While every demographic in the U.S. economy is making gains, Asian-Americans are leading the charge, 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 several racial and ethnic groups in the U.S.: African-Americans, Asian-Americans, Hispanics, Native Americans and whites. Published by the Selig Center for Economic Growth, a unit of UGA’s Terry College of Business, the Multicultural Economy report is available for purchase here.
The Selig Center estimates U.S. consumer buying power totaled $14.6 trillion in 2017, an increase of 97 percent since 2000 and 30 percent since 2010, with the biggest gains among 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.
All minority consumer markets have grown faster than the buying power of whites since 2000, but the biggest increase came from Asian-Americans. Their estimated buying power totaled $986 billion in 2017, an increase of $709 billion, or 257 percent, since the turn of the century.
“The percentages tell the story,” said Jeff Humphreys, director of the Selig Center and author of the report. “While there are lots of groups that are making big gains, the percentage increase in the Asian-American market is quite a bit larger. It’s an indication that this market has been a bit underserved, and marketers and businesses are making up for it.”
At 257 percent, the Asian-American rate of growth compares with 203 percent for U.S. Hispanics, 180 percent for Native Americans, 108 percent for African-Americans and 87 percent for whites during the same period.
The report also breaks down spending data by area. For example, the top 10 states and territories ranked by the percentage increase in total buying power for all races since 2000 are: North Dakota (158 percent), Utah (146 percent), Wyoming (140 percent), Texas (140 percent), Oklahoma (132 percent), District of Columbia (124 percent), Arizona (122 percent), Washington (118 percent), Idaho (117 percent) and Montana (116 percent).
Asian-American Buying Power
Just over 20 million Asian-Americans, including Native Hawaiians and Pacific Islanders, represent 6.1 percent of the U.S. population. The group’s buying power of $986 billion is larger than the annual economic output of all but 16 countries, and falls just shy of Mexico’s GDP. The report predicts the market’s speedy pace will continue in the near term, reaching $1.3 trillion in 2022.
The report also provides data on 17 subgroups of U.S. Asian consumers, such as Chinese, Indians and Filipinos. The market’s diversity is both a strength and a challenge, Humphreys said.
“The Asian market is partially underserved because it’s less unified than some of the other groups and has many different languages and customs, comparatively,” he said. “That makes it harder for marketers to craft a one-size-fits-all advertisement, but makes a great opportunity for more niche targeting.”
The Asian-American market is bolstered by rapid population growth and employment gains. From January 2000 to March 2017, the number of jobs held by Asian-Americans increased by 3.6 million, or 63 percent. The population also benefits from high educational attainment and a marked increase in Asian-American business startups.
Hispanic Buying Power
The Hispanic market is the largest minority market in the U.S. and continues to expand. The group’s economic clout has increased by $500 billion, or 203 percent, since 2000, making it the second-fastest growing U.S. consumer market.
Propelled by an increase in Hispanic-owned businesses, immigration and population growth, the U.S. Hispanic market also benefits from striking employment gains. The number of jobs held by U.S. Hispanics increased 66 percent from January 2000 to March 2017.
The total share of U.S. buying power controlled by Hispanic consumers stood at 10.3 percent in 2017 and is expected to rise to 11.1 percent by 2022. While the Hispanic market has traditionally been concentrated in border states, the group’s increased economic clout is expected to rise in every state.
Black Buying Power
African-American buying power reached $1.3 trillion in 2017, accounting for 8.7 percent of the U.S. total, according to the report. Humphreys attributed the 108 percent growth rate since 2000 to increased entrepreneurial activity, strong population growth and higher educational attainment.
The African-American population skews youthful, with a median age of 31.4 years that is lower than the national average of 36.7 years. Humphreys said black buying power should edge up as the average demographic enters higher earning years.
The 10 states with the largest African-American consumer markets in 2017 are Texas ($117 billion), New York ($116billion), California ($93 billion), Florida($90 billion), Georgia ($90 billion), Maryland ($72 billion), North Carolina ($60 billion), Virginia ($54 billion), Illinois ($52 billion) and New Jersey ($46 billion).
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 is primarily responsible for conducting 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.