Blackonomics: The Cost of Not Doing Business

By James Clingman
NNPA Columnist

Over the past few decades Black people have been led to believe that we have “power” because we earn and spend so much money in the marketplace, now having eclipsed the $1 trillion mark. As the most studied consumer segment in the world, Black Americans are touted by dozens of studies as the most brand loyal and the biggest spenders, especially on specific goods and services such as fast foods, movies, cellphones, hair and skin care, and sweetened drinks, just to name a few. Is that power?  Well, it is for those on the receiving end of those dollars, but not so for Black consumers.  It’s more akin to a weakness.

You have heard the term, “The cost of doing business,” which means that folks in business have certain costs that come with the territory. Some characterize it by saying, “It takes money to make money.”  Agreed, of course; but how much money does it take for businesses that Black consumers support to make more money?  What is their cost of doing business within the Black consumer segment? The answer: little or nothing. They get our money with little effort or reciprocity.

So why do studies always point out that we have power in the marketplace?  Black spending power, Black purchasing power, and the power of the Black consumer are all phrases that are utilized by researchers who point to our billions in consumption spending.  The emphasis should be on the word “power.”  Are we powerful simply because we spend a lot of money?

Power has many definitions, the most comprehensive list of which is noted by Amos Wilson, in his seminal work, Blueprint for Black Power. In a general sense, according Rollo May, as quoted by Wilson, power is, “…the ability to cause or prevent change.”  The application of that definition of power to Black consumers falls short, however, because of the word “ability.”  How do you know if you have the ability to do anything until you actually put that ability into action?  It’s much like another word we like to apply to Black folks: “potential.”  The only way we really know we have potential is to utilize it—or do away with it, as I like to say.

Batteries hanging on a rack in a store are believed to have power, but the purchaser will never know if that’s true until those batteries are put to use.  Likewise, all the power that researchers say Black consumers have will never be seen or felt until we exercise it. Until we change our consumption habits we will never have true power; instead we will only have the illusion of power. Influence, yes, but never power.

So we must change the phrase, “The cost of doing business” to a new phrase, “The cost of not doing business.”  As consumers, and voters, we are largely taken for granted.  Our dollars continue to flow outward and continue to empower everyone except ourselves. Our votes are always on parade, as is the case now with the upcoming elections, but with no reciprocity. How can we even think we have power?

A paradigm shift to the cost of not doing business would cause an enormous change in how things are done in his nation and their effect on the lives of Black people. Moving from business as usual to “business unusual” would send a strong signal that Black consumers are tired of being the profit margins for companies that fail to respond appropriately to our brand loyalty. It would cause the CEO’s and board members of those firms to step up and speak up on our behalf.

When the cost of doing business rises, the producer simply raises prices or hands out pink slips.  When the cost of Black consumers not doing business hits those company balance sheets and cash flow statements, the 2 percent or so they currently spend on Black advertising will rise. The meager sums of ad dollars currently being spent with Black newspapers and magazines will explode. And the amount spent with conscious and conscientious Black broadcast media will also increase.

Understand that reciprocity works in a variety of ways. Those Black media firms that reap the benefits of Blacks not doing business must reciprocate by circulating some of their newfound wealth to other Black businesses, and they must make drastic improvements in their programming to Black audiences.

Media is certainly not the only category to leverage reciprocity.  Issues of injustice, discrimination, and disparities can all be addressed within the context of not doing business with a targeted group of corporations until they appropriately respond to Eric Garner, Michael Brown, et al.

If we want real power, pursuing a “cost of not doing business” strategy is one way to obtain it.

Jim Clingman, founder of the Greater Cincinnati African American Chamber of Commerce, is the nation’s most prolific writer on economic empowerment for Black people. He is an adjunct professor at the University of Cincinnati and can be reached through his Web site, Blackonomics.com. 

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