THE MYTH OF THE TRIFLING BLACK DOLLAR
All this noise about how the "Black Dollar" circulates at a lower rate than the "White," "Hispanic," "Asian," and "Jewish" dollar is unsubstantiated gibberish. An urban myth.
Man, there’s a stat that I’m tired AF of hearing but it’s incredibly hard to flee from. You hear it rolling off the tongues of politicians, preachers, and pundits. You see—and hear it— all over TiK Tok. You hear it cited by some who have been dubbed “thought leaders.”
What I’m talking, the thing that I—as well as many others— constantly hear and that’s got me tired AF is all that chatter about how behind the problems plauging Black businesses is the trifling and disloyal Black consumer.
Even more specifically, I’m talking about the oft-cited assertion that the “Black dollar,” unlike the “Asian,” “White,” “Latino,” and “Jewish Dollar,” fails to “circulate” sufficiently long enough to stimulate and sustain Black entrepreneurship and community economic development.
By “raising up”and “leaving” the “community” so quickly the “Black Buck” constrains the ability of Black entrepreneurs to provide employment, jobs, and community uplift. Or so the story goes.
Take, for instance, the following video by Ross Mac. Mac produces a video series called “Maceonomics.” Pay close attention to the specific claims that he makes about the “circulation” rate of the dollar in specific “communities.”
You catch the claim? Well, just in case you didn’t, he claims that “statistics show” that:
The “Asian dollar” circulates within “their” community for 28 days
The “Jewish dollar” hangs around for 19 days before leaking out
The “White dollar” keeps passing through White hands for 17 days before it “leaves”
And the “Black Dollar”:
Sticks around and circulates for a measly six hours before “leaving” the Black community.
And then there’s this one by Earl Graves. Jr. Again, catch the stats he cites.
Here’s the stats he cites:
The “Jewish Dollar” turns over or circulates 12 times before it “leaves” the community
The “Indian Dollar” circulates at least ten times before it raises up and leaves the community
In contrast, says Graves:
The “Black dollar” turns over less than one.
As Graves images it, the Black consumer can’t wait to take the “Black Buck” and spend it with people who, as they say, “don’t look like us.”
Such disloyalty!
These claims about the “disloyalty” of the Black consumer and the allegedly low circulation rate of the “Black Buck” are not confined to hot takes on social media. They get more than their share of play in personal finance and financial literacy literature targeted toward African-Americans, as well as in Black economic development proposals advanced by high profile Black celebs, preachers, and pundits.
And even, by the way, in public policy proposals and city councils. Just a year or so ago, for instance, Coleman A, Young II— a Detroit City Council member— requested that the Council’s Legislative Policy Division provide him with data on the generational wealth and the circulation rate of the dollar within the city’s Black community.
In its written response, the Legislative Policy Division links community economic vitality to the degree to which the dollar turns over or circulates within said community:
The circulation of the dollar in the community is a result of the spending practices of the people who inhabit the community. Specifically, the willingness or ability of consumers to spend with those who work and live within the community. The higher the circulation of dollars in a community, the greater the economic stability and opportunities for economic growth.
Interestingly, rather than provide specifics about the so-called circulation rate of the “Black Dollar” in Detroit’s African-American community, the Legislative Policy Division refers to two “studies,” one of which pegs the circulation rate of the “Black Buck” at less than one day and the other which at exactly six hours. These figures are the exact ones that one always hears on social media, as well as rolling out of the mouths of pundits who’ve made such stats part of their stump speeches and their “explanations” of the economic status of Black communities:
[A]ccording to the University of Georgia’s Selig Center for Economic Growth, in modern times, money circulates one time within the African American community, compared to more than six times in the Latino community, nine times in the Asian community and an unlimited amount of times within the white community. A Black Star Project study on the racial wealth gap calculates that a dollar circulates six hours in the Black community, 20 days in the Jewish community and 30 days in the Asian community. According to Census information, there are approximately 716 Black owned businesses in the city of Detroit. Although some of the business owners may not reside in Detroit, the existence of these businesses in the community, offers consumers the opportunity to patronized Black owned businesses. Black Bottom, at its height, served as home to approximately 100,000 Black people and three hundred Black owned businesses. Using this data, and looking at Detroit’s population today of approximately 500,000, African Americans, it can be argued that today Detroit should have at least 1500 Black owned businesses, or at least twice the number we currently have.
BUT WHERE DO THESE STATS COME FROM?
But here’s what bananas: If you ever try to track down the “study” and the research methodology that generates and empirically supports the claim about the supposed “short-life span” or weak circulation of the “Black Dollar”—good freakin’ luck!
Before I go any further, let me be clear about what I mean: I’m talking about the identification of the “authors” of the study, the precise title of the “study,”the peer-review journal in which the “study” appears, the date on which the “study” was published, the institutional affiliation of the “authors.” and so forth.
I’m talking about a write-up in a recognized journal that’ll enable the critical hearer to follow up on what’s being said and to read about how the “study” was undertaken, how the sample was selected, what database (if any) was used to calculate the “circulation rate” of the “Black Dollar,” as well as the “Asian,” “Latino,” “White,” “Indian” and “Jewish Dollar.”
Again, all you get is a bunch of speechifying that does little more than repeat—ad infinitum— unsubstantiated claims about how, in relation to other groups, the “Black dollar” supposedly has a life span, or circulation rate, that’s just a matter of a few hours. The utter lack of empirical data to substantiate these kinds of claims has led some to conclude, and understandably so, that what we’re dealing with here is nothing more than an urban myth [For instance, click here for info on how a project associated with Howard University has fact-checked the claims and found them unsubstantiated. Or here or here.]
Where did this stuff originate? That’s not clear. Some suggest that the narrative about the “Black dollar” had its earliest appearance in a 1996 personal finance book, Talking Dollars and Making Sense: A Wealth Building Guide For African-Americans. The author, Brooke Stephens, mentions the “stat” about the six hour life span of the “Black dollar” but, as is par for the course, she does not cite the title, author, or publication date of any study that allow the reader to fact-check her claim.
And just in case you’re thinking that there’s some federal or governmental agency that collects and publishes this kind of data—stop. It aint so. The Bureau of Labor Statistics (BLS), for instance, publishes an annual Consumer Expenditure Survey (CES). The CES provides detailed information on the income, expenditures, and the race and ethnicity of consumers. From the most recent CES, for example, one can see that Black, White, Hispanic, and Asian consumers, respectively, spend 37%, 33%, 36% and 34% of their income on housing. Likewise, the Federal Reserve’s Survey of Consumer Finances (SCF) provides, among other things, important information of the income and wealth of U.S households, with the data often disaggregated by race and ethnicity.
But—and here’s the point—neither the Bureau of Labor Statistics nor the Federal Reserve provides anything remotely close to estimates of how often a dollar “circulates” within a given “community” before it exits.
So, there’s simply no way that these (or any other) Federal data sources can be used to substantiate such claims as “the dollar circulates 28 days in the Asian community, 19 days in the Jewish community, 17 days in the White community but only 6 hours in the Black community.”
WRAPPING UP
There’s no doubt that more could—and should—be done to support Black businesses. But you don’t do drum up support by mindlessly and relentlessly repeating claims that simply have no factual basis.
You dont’ drum up support by painting a picture that casts Black consumers as so anxious to spend their coins outside of the community that the “Black Dollar” raises up and leaves before the sun set.
Especially, again, when you’ve got no evidence to support the widely circulated thesis that the “Black Dollar” is relatively trifling— that is, it has a lower circulation rate than the “White,” “Latin,” “Asian” or “Indian” dollars.
Encouraging more of us to patronize Black businesses can—and should— be done. And it can be done without resorting to all that tired and unsubstantiated bullshit about a supposedly disloyal Black buyer and a trifling Black dollar.