Solange Knowles and Usher Raymond are some celebrities that have transferred funds to banks founded by African-Americans along with music recording artist Killer Mike who helped gain 8,000 new customers at the Black-owned Citizens Trust Bank in Atlanta. Likewise, local activists have orchestrated boycotts of companies that have controversial ties with the Black community and have urged consumers to also open accounts at Black-owned banks, including locally owned Mt. Zion Credit Union. While these efforts can help build Black communities, the buying power statistics often supported by these movements can be misleading.
A study by Nielson and the National Newspaper Publishers Association projects African-Americans will have a buying power of $1.4 trillion by 2020.
The study notes that the term "African-Americans" is used synonymously with the term, "Blacks," while also stating the information is derived from 25 countries across the globe. Many outlets inaccurately claim the trillion dollar figure applies to only African-Americans who are Black Americans, but it actually applies to Blacks worldwide.
Jared Ball, a professor at Morgan State University who studies mass media statistics has found that he is the only professional to research how the buying power statistics are inaccurately stated, after speaking to numerous economists.
Ball says, "The phrase buying power is a marketing term created by PR firms and corporate marketing firms, specifically to address consumer purchasing power, which is not eco-
nomic strength. Consumer purchasing power is about what people choose to spend their money on out of the range of options that are made available to them."
The survey also states it is based solely on the spending habits of the individuals surveyed rather than income. It includes unpaid credit card debt and loans as a means to make purchases and does not account for money spent by households with government assistance to subsidize finances. In turn, this means the Black buying power numbers include funds borrowed from other races including banks and government entities.
Ball says, "Black households have (an average) credit card debt of about $6,000, which means Black Americans have (an average) credit card debt that is our median family household worth."
He continues, "So for them to turn it around and make it sound like we're sitting on a trillion dollars, and then we're turning around and foolishly spending it, well, that's ridiculous."
Ball is referring to media data derived from the U.S. Census Bureau stating median Black households have an average of $7,113 in wealth, which is 16 times less than median white households that hold $111,146 in wealth.
Furthermore, there are no studies or research to support the media's claims that money circulates in the Black community for six hours, white communities for 17 days, Jewish communities for 20 days, and Asian communities for a month.
With the misleading statistics behind the Black buying power, Ball encourages organizers of boycotts to research and strengthen their approach.
"There are no specific demands I've seen with boycotts. How long are we boycotting? What's the goal of a boycott? What are we trying to show with the boycott? If in 30 days to six months we're going to just go back and shop there, that's not going to hurt them."
Research shows African-Americans may not have the trillion dollar buying power that the media perceives them to have, but Ball says they do have the power to gain knowledge, which can help build better communities.