NATION Study predicts rise in minority buying power

Hispanics' buying muscle is expected to grow the most.
DALLAS MORNING NEWS
Minority buying power will more than triple from its 1990 level through 2008, illustrating the significant population growth, and, for blacks and Asians, their educational strides, according to a new study from the University of Georgia released Thursday.
Total buying power during this period -- which includes the longest economic expansion in U.S. history -- will increase about 148 percent, said the Selig Center for Economic Growth at the University of Georgia.
Most dramatic will be the rise in Hispanic buying power: 356 percent from its 1990 level through 2008. I
n the last three years, Hispanic buying power increased nearly 30 percent -- more than any other U.S. group.
"It is fairly remarkable growth and that has happened despite the fact that the economy hasn't been doing very well," said Jeffrey Humphreys, director of the Selig Center.
Comparison
Hispanics are the nation's largest minority, but their buying power is still lower than that of blacks.
In 2003, Hispanics have buying power of $653 billion, compared with $688 billion for blacks.
Hispanics make up about 14 percent of the population, and blacks make up slightly less, according to the U.S. Census Bureau.
Nor is Hispanic buying muscle equal to their numbers in the population.
In 2003, Hispanics control only about 8 percent of the nation's buying power. By 2008, Hispanic buying power will equal about 10 percent of the nation's projected $10.6 trillion in buying power.
Humphreys has done the buying-power study on the multicultural economy for more than a decade. Each year it gains more notice as the nation's minority populations grow, particularly in such states as Texas, California, New York and Florida, where minorities make up large swaths of society.
In the last three years, through 2003, Asian buying power grew at a clip nearly as fast as Hispanics, 28 percent.
Black buying power increased by nearly 18 percent, compared with an increase of 14 percent in non-Hispanic white buying power. American Indian buying power increased by 21.5 percent.
Here's why
The reasons behind the Hispanic buying power growth are favorable demographics, Humphreys said. Between 1990 and 2008, the Hispanic population will increase by 137 percent, compared with 13.7 percent for the non-Hispanic population and the 24.8 percent gain for the total population, the study said.
Hispanics also benefit from being relatively young as a group, meaning they are just hitting their prime consumer years, Humphreys said.
Blacks as well as Hispanics are four times more likely than others to start a new business, Humphreys noted. Blacks have education rates greater than those of Hispanics, whose large immigrant base brings down the total of those with high school educations.
That hasn't hurt Hispanic buying power much, though. "By 2005, Hispanic buying power will exceed that of African American buying power for the first time," Humphreys said.
"Within the next two years, Hispanic markets will become the nation's largest minority market, and that lead will widen with each passing year."