed or that were saved in previous years. It is not a measure of wealth, and it does not include what tourists spend during their visits.” This, however, remains unclear. Their definition of “buying power” as not including “dollars borrowed” in “previous years” seems not to discount money borrowed in that same year. If so, my point below would indeed be sound as credit card debt or car loans from that same year would be counted as “buying power.”

However, again, the intent is to assist businesses not to alleviate planned or necessary poverty. These arguments of “buying power” are also to assist in myths of poverty being the result of pathological habits among Black and other populations whose innate flaws are beyond even the ability of the most magnanimous of civilizations. Then the numbers associated with this “buying power” can falsely suggest that were only these savages more responsible with their money poverty and economic inequality would simply disappear. My own error was in not making more clear that one problem I have with these calculations is their definition or explanation of “disposable income.” If, as stated below, the average Black household has a median net worth of less than $6,000 and there has been a 30+ year decline in workers’ real wages overall the response to which was increased credit to maintain absurd spending levels then where is the “power?” If most income is spent on the basic necessities of survival (food, clothing, shelter) then how is it “disposable?” How can something be called “disposable” or meant to convey “power” when, as the Selig report says, the top 5 expenditures for Black people include “phone services, utilities and groceries?” Are these truly to be considered gratuitous purchases along with the other clothing and footwear? Even if we assume that most of the clothing and shoes purchases are beyond absolute necessity are we still to assume that Black people are poor because they spend too much on phone, electricity and food? Perhaps more importantly, should buying food and phone use be allowed in any society to result in the kinds of poverty faced in the U.S. by Black people (or anyone else)?

It is for this reason that I attempt below to place Black America within a global context of colonialism. This is at the basis of my argument that Black people (indeed almost everyone) are not capable of purchasing assets (stocks, land, property, etc.) because so much of their “disposable” income is used for basic needs leaving only access to more frivolous items. Colonized populations have no access to the most wealth-producing elements of a society and are forced/manipulated/relegated to basic necessities or the fruitless results of conspicuous consumption. This is the point of a capitalist economy. The goal in such an arrangement is to have that which does increase wealth (and then, of course, societal control, political power, etc.) to be in the hands of a few. No system or society is designed to allow any and everyone an equal opportunity to rule it. This was precisely his point when Malcolm X made clear that “It’s impossible for a chicken to produce a duck egg… a chicken just doesn’t have within its ystem to produce a duck egg. It can’t do it. It can only produce according to what that particular system was constructed to produce. The system in this country cannot produce freedom for an Afro-American. It is impossible for this system, this economic system, this political system, this social system, this system, period… And if ever a chicken did produce a duck egg, I’m certain you would say it was certainly a revolutionary chicken!”

From Original Post March 12, 2008

Myths of Black America’s “buying power” continue to confuse just how bad things really are or how this “permanent recession” is an economic and social necessity. This myth is meant to shift the blame of poverty onto the poor and suggests that economic inequality is more an issue of pathological behavior than a scientific inevitability. In a speech delivered on Black Power (see below) Kwame Ture accurately cut through the morass of madness known as “economics.” He stated simply and clearly, “a man is poor because he does not have money. Period. If you want to get rid of poverty you give people money. Period.”

The Myth of Black “Buying Power”*
Jared A. Ball

Achieving economic clarity is a bit more difficult than it would appear. The myth of Black “buying power” resurfaced yet again in February as more “news” was released from African American/Black Market Profile (AABMP). The myth, now updated, projects that this “spending power” will reach $1 trillion by 2011. This mythology of an African America whose national economic strength rivals that of most countries is consistently misunderstood, improperly quoted and ultimately used to deny the outrageous inequality and exploitation this country still requires to maintain itself as the single superpower/empire.

First and foremost the initial report cited needs to be understood for what it is and its purpose which, as is as they say atop their report, “The Market Profiles gather and synthesize the most recent findings from dozens of sources in order to help marketers communicate more effectively with these important consumer segments” (emphasis added). So these numbers are floated not for their accuracy regarding Black people’s economic standing but for their ability to tell which corporations should more aggressively target their marketing (psychological warfare) towards African America to get what little money actually is held there.
Part of their projections are based on the percentage (30.2) of African American households whose income is more than $50,000 per year. Somehow this is meant to convey a sense of economic progress or sustainability. Not considered in this report is that if the poverty line in the U.S. (a number already itself designed to hide poverty) is set so as to only count those in poverty who live in households of 4 earning less that $20,000 annually then, of course, a $50,000 would appear stronger than it actually is.

The AABMP report, however, references for its numbers a study from the Selig Center for Economic Growth whose numbers also must be held in question. Their justification for suggesting in 2006 that that year would be one in which African America, as the “nation’s largest minority market,” would use their “economic clout” to “energize the U.S. consumer market as never before.” They cite as evidence such misleading statistics as:
1. Black population growth
2. Increased job opportunities
3. More education for Black America
4. Only 8.1% of Black America is over 65 years of age or at “career pinnacles” at which point wage increases “decelerate,” whereas, whites are 13.5% over 65.
5. Black people spend more than “non-blacks” on natural gas, electricity, telephone services and footwear and a higher proportion of their money on groceries, housing and women’s and girl’s clothing.
6. And this author’s personal favorite, that despite “a substantial gap in homeownership rates” this ’suggests a possible opportunity for market expansion in the years ahead.”

We must be clear. Income is not wealth. “Buying power” as a phrase and one measured in these ways offers so many illusions that contradict the previous point. Population growth and increased jobs (increased from what?) do not, in and of themselves, say anything about economic power. More education means little as well when advanced degrees are considered an absolute necessity for economic advancement (certainly still no guarantee) and even their own report (p. 9) shows that in 2005 only 19% of African America earned a Bachelor’s degree or higher and the percentage of that population who earned a graduate professional degree was so low as to only warrant an “N/A.”

It is also important to note that “buying power” is a confused phrase in that it, again, says nothing of a wealth Black people have little of but also suggests that this “power” is or can be for community uplift. The fact, again, that this is target marketing material means that by “power” they mean the ability to generate money for corporations to whom this spending will be geared. It does not mean that Black America has some un-tapped economic strength that can be marshaled to buy that which increases wealth (land, stocks, etc.) and speaks to the basics of colonial exploitation. That is, that the colonized are left only to purchase trifling gadgets and trinkets “footwear” and “clothes,” as opposed to land, stock and other capital most of which is sequestered among the tiniest elite minority.

And finally, it is sadly laughable that too many of us are fooled into thinking our power is squandered by poor purchasing habits, again, since this is all to which we have access anyway. The idea that land and stock is there waiting but we’d rather go to the mall for trinkets results from mass capitalist, white supremacist propaganda which too many of us have imbibed. So, in fact, the suggestion in 2006 that homeownership represents “a possible opportunity for market expansion” was a precursor to the damage and pain most are seeing only now; predatory lending, sub-prime scandals, mortgage and home foreclosure and the what United for a Fair Economy (UFE) recently reported as “the greatest loss of wealth for people of color in U.S. history… {upwards of} $200 billion.”

Black people, like most others, are an exploited, colonized population whose wealth-generating capabilities are, just as these reports really say, for an elite who have nothing to do with Black people. Black wealth resides in elite white enclaves here and abroad while African America devolves economically, politically and in terms of healthcare, education (quality of and access to), police brutality and mass incarceration. And even within Black (and Latin) America 25% of the households have 90% of the wealth demonstrating a great divide within communities where Black median net worth is already a pathetic and dangerously low $5,988 and $7,932 for Latin America compared to $88, 651 for whites. Black people have no money. We spend on credit and loans (none of which is considered for either of these studies) so as to project a “power” that we in fact are far from having. Rarely does anyone have in their pocket or account the $20,000 for a car or $30,000 (and way up) for one year of college. We take loans for these and other purchases which then count towards our “spending power.” The debt we fall into this way and others (i.e. credit cards) is counted as a “positive” by those to whom our pockets are perpetually emptied. But this is not and can never be “power.”

Anyone, including Black “leaders,” who parade fanciful numbers before their unsuspecting audiences so as to, again, suggest that irresponsibility is the cause of Black poverty need to be checked, vigorously. We need to get back to an increased intelligent and honest discussion of economics so we can be where Ture was when he left, as he and his comrades always said when answering a phone and saying goodbye, “ready for the revolution.”