As we approach the holiday season, consumers have a unique opportunity to support Black businesses when shopping for gifts. If we choose to spend our hard-earned dollars by “Buying Black,” we not only bring joy to our loved ones, but contribute to growing Black wealth and prosperity.
The fourth principle of Kwanzaa, celebrated at the end of December, is Ujamaa, Cooperative Economics. It emphasizes building and maintaining our own stores, shops and other businesses and profiting from them together. What better way to fulfill this principle and teach the next generation of its value by supporting Black businesses with our holiday shopping?
Combined spending by all Black households has increased 5% annually over the past two decades, outpacing the 3% growth rate of white household spending, driven mostly by faster population growth.
The holiday season is the most important time of year for Black consumers to spend money in their community, which strengthens Black-owned businesses, provides jobs to people in the community, and creates a cycle of prosperity that can contribute to countering the effects of centuries of systemic racism.
And if Black consumers direct their increasing purchasing power to businesses owned by Black people, we will contribute to their continuing growth. In 2020, there were an estimated 140,918 U.S. firms with majority Black or African American ownership, up 14% from 124,004 in 2017, according to the Census Bureau’s Annual Business Survey. These businesses generated an estimated $141.1 billion in gross revenue in 2020, an 11% increase since 2017.
But despite this growth, businesses majority-owned by Black people accounted for only 3% of all U.S. firms and 1% of gross revenue of businesses that were classifiable by the race and ethnicity of their owners in 2020. Black adults were 12.4% of the U.S. population in 2020, according to the Census Bureau.
As well, Black business owners still face racism both in obtaining capital to grow their companies and attracting the customers they need for their enterprises to thrive. According to a survey conducted earlier this year by Intuit Quickbooks, 79% of Black business owners say they have experienced racism from a customer, 82% of Black business owners say they behave differently in customer and vendor interactions to avoid negative racial stereotypes, 57% of Black business owners say they were denied a bank loan at least once compared to 37% of non-Black business owners, and spend on average $21,000 to start their businesses compared to $16,000 for their non-Black counterparts.
Buying Black can also address the desires of Black consumers that are often ignored or overlooked by mainstream companies. Black business owners can attract gift-shoppers by filling in those gaps, both keeping Black dollars in the community and creating the sense among Black consumers that their needs and wants are not a commercial afterthought but a priority to businesses that value their patronage.
So this season, let’s not only light those Kwanzaa candles, but live out the principles of the holiday, including supportive and cooperative economics.