Newswise — Every racial and ethnic minority group in America is making financial gains but not at equal rates, according to the latest Multicultural Economy Report from the University of Georgia.
The annual report calculates the consumer buying power—or total income after taxes—for minority markets in the U.S.: African-Americans, Asian-Americans, Hispanics and Native Americans. The Multicultural Economy Report is published by the Selig Center for Economic Growth, a unit of UGA’s Terry College of Business.
The sustained growth of the U.S. economy culminated in an estimated $14.8 trillion of buying power nationally in 2018, an increase of 100 percent since 2000 and 30 percent since 2010, with the biggest percentage gains occurring in minority markets.
The combined buying power of blacks, Asian-Americans and Native Americans is estimated to be $2.4 trillion, while the nation’s Hispanics command $1.5 trillion in spending power—larger than the GDP of Australia.
“The economic expansion has been quite good in recent years, and we’re still seeing the benefits of that for every group in America,” said Jeff Humphreys, Selig Center director and author of the report. “While minority markets are certainly enjoying more buying power than ever before, the rate of growth differs. We find the largest percentage increases in the Asian and Hispanic markets, followed by relatively slower rates of growth in the African-American and Native American populations. Whites comprise the largest share of the U.S. market, but have the slowest percentage rate of buying power growth.”
While buying power is increasing across the country, the biggest gains come from Western states. The top 10 states with the largest percentage increase in total buying power since 2000 are Utah (156 percent), North Dakota (150 percent), Wyoming (143 percent), Texas (137 percent), Washington (131 percent), Arizona (131 percent), District of Columbia (130 percent), Montana (125 percent), Nevada (122 percent) and Idaho (118 percent).
The five slowest-growing states since 2000 are Michigan (57 percent), Illinois (71 percent), Ohio (74 percent), West Virginia (75 percent) and Missouri (76 percent).
Black buying power
African-American buying power has seen impressive gains since the end of the last economic downturn, jumping from $961 billion in 2010 to an estimated $1.3 trillion in 2018. Since 2000, the African-American market has seen a 114 percent increase in buying power.
The boost is the result of a surge in black-owned businesses, increased educational attainment and booming population growth. The percentage of African-Americans who completed college continues to rise (23 percent in 2017, up from 17 percent in 2000), and the population is growing at 22.7 percent since 2000, faster than the national average of 16.3 percent. The youthfulness of the African-American population skews the group’s buying power downward, as a larger share of the population have yet to hit their peak earning years.
The 10 states with greatest black buying power growth since 2000 are North Dakota (1,051 percent), South Dakota (502 percent), Idaho (375 percent), Wyoming (339 percent), Vermont (320 percent), Arizona (265 percent), Montana (255 percent), Maine (243 percent), Utah (235 percent) and New Hampshire (226 percent). All have flourishing African-American consumer markets, but none is among the nation’s 10 largest black consumer markets.
Native American buying power
Although comprising only 1.3 percent of the country’s population, the buying power of Native Americans is estimated to be $115 billion in 2018, a 185 percent increase since 2000. The gains are due in part to rapid population growth, which has increased 55 percent since 2000, and is projected to grow another 7 percent by 2023. Entrepreneurial activity also played a key role in boosting the Native American market. For example, American Indian- and Alaska native-owned businesses grew 15 percent from 2007 to 2012—five times more than the total number of all U.S. business growth.
Ranked by the growth of Native American buying power since 2000, the top 10 states are Texas (279 percent), Rhode Island (264 percent), Pennsylvania (247 percent), New York (241 percent), Maryland (234 percent), Massachusetts (233 percent), Illinois (230 percent), Virginia (228 percent), Delaware (225 percent) and Utah (224 percent). Many of these states have relatively small, flourishing markets, but Texas and New York stand out as the third- and fifth-largest Native American consumer markets in the nation, respectively.
Asian-American buying power
Asian-Americans command an estimated 6.2 percent of the nation’s total buying power, roughly $1 trillion. The 267 percent increase since 2000 makes the Asian market the fastest-growing minority market in the country, with a buying power greater than the gross domestic product of Turkey.
Indian Americans comprise the largest subgroup of the Asian-American market and account for $283 billion (28 percent) of the group’s buying power. Chinese-Americans (except Taiwanese) are second in terms of buying power, making up 23 percent of the U.S. Asian market ($233 billion) but are the largest population. Filipino-Americans constitute the third-largest group both in population and buying power, accounting for $146 billion or 14.4 percent of the market. The fifth most-populous group is Korean-Americans, who rank fourth in terms of buying power with $81 billion or 8 percent of the U.S. Asian market. Vietnamese-Americans are fifth in terms of buying power ($73 billion), but fourth in terms of population.
The Asian-American market is buoyed by booming population growth, which includes strong immigration, high educational attainment, increased entrepreneurship, and an overwhelmingly urban population.
Ranked by the rate of growth of Asian buying power since 2000, the top 10 states are: South Dakota (497 percent), North Dakota (479 percent), Arkansas (449 percent), Vermont (445 percent), North Carolina (422 percent), Texas (414 percent), Arizona (387 percent), Georgia (369 percent), Nevada (361 percent), and Indiana (357 percent).
While Texas is the only state that also ranks among the nation’s 10 largest Asian consumer markets (at third), Georgia (13th) and North Carolina (15th) are also among the nation’s most rapidly emerging Asian markets.
Hispanic buying power
The $1.5 trillion Hispanic market is the largest ethnic market in the U.S., and includes more than one out of every six Americans. It is the second-fastest growing minority market in the U.S., rising by 212 percent, or $500 billion, since 2000.
Mexican-Americans comprise the largest of the Hispanic subgroups, accounting for $881 billion in buying power or 57.2 percent of the Hispanic total. Puerto Ricans are second-largest group in terms of buying power, commanding $158 billion or 10.3 percent of the Hispanic market. Central Americans are the third largest, with a $137 billion market share or 8.9 percent of the total. South Americans rank fourth, with 8.7 percent ($135 billion) of the U.S. Hispanic market, and Cuban-Americans are fifth, accounting for $83 billion.
The 10 states with the greatest Hispanic buying power growth since 2000 are North Dakota (656 percent), South Dakota (513 percent), Arkansas (370 percent), South Carolina (368 percent), Tennessee (351 percent), Maryland (340 percent), Oklahoma (332 percent), Montana (330 percent), Pennsylvania (327 percent) and Kentucky (322 percent). Of those, only Pennsylvania (No.12), Maryland (No. 17) and Oklahoma (No. 24) are among the nation’s 25 largest Hispanic consumer markets in 2018.
The Selig Center for Economic Growth
Created to convey economic expertise to Georgia businesses and entrepreneurs, the Simon S. Selig Jr. Center for Economic Growth at the University of Georgia conducts research on economic, demographic and social issues related to Georgia’s current and future growth.
Through its range of projects—major economic impact studies, economic forecasts, information services and data products—the center’s efforts help inform business decisions and public policy directions. In doing so, the Selig Center has become the Terry College of Business’s most visible public service unit.