INCREA$INGLY, MINORITY MARKET$ FIND THEIR WAY TO BUYING POWER DOLLAR$

EXECUTIVE SUMMARY

  • The US’s population has increasingly become more diverse. In 1950 racial diversity was 4% of the population while Hispanic ethnic diversity was ONLY 2.1%
  • By 2018 racial diversity will be 6% with Hispanic ethnic diversity being an astounding 19.1% WOW!
  • While the aforementioned population diversity is remarkable, the growth of BUYING POWER (BP) diversity by American minorities is truly spectacular.
    • The avg yrly growth for WHITE BP b/t 2000-2013………..5%
    • The avg yrly growth for BLK BP b/t 2000-2013…………….7%
    • The avg yrly growth for AM INDIAN BP b/t 2000-2013…. 0%
    • The avg yrly growth for HISPANIC BP b/t 2000-2013…….1%
    • The avg yrly growth for ASIAN BP b/t 2000-2013………… 4%
    • The avg yrly growth for MULTIRACIAL BP b/t 2000-2013 4%
    • WOW! WOW!!WOW!!!WOW!!!!WOW!!!!!
  • W/O trying to attribute causality we nevertheless want to help explain BP growth where we found it. We humbly therefor offer college degree rates for our listed market segments
    • HISPANIC — 6%
    • AM INDNSa0%
    • BLACKS ——6%
    • WHITES —–3%
    • ASIANS ——7%____________
      • Am Indians &Native Alaskans

With Black History Mo (Feb) in our rear view mirror, Asian Pacific Heritage Mo (May), Hispanic Heritage Mo (mid Sept to mid Oct) and Native American Indian & Alaskan Heritage Mo (Nov) are straight ahead. Given that, we have decided to prove that America is NOT that Great Melting/Smelting Pot. Instead it is a well-organized system of super segments or a pattern of puzzle pieces with each segment/puzzle piece robusting with population and BUYING POWER, growth.

As of 1950 the US’s population was blessed with a racial diversity of 10.4% and a Hispanic ethnic diversity of 2.1%. By 1975 our racial diversity was 13.2%± with a Hispanic diversity of 5.4%±(US Census Bureau). 2000 brought us diversities of 19.1% and 12.6%, respectively (See Table 1.) By 2018, the Multicultural Economy by Jim Humphreys (from the Selig Center at U of Georgia) predicted a racial diversity of 23.6% and a Hispanic diversity of 19.1% (See Table 1.) It is unlikely that Geo Washington crossing the Delaware, our Founding Fathers, Martin Luther King or even Alejandro Iñárritu (Director: Birdman) could have ever, ever envisioned such a “land of diverse opportunity”. (Mr Iñárritu would actually have to become silent and look at the forthcoming data!) With that said T2 & 3 complete our diversity puzzle. T-2 speaks to the growth of those various population puzzle pieces from 2000 to ‘18’s projection. T-3 transitions from population diversity to BUYING POWER diversity and its growth among America’s minorities. T-2 & T-3 they detail America’s diverse population segments as they increasingly share in the “American Dream” of our vast BUYING POWER.

