Black Spending Power: A Misguided Notion of Economic Power

ImageThis is the first in a series of articles about connecting Black consumers and entrepreneurs more effectively.


For several years, analysts have been tracking Black consumer spending as it approaches $1 Trillion, as if that is some magical milestone to reflect our economic clout.  However, the reality is that as Black spending has increased, Black wealth has been dropping.  It is NOT our spending that leads to economic empowerment. Better collaboration among Black entrepreneurs, professionals, and consumers is the answer. 
In an article at, Jeneba Ghatt writes:
"Just as this report shows we are spending more, a more recent report from the Urban Institute released in April reveals that the Black-White wealth gap has widened significantly over the past half decade.  It noted that in 2010, white families earned, on average, about $2 for every $1 that black families earned, a ratio that has been the same for the past 30 years.   And in terms of assets, cash savings, homes and retirement accounts, subtracted from debt like mortgages and credit cards, white families have six times the wealth.

And for all the spending we are doing, it's not necessarily going to help black businesses either."


The typical remedy is to exhort Blacks to spend more money with Black-owned businesses.  Here at, we have been advocates for Black economic empowerment for more than 10 years. And we are not alone.  So, what is the problem?  


The answer lies in enabling both Black consumers and entrepreneurs to connect the dots to act in our economic self-interests. What this means is that any "call to action" must be targeted to the segments where the spending occurs.  And Black business development must also target Black spending more discreetly. The overall spending reflects activity in what I refer to as "The Second Diaspora."  


Following the Civil Rights movement, African Americans experienced a second migration, similar to the northern migration in the 20th century away from the deep south to urban communities of the north in search of work and upward mobility.  Similarly, in the 60's, 70's and 80's a "second migration" occurred among Blacks -- away from urban centers to suburban communities.  This created new spending patterns for these newly upwardly mobile Black consumers.  Instead of most of their spending occurring in local Black communities, their spending became as scattered as the new housing patterns.


To reach Black consumers, it is necessary to find affinity patterns among the scattered Black consumers and reach these consumers in different ways.  The advent of the Internet has made tools available to reach the Second Diaspora, and build wealth among Black entrepreneurs who take advantage of new technology to compete more effectively for the increased spending of Black consumers.


I am proposing a comprehensive initiative to take advantage of this data, new technologies, and the rapid growth of Black entrepreneurs:



- an economic empowerment proposal 


The goals of this initiative are:

  1. Accelerate the economic success of high performance Black entrepreneurs and professionals who comprise the Second Diaspora through more collaborative efforts.
  2. Develop a pipeline of access and success for high performing young Blacks by providing business development assistance, mentoring, employment, and career options.
  3. Prepare a new generation of Blacks to compete and perform on the Global stage in every economic sphere - science, industry, education, and public service.
To achieve the goals of this initiative, we are proposing more collaborative efforts among Black entrepreneurs, professionals, and consumers to seek more effective ways to enhance the economic achievement of African Americans individually and collectively.  
In upcoming articles, I will discuss "The Second Diaspora Target Audience" and "Mobilizing the Virtual Black Community."


Roger Madison, CEO

iZania, LLC