Economic statistics show a persistent and sometimes worsening wealth gap between black and white Americans, with the latest census figures showing that white families had about 16 times as much wealth as their black counterparts. Blacks also lag in household income, which averaged $32,038 last year compared to $50,400 for white families.
But those numbers obscure one bright spot for racial equality: what appears to be a rising African-American middle class. The Neilsen Company, the consumer research firm famous for its TV rating service, recently conducted a detailed analysis of black consumers, and found that the purchasing power of black Americans is growing by leaps and bounds.
Don Lowery, senior vice president of corporate reputation for Neilsen, said the company’s surveys showed that the demographic of African-American families with more than $75,000 a year in income was growing faster than any other group in the country. Overall, he said, blacks spend $1 trillion a year. “That’s a lot of economic power,” Lowery said. And it’s a power that businesses would be foolish to overlook.
Lowery will discuss the findings of this report at the African American Chamber of Commerce of New Jersey’s year-end dinner on Friday, December 11, from 6 to 9 p.m. at the Crowne Plaza Princeton. Tickets are $75, and $60 for members. Other speakers include John E. Harmon, CEO of the chamber, and Hosea Johnson, chairman of the board. For more information, visit www.aaccnj.com or call 609-571-1620.
The report focuses on the fast-growing group of affluent African-American consumers who are making their presence felt in the marketplace and the media. “Most people don’t really have that in their minds,” Lowery said. “The number of African-American households earning over $200,000 increased 138 percent last year. That was a pretty amazing finding,” Lowery said. The number of $200,000-plus income homes in the general population increased only 75 percent in the same time period.
Lowery believes that investment in African-American education is responsible for this increase in wealth. Today, more than 70 percent of black high school graduates go to college, which is ahead of both whites and the entire population at large. They are also entering science, technology, engineering, and mathematics-related professions in growing numbers. “Opportunities are coming to African-American communities that probably weren’t there before,” he said.
Lowery himself is an example of education paying off. He grew up on the south side of Chicago, the son of a railroad car chef and a nurse. A scholarship from the Better Chance program allowed him to go to private secondary schools and earn an economics degree at Wesleyan. He went on to a career in journalism, working his way up to a business reporting position at the Boston Globe. Later he was editorial director of WNEV-TV in Boston before leaving journalism to pursue public relations and business. He was a public finance investment banker for Lazard Freres and First Albany corporation and worked in PR for the New England Patriots in the 1990s and early 2000s. He joined Neilsen in 2004.
“Education is always a key to income growth,” Lowery said.
The report showed a number of trends in African-American consumers. Some of the income growth has been driven by immigrants, mostly from Caribbean countries, who now make up a sixth of the black population.
Of possible interest to marketers, the survey showed that black Americans were younger on average and listened to more music, watched more television, and engaged in social media at a higher rate than any other demographic group.
The data also highlighted the importance of food and family to African-Americans, who vote with their dollars and spend more than other groups on hosting large family gatherings for which they prepare their own food. “Food and family is at the heart of the African-American community,” Lowery said.
Lowery said marketing to these consumers would require a firsthand understanding of African-American culture. This is one way that companies would benefit from having a diverse leadership staff, Lowery said. It’s not just an issue of fairness: knowledge of different communities could help companies reach more consumers.
“This is clearly not a civil rights or social rights document, but it is a document that speaks to what everyone is trying to do in society, which is to live a good, fulfilling life with good economic opportunities for themselves and their families. As African-Americans have continued to grow on that path, if we present information like this it can get the market to understand and invest in African-American communities,” Lowery said.