Sunday, January 27, 2002
More blacks are driving economy
Forming, expanding businesses spark buying power
By John Eckberg
The Cincinnati Enquirer
Bolstered by an economic expansion through the 1990s, a new generation of African-American wealth is reshaping and reinvigorating the Tristate.
From the radio dial to the factory floor, the boardroom to the lunch meeting, newfound affluence of African-Americans is bringing newfound influence in Greater Cincinnati. Local examples and profiles of business owners and professionals from a number of disciplines accompany this report.
New business formation is a driver behind the newfound wealth.
"A key part of the black labor-market experience is a tendency in recent years to move out and start a business of their own," said Nancy Bertaux, professor of economics and human resources for Xavier University.
"It's probably from frustration with a perceived inability to get ahead. But clearly it's paying off for some."
The story is mirrored on the national stage.
The latest figures from the U.S. Census Bureau show that in 2000, the median household income for African-Americans was $30,400 -- the highest ever.
Though that median income still trailed the median income of whitehouseholds -- pegged at $45,900 -- African-American households had the greatest upswing from 1999 to 2000 with a 5.5 percent rate of income growth.
The Selig Center for Economic Growth at the University of Georgia sees even more evidence of wealth generation in recent years.
The center projects that the national buying power of blacks from 1990 to 2001 grew by 85.9 percent. By comparison, white buying power grew by 67 percent. (Both were outstripped by the 125 percent growth in Asian buying power.)
The center confirmed Ms. Bertaux's assessment that an increasing number of blacks who started or expanded their business contributed mightily to the increase in buying power.
And more studies have reached similar conclusions.
A review of the national African-American market last month by Marketresearch.com found that between 1980 and 2000, blacks experienced a 59 percent gain in income. The population as a whole gained 43 percent.
In other words, some blacks are getting richer and doing it faster than the general population.
The dramatic increase in the number of African-Americans entering college after the civil-rights struggles of the 1960s has led to an exponential wave of prosperity just now being felt.
"We are seeing a second generation of young people who have the opportunity to go to college -- that, without a doubt, is a major factor," said Joyce Ladner, senior fellow in the governmental studies program at Brookings Institution in Washington D.C.
Still, says merchant banker Richard O. Coleman, a Cincinnati native and resident, there is plenty of room for growth. Blacks, as a whole, have a longer path to walk on that road to equity.
"I do see more and more African-Americans working for major corporations, going up the ladder," Mr. Coleman said. "They have pretty nice titles and are in the executive ranks."
The new generation may take a different route, Ms. Ladner predicted. A former academic vice president at Howard University in Washington D.C., Ms. Ladner was surprised a decade ago by the business-creation fervor of a new generation.
"I saw the freshman class come into business school and how they didn't want to be trained to work at a corporation," she said. "But they came in instead with entrepreneurial ideas about how to start their own business."
Ron DeLyons: Boyhood success gave hint of future
Lisa Rowell: 'People must strive for excellence'
Wayne Miller: Buzz good on sports talk radio
Pat Simmons: Alliance more than networking
Richard Coleman: VP taking Onyx to the crest
Roy Mitchell: CPA stresses education
Stephen Bailey: His goal: Keep America working
More blacks are driving economy
Enquirer to examine personal finance
Airport parking going up March 1
Local firm designs anthrax detector
Former coach puts sport into awards
Tristate Business Notes
Business meetings and seminars
Commercial real estate projects & transfers
Cell phones numbers may soon be portable
Contractor status can be benefit
Enron isn't only firm to seek help from government
Gramms deny culpability in Enron ties
State of economy worrisome, but recovery in offing