Where is our money going?
Despite only composing 13.4% of the population, the Black community had a buying power of over $1.4 trillion dollars in 2019. With only 2% of that trillion dollar figure circulating back to the Black community, we must examine where the other 98% of the Black-dollar goes and how we can redirect its course, so that we benefit from our own spending.
From a historical perspective, European Americans were able to build wealth and capital through land procurement and economic racism. The undermining of the Freedmen’s Bureau, deliberate destruction of Black property, and implementation of anti-black systems and policies actively disenfranchised African Americans. The disenfranchisement of African Americans laid the foundation for what is known today as the racial wealth gap. To dissemble the anti-black infrastructure and erode the financial impact of economic racist will take both time and deliberate action. But, with capital being the base of power for all communities, shrinking from this responsibility is not an option. The development of Black business is a step in the right direction; however, must understand that the simply owning a business does not equate to profitability or buying power.
According to the U.S Census Bureau’s survey of Business owners (SBO), there are more than 2.5 million black-owned businesses in the United States. Of which, less than 10% employ someone other than the owner. Additionally, 67.3% generate annual sales less than $25,000, leaving many business owners with profit just above the poverty lines. That is, out of 2.5 million black business owners, 1.5 million would be considered impoverished, if, their business earnings were their only source of income. To fully understand this enigma, we must examine where the Black-dollar goes.
Here are a few numbers: 52% of black consumers find the physical shopping experience to be relaxing, in comparison to just 26% of the total population. Black consumers are 20% more likely than any other race to pay extra for a product that is “consistent with the image I want to convey.” Black consumers are more likely to try a new product for the sake of variety and novelty (30%), purchase trendy items (33%), be among the first to try new products and services (40%), be impacted by in-store advertisements and merchandising, and be influenced by celebrity endorsements (51%).
Understanding that money equals influence is key to advocating for the importance of patronizing Black-owned businesses and services. What you buy, why you buy, and where you buy strongly impacts society. “Little Africa” in Tulsa, Oklahoma and Parrish Street in Durham, North Carolina, are two historical sites, that illustrated the power of buying Black. It has been said that within the predominately Black, Greenwood district of Tulsa, each dollar spent would change hands 19 times before it ever left the community. Some evidence states that this figure was even higher, with some speculating that the Black-dollar would circulate 36 to 100 times before ever leaving. What is even more impressive, is that on average the Black-dollar would remain in the Greenwood district for at least a year. Circulating the Black-dollar in the black community for longer periods of time, results in more successful businesses, more employment opportunities, lower unemployment figures, greater homeownership, and higher academic achievements.
Maggie Anderson, in her book Our Black Year, One Family’s Quest to Buy Black in America’s Racially Divided Economy, stated that if the Black middle-class increased the circulation of the Black-dollar to the Black community from 2% to 10%, we would see 1 million new jobs.
Black consumers and their allies can invest in the Black community by both buying Black and strategically spending with corporations who employ and assist in the development of Black professionals. Tools such as our website and the Black Dollar Index, which is a multi-factor scoring system that rates top consumer-facing corporations on critical factors for racial equity, can be used to find businesses who support these ideals.
By committing to tactical spending, Black-consumers can see the impact of their decision to Buy-Black and patronize socially conscious businesses. Do not know where to start? Head back to Ourblex.com to find Black-owned and Allied businesses near you. Our support, grow, and build model as well as our give-back program, demonstrates our commitment to our web-users, our community, and our mission.