Report cites population growth, entrepreneurship for economic gains
Minnesota is one of 10 states in the U.S. that have shown the greatest growth of Black buying power since 1990, a University of Georgia economic report says.
According to an annual report by the Selig Center for Economic Growth at the University of Georgia’s Terry College of Business, although Minnesota did not make the top-10 list for states with the largest African American market, it did make the top-10 list for the largest buying power rate of growth during 1990-2006: Nevada (449 percent), Idaho (434 percent), Utah (386 percent), Montana (368 percent), Minnesota (354 percent), South Dakota (313 percent), Arizona (294 percent), Maine (294 percent), Vermont (289 percent) and Wyoming (251 percent).
The Selig Center 2007 report includes state-by-state projections of buying power for the country as well as for Blacks, Asians, Native Americans and Hispanics.
Buying power is not used as a measurement of wealth. It is defined as the total personal income an individual has available after taxes for spending on virtually everything that they buy.
The economic think tank determines its estimates and projections by applying economic modeling and forecasting techniques to data from various U.S. government sources. Despite the large population disparity between Whites and persons of color in Minnesota, the state ranks fifth in percentage increase of Black (354.2 percent) and Asian (486.5 percent) buying power, and eighth in Hispanic buying power.
Jeff Humphreys, director of the Selig Center and the report’s author, reported in August that U.S. Black buying power will total $845 billion in 2007 and is projected to top $1.1 trillion by 2012. Furthermore, the share of buying power controlled by Black consumers will rise in 47 states, including Minnesota. Mississippi (24.3 percent), Maryland (22.2 percent) and Georgia (20.8 percent) will show the largest market share increases, along with the Distinct of Columbia (30.6 percent).
By 2011, the combined buying power of Blacks, Asians and Native Americans nationwide will be $1.8 trillion – nearly quadruple its 1990 level of $454 billion, a gain of $1.3 trillion or 289 percent, the Selig report continued. The combined buying power of these three ethnic groups will account for 14.3 percent of the U.S. total buying power in four years.
The center reported that the U.S. Black buying power has risen from $318 billion in 1990, to $590 billion in 2000, to $799 billion last year, and will rise to $1.1 trillion in 2011 – a 237 percent increase in 22 years.
The report points out that Blacks spent a larger percentage of their income on natural gas, electricity, telephone services, and footwear, and a higher proportion of their money on groceries, housing and women’s and girls’ clothing than others.
Also, according to the report, Black consumers account for almost nine cents out of every U.S. dollar spent.
Humphreys also examined demographic data: The nation’s Black population will grow almost 34 percent by 2011, compared to 18.5 percent for Whites and 25.4 percent for the total U.S. population.
The gains in Black buying power reflect more than just population growth and consumer inflation, Humphreys said. He also pointed to the increasing number of Blacks starting their own businesses. Using U.S. Census data, Humphreys reported that the number of Black-owned businesses increased 45 percent from 1997 to 2002, exceeding the 10 percent increase in U.S. businesses overall.
The Selig Center report concluded that as the U.S. consumer market continues to grow more diverse, advertising, products and media must be tailored to meet each ethnic consumer market. The organization, which was established in 1990, makes their report available to businesses and the public.
Editor's Note: According to an annual report by the Selig Center for Economic Growth buying power is defined as the total personal income an individual has available after taxes.
To read the entire report, go to the Selig Center’s Web site at www.selig.uga.edu.
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