T-1: US Population by % of Minorities, 2000-2018 (Selig Center)
2000 2013 2018
Total 100.0% 100.0% 100.0%
White 81.0% 77.7% 76.4%
Blk 12.7% 13.1% 13.3%
Asian 4.0% 5.4% 6.0%
Multiracial 1.4% 2.5% 3.0%
Am Ind 1.0% 1.2% 1.3%
HSP 12.6% 17.4% 19.1%
T-2: US Population (in Millions) Data & Growth (Selig Center)
2000 2013 2018 2000-2013 Δ% 2013-2018 Δ% 2000-2018 Δ%
Total 282.162 316.904 331.204 12% 5% 17%
White 228.53 246.155 253.138 8% 3% 11%
Blk 35.815 41.666 44.111 16% 6% 23%
Asian 11.173 17.191 19.76 54% 15% 77%
Multiracial 3.96 7.961 9.954 101% 25% 151%
Am Ind 2.684 3.931 4.241 46% 8% 58%
HSP 35.662 55.01 63.342 54% 15% 78%
T-3: Buying Power (Billions of Dollars) 2000-2018 by Racial, Ethnic Group & % Growth (Selig Center)
2,000 % Tot 2,013 % Tot 2,018 % Tot 2000-2013 Δ% 2013-2018 Δ% 2000-2018 Δ%
Total 7,324 100% 12,418 100% 15,194 100% 70% 22% 107%
White 6,353 87% 10,377 84% 12,539 83% 63% 21% 97%
Black 601 8% 1,071 9% 1,333 9% 78% 24% 122%
Asian 275 4% 713 6% 962 6% 159% 35% 250%
Multiracial 59 1% 161 1% 237 2% 173% 47% 302%
Am Indian 40 1% 96 1% 123 1% 140% 28% 208%
HSP 491 7% 1,189 10% 1,608 11% 142% 35% 299%

Table 3 gives us a very clear vision of our nation’s diversity regarding BUYING POWER (BP) & its growth. Of note is the fact that by 2013 both Black ($1.1 T) and Hispanic buyers ($1.2 T) had become members of the $1T BUYING POWER club. By 2018 also, Asians will be knocking on that door ($962 M) or will have already become club members. By comparing population & BUYING POWER stats for 2013, we learn that ONLY 2 segments have BUYING POWER %s greater than their population %s, the White and Asian segments.

Beyond the Trillion dollar club, the real story of T-3 however, is the amazing growth of BP among minorities. T-3 shows that the overall US growth of BP was 70% (or an avg of 5% per yr) from 2000 – 2013 and that the ONLY segment that had lost growth % was the White segment. On the other hand the fastest growing BP clearly came from that small % of Multiracial consumers (2.5% of the 2013 population) who had a phenomenal growth of 173% (or an avg of 12.4% per yr). While the Multiracial population is a very small % of the US population, it is growing quickly. B/T 2000-13, the Asians’ BP growth % avged 11.4% per yr. #3 in order of BP growth % is the Hispanics with an avg growth of 10.1% per yr. Blacks avg’d 5.6% growth with Whites BP growing at an avg of 4.5% per yr from 2000-13.

While we don’t pretend to answer the question of WHY one segment’s BP is greater than another, we can’t help but look to EDUCATION as at least a partial answer. According to the 2012 US Stat Abstract (quoting 2009 data) the % of population with at least a bachelor’s degree was 27.9%. Whites (alone) had a 29.3%; Blacks (alone) 17.6%, American Indian & Alaskan Natives (alone) a 13.0% with Hispanics (alone) being 12.6%. Finally, Asians (alone) had an incredible bachelor’s degree % of 49.7%. WOW! ANYQUESTIONS?

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About bernacmd

For over 24 years, University of Detroit Mercy Marketing Professor Michael Bernacchi, Ph.D., J.D, has produced "uNDER tHE mIKE-rOSCOPE", a newsletter discussing current "marketing and advertising¹s bends, trends & ends." A well-know fixture in Detroit and national media, UDM's marketing guru has made several appearances on CNN's "Talk Back Live," the Voice of America worldwide radio network (VOA), ABC, CBS, NBC, MSNBC and on the pages of Sports Illustrated, Time, TV Guide, the New York Times, USA Today, the Wall Street Journal and the Washington Post, to name a few. At University of Detroit Mercy, he has taught courses in Marketing Management, Consumer Behavior, Marketing Communications, Research and Corporate Social Responsibility and Sports and Entertainment Marketing. Michael Bernacchi can be reached at 313-993-1116 or bernacmd@udmercy.edu. Please appropriately attribute the following for their work on uNDER tHE mIKE-rOSCOPE: Yen Ju Lee Robert Rouse Vidhyasagar Natarajan Eric Baumgardner & Ian Young
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