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Shopping While Black: Is Conspicuous Consumption Related to Black-White Wealth Gap?

Written by Les Leopold on 04 November 2013.

Trayon Christian was racially profiled while buying a $250 belt at Barneys. Kayla Phillips was accosted by police after buying a $2,500 handbag from the same store [3]. Their treatment is unacceptable. Racial profiling is wrong—it is also ineffective in preventing crime. Al Sharpton is correct in his efforts to defend the basic rights [4] of people to be treated equally and fairly while shopping, regardless of their skin color.
 
The United States has been described as a “consumer’s republic.” Capitalism, democracy, and the right to participate in the marketplace are conflated with full citizenship in this country. The phenomenon that has come to be known as “shopping while black,” reinforces, through racism and classism, a belief that people of color are perpetual outsiders and a type of Other in American society.
 
However, in locating the experience of shopping while black within a broader social, historical and political context, we must also confront an uncomfortable and challenging question.
 
Of course, Christian and Phillips should not have been discriminated against because they were black while shopping at a luxury store. But, what do the choices of two young people to spend hundreds of dollars on a belt and thousands of dollars on a handbag, reveal about the impact of conspicuous consumption on the black community’s economic health?
 
Blacks in the United States possess significantly less wealth and earnings [5] than their white counterparts across all class levels. African Americans possess approximately 10 cents for every $2 owned by whites. Black women in the 36- to 49-year-old age range [6] have a net worth of $5. White women in the same cohort have a net worth of 40,000.
 
These wealth disparities are a result of centuries of public policy in the United States in which white wealth creation was subsidized by the state, while economic resources and opportunities were systematically denied to people of color. The Homestead Act, the FHA and VA home loan programs, as well as the G.I. Bill, created untold billions of dollars in wealth [7] for white people while non-whites were denied access to the same opportunities.
 
Because of discrimination in the labor market, black Americans do not receive the same return of investment on their educations as comparably, or even in some cases, less-educated, whites. Even ostensibly “race-neutral” polices such as “last hired, first fired” have caused disproportionate harm to people of color, as they have long been denied access to jobs by racist hiring practices. Yet, black and brown workers are the first to be dismissed when the economy contracts.
 
Systematic housing segregation means that black communities are also less resourced as compared to comparable white communities.
 
Three centuries of chattel slavery robbed [8] African Americans of at least $20 trillion of labor and income [9]. Wealth is intergenerational. The sum effect of centuries of economic disenfranchisement is that the black community is both wealth- and income-poor.
 
America’s system of racial apartheid was also an active form of economic exploitation against non-whites. African Americans who choose to purchase $350 belts and $2,500 handbags are not responsible for the structural inequalities which have produced the stunning lack of wealth held by black America. However, such aggregate choices by individual African Americans contribute to the racial wealth gap because each dollar put into overpriced clothing, cars, jewelry, electronic goods, etc. are fewer resources put into savings and investment [10].
 
Why would members of a group that is poor in wealth, and comparatively disadvantaged in terms of income, spend their resources on expensive consumer goods as opposed to investment or saving?
 
America is a hyper-consumerist society. Few if any of its members are immune from consumerism, or the psychic and emotional rewards that come from shopping. Nevertheless, we can try to detail the particular dynamics that influence how members of a given group choose to spend their money.
 
Consumer behavior [10] is a type of signaling game. Poor people are in competition with other poor people in their community for prestige. Likewise, middle-class and rich people also participate in an economic signaling game with their peers. However, poor people are not competing with rich people because they do not have the resources to do so. A poor black single mother in a ghetto underclass community may think spending hundreds of dollars on a toddler’s sneakers and jeans is perfectly rational behavior. A middle-aged black working-class man may judge it rational to spend $600 a month to lease a luxury car, even when he does not own his own home. Neither of them can reasonably compete with a rich person who signals success to his peers by expanding his home and land, buying expensive art, or investing in the stock market.
 
America’s racial apartheid has had a profound impact on the black community's economic behavior.
 
Historically, African Americans have been victims of white racial terrorism which was focused on destroying symbols of black prosperity. (See: Tulsa, Oklahoma, otherwise known as the "black Wall Street.”) They faced discrimination in the labor market through Jim and Jane Crow; blacks have been punished, through violence, by whites daring to accrue wealth. The sum effect is that consumer goods have come to be seen by no small number of black Americans as a type of “investment."
 
A new car, expensive clothes and jewelry, or electronics are portable and visible. These goods and practices signal a sense of one’s material success and value to their peers, and perhaps even to a broader white society that devalues the personhood of black and brown people. Unfortunately, the black community’s participation in this economic signaling game comes at a steep price.
 
According to data from the Nielsen Foundation and the National Newspaper Publishing Association [11], black Americans spend approximately $1 trillion a year, and 99.5 percent of this money immediately leaves the black community. By comparison, a dollar spent by an Asian American in her community will circulate 9.5 times before it goes to a member of another racial group. A dollar spent within the white community will circulate eight times before it exits.
 
Black Americans are the most affluent members of the Black Diaspora. If black Americans were a country, they would rank 16th in the world in terms of GDP [12]. Black Americans also have the most spending power [13] of any group in the United States; they are a money pump for the country’s economy while possessing very little of its wealth.
 
Concerns about the spending patterns and habits of the black poor—and the black community in general—have been central to the politics of “black respectability” from the 19th century to the present.
 
Much of what has been described by its critics as the “class policing” of the black poor and lower classes by black elites, operates from an assumption that the former lack impulse control, and are focused on short-term thinking, as opposed to the long-term decision-making which is synonymous with self-control, civic virtue, and a "proper" American and middle-class identity.
 
This narrative is important and should be acknowledged [14]. However, I would still suggest that African-American leaders need to develop an agenda centered on entrepreneurship and wealth creation. Part of this plan should involve a discussion of the economic harm done to the black community by conspicuous consumption and wasteful spending in the post-civil rights era.
 
“Shopping while black” is an affront and an insult; however, it is a comparatively minor social justice challenge when compared to the racial wealth gap in the United States. If the civil rights establishment wants to remain relevant, its efforts should be focused more on the second problem, and much less on the first.
 
I am sorry that Trayon Christian and Kayla Phillips were harassed while spending hundreds and thousands of dollars respectively, on a belt and a handbag. As an African American who has been racially profiled while shopping, driving, boarding airplanes, and walking down the street, I can most certainly empathize with their experience and hurt.
 
I hope that Trayon Christian and Kayla Phillips learn from their experience of “shopping while black,” and put their money that would otherwise be spent on luxury goods into the bank, the stock market, or some other type of financial instrument or entrepreneurial project that will accrue and grow wealth.
 
The Civil Rights Movement had a powerful slogan: "Don't shop where you can't work." In the age of Obama, a corollary should be added to that rule: black folks should stop spending so much money on shopping, and start saving and investing instead.
 
 
Stories by Les Leopold
 
Les Leopold is the executive director of the Labor Institute in New York, and author of How to Make a Million Dollars an Hour: Why Hedge Funds Get Away with Siphoning Off America's Wealth (J. Wiley and Sons, 2013).  subscribe to Les Leopold's feed
 

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