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The Black Business Journal - Changing The Color Of Business(TM)
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Black Spending increases to $400 billion

By Clfff Edwards
Special to The Black Business Journal www.bbjonline.com

Highly educated black women helped drive a seven-percent jump in the spending power of African Americans during 1997 and into the new year. The annual study of wages and salaries by Chicago-based Target Market News found that black buying power increased to $392 billion in 1997, up from $367 billion in 1996, and suggested new areas where corporations can target their marketing.

Blacks continued to spend most of their money on housing and related charges, which totaled $104.8 billion, but the analysis of government data found the biggest purchasing gains in the areas of personal care products and Internet access. "Because the economy has been good for a few years now, black middle class families are feeling more confident about spending more on things they have put off for the last couple of years," said Ken Smikle, president of Target Marketing News. "There frankly are signs of splurging, spending on items for individual gratification." The study drew on interviews and diaries taken from 3,000 black households as part of an annual consumer spending survey by the Commerce Department. Spending on personal items jumped to $7.4 billion in 1997 from $4.4 billion a year earlier as black women with higher personal income treated themselves to hair salons, cosmetics, manicures and massages, Smikle said. Internet spending by African Americans jumped sixfold in 1997 to $60 million, the report said.

In the personal-care segment, black women spent 215 percent more than they did in 1996, and 60 percent more per capita than white women did in 1997. The findings reinforced previous findings that American women have been shrinking the wage gap as they attain higher education levels than men. In 1998, 54 percent of the people aged 20 to 29 who held bachelor's degrees were women. The degree is a significant factor in hiring for advanced technical jobs, according to the Census Bureau.

The bureau's data on income by educational attainment shows women in general earn only 73 percent compared with the median salary for men, but that figure rises to 82 percent for younger women who have bachelor's degrees. "When it comes to filling skilled positions in the future, employers will look toward the biggest and best educated pool of workers, which, as the data suggest, will be women," said John Challenger, chief executive of the employee outplacement firm Challenger, Gray & Christmas. "Women will increasingly gain stronger bargaining power, and that is when we will see salaries rise and the inevitable end to the glass ceiling." For black women, wages grew three percent in 1997, compared to six percent for white women, according to Target Market's analysis of Labor Department figures. But the number of black women entering the work force jumped four percent in the same period, compared to less than one percent for white women.

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