According to a study conducted by Jeffery Humphreys, director of the University of Georgia Selig Center, the buying power of minorities in the U.S. economy is growing at an exponential rate.
“The most important factors for the rise in buying power are economic growth, favorable demographic trends, the rising levels of educational attainment and the start of new businesses,” Humphreys said.
Buying power is the amount of money people have to spend after taxes and does not include savings or money that can be borrowed in the future, Humphreys said. For the entirety of 2014, African Americans, Asians and Native Americans will have a collective buying power of $2 trillion, 117 percent higher than the $916 billion they had available to spend in 2000.
Certain races have higher spending power than other because “of higher per captia income, higher levels of educational attainment, and the different levels of entrepreneurial activity amongst groups,” Humphreys said.
Humphreys said certain races have more spending power than others due to differing demographics, such as age. For example, the study found white people have the highest percentage of individuals in their “peak year,” meaning whites have the most amount of people able to contribute to the economy.
“Over the years a higher percentage of people have graduated,” Humphreys said.
Each of the race categories used by the Selig research have seen an increase in graduation percentages at all levels of education, including high school, undergraduate and graduate programs. This trend allows different races to give more to the economy and make up a larger or smaller sector of the market, Humphreys said.
Different races also have different per capita incomes, allowing them to contribute more or less to the economy.
“Over a long period of time, the United States’ economy has expanded” Humphreys said.
Brittany Arnold, a junior business major from Roswell and treasurer of the UGA Student Government Association, said the findings of Humphreys' study indicate a major shift in the U.S. economy.
“The increased minority buying power reflects the changing diversity within our country,” she said.