Black Math Matters

The NY Times Business Section presents an uncritical take on Buying Black:

Blacks Are Challenged to Buy From Black-Owned Businesses to Close Gap

By TATIANA WALK-MORRIS   NOV. 15, 2015

CHICAGO — Should black people go out of their way to patronize black-owned business?

Maggie Anderson says they should. In 2008, with the economy in the middle of the worst downturn since the 1930s, Ms. Anderson enlisted her husband and two daughters in a yearlong plan to consume goods and services exclusively from black-owned businesses. The journey became a basis for her 2012 book, “Our Black Year,” the subject of several TED talks about how to increase wealth in the African-American community, and the narrative behind a current cross-country tour aimed at spreading her gospel.

These are private citizens acting privately to advance a perfectly legal cause they believe in, and more power to them. However, I am incensed by the hijacking of math, statistics and verbal clarity displayed here:

“At first, I did take it personally that people would call us racist,” Ms. Anderson said. But “if we want to create jobs in the black community, we have to support black businesses.”

Spurring job creation in the black community is one of her goals. A study by the Kellogg School of Management at Northwestern University found that between half a million and a million jobs could be created if higher-income black households spent only $1 of every $10 at black-owned stores and other enterprises.

We are offered a similar description of the study here:

“According to the landmark Northwestern University’s Kellogg Business School study based on The Empowerment Experiment, out of close to $1 trillion in Black spending power, maybe 3 percent of that goes to Black professionals, suppliers and firms,” Anderson wrote. “But if Black households with annual income of $75,000 or more –middle and upper income African Americans – were to increase spending with Black professionals and firms from 3 percent to just 10 percent, we could create close to 1,000,000 jobs.”

She explained, “This 10 percent includes direct spending with local Black-owned businesses, as well as indirect spending through the support of Black vendors, agents, dealers and franchises of mainstream firms. The new jobs would be created from the money we already have and currently spend – no government program and no corporate social responsibility outlay necessary.”

First, we are not talking about "jobs created", we are talking about "jobs transferred". The businesses currently supported by blacks as they re-direct their spending will sell less and the impact may (or may not) ripple up their supply chains. If this results in job creation in black communities offset by job losses in other communities, well, I can accept that as their goal but the Times ought to present it a bit more clearly.

Secondly, the study, at least as summarized in Ms. Anderson's book does not have the heft to support these conclusions. The study is described in pages 84-86 (Yes, you can look inside) and I have challenged Amazon's copyright people by including screenshots of the three relevant pages below.

The gist: Although caveated as a soft number, $913 trillion is the total spending by black consumers in the US (2008). Black families earning more than $75,000 a year make up some portion of this total, not disclosed here. But if these families increased their spending on black businesses from 2% to 10%, that would lead to $14 billion in revenue for black business.

They then divided $14 billion by the cost of a new Subway franchise ($81,300 to $203,000) and concluded these revenues could support between 69,000 and 172,200 new Subway stores, each of which would employ 8 to 13 eager young ethnics. Using the lower estimate for new stores (69,000) implies half a million to nearly a million new jobs.

To be fair, they note that even the 69,000 figure is larger than all the Subways in existence. What they do not note is that "revenue" does not equal "income" does not equal "investable capital".

So just to begin the rollback: the assurance that his community would spend $203,000 a year in his new store is unlikely to be enough to prompt someone to open a new Subway:

Subway's startup costs, which include construction and equipment leasing expenses, range from $116,200 to $262,850, according to the company.

Opening a McDonald's restaurant requires as much as $2.3 million in startup costs alone, by comparison.

But Subway restaurants generate less revenue than McDonald's units.

A Subway restaurant, on average, generates $490,000 in sales annually, compared to $2.5 million in average annual revenue for McDonald's restaurants, according to QSR magazine.

Averages can be deceiving, but still - using $500,000 as a target revenue stream, $14 billion in new revenue would support 28,000 new stores, not 69,000. And that ignores any obstacles involving owner's net worth or upfront opening costs.

Secondly, the notion that this black customer base will re-direct their new spending primarily to labor-intensive businesses is, well, optimistic. Ms. Anderson describes filling up her car at a black-owned gas station. Unless that owner is buying his gasoline from a black-owned supplier who is buying gas from a black-owned refinery who is buying crude oil from a black-owned driller in a black-run nation shipped on black-owned tankers, most of that money will cross back pretty quickly to the mainstream economy. A similar point can be made about groceries, appliances, televisions (I am looking around my kitchen wondering what I spend my money on... work with me here). Yeah, movie tickets - buying at a black-owned theatre won't make Luke Skywalker black. Or George Lucas.

Fine, I'm sure that buying groceries at a black-owned and staffed store instead of a suburban Whole Foods may shift jobs to Ms. Anderson's preferred ethnic group and more power to her. But 1 million new jobs, or even half a million? I doubt it.

From "Our Black Year":

Comments

[GMax]

OH YEAH First AGAIN!

[Threadkiller]

http://youtu.be/KNQRqAoT-2c

[Sue]

Happy birthday dear leader. Many blessings and lots of bubbly for your special day.

[Miss Marple 2]

If this catches on, black-owned businesses will end up losing money.

1. Black customers are currently not spending as much as white customers.
2. When you become a preferred black business, a certain number of whites will stay away, either for political reasons or because they are nervous about gang-bangers. (Right now I don't know the owners of the businesses I patronize.)
3. Maybe black businesses don't make as much money because they either sell inferior merchandise, charge too much, or give poor service. lot of black people are not going to give businesses their hard-earned money if they are a crummy business.
4. The whole thing is stupid. What if I started a "whites only idea of business patronage? RACISM!

[henry]

So much spending, so few jobs produced. Plus the jobs aren't net.

Reminds me of porkulus and Krugmanomics.

[GMax]

There just arent enough black run businesses to satisfy the needs. I applaud the idea of having skin in the game ( black, or white or green with stripes ). There was a time when there were plenty of middle class black businesses. The oh so caring nature of prog programs took a broomstick to that, though.

[GMax]

Guess which way the gale is blowing? Opposition to insane Zero policies, its not just for Republican Governors any more. Nope. Maggie Hassan( last understood to be a Democrat running New Hampshire )has climbed aboard the citizen safety train. Bet that makes it awkward for her at the next prog fundraiser...

[Stephanie]

The blacks in Atlanta when Maynard and Andrew were mayor tried this and advocated using $2 bills to pay. Didn't work out so well. First of all, there was a shortage of $2 bills, secondly, not enough blacks were using actual cash v EBT cards. But Maynard and Andrew were giddy with the optics as it showed they cared.

Funny, too, cause many middle class blacks made it a point to use white accountants, insurance agents and such as they bragged that it was a 'status' symbol to be able to afford to have whites doing their business. Julian Bond and Ralph David Abernety were particularly hypocritical braggarts of this "status."

[ROA]

If black consumers really spent $913 trillion dollars in 2008, the probem of black poverty has pretty much been eliminated.

“The gist: Although caveated as a soft number, $913 trillion is the total spending by black consumers in the US (2008).”

[Sue]

This would only work in large cities.

[James D.]

These are private citizens acting privately to advance a perfectly legal cause they believe in, and more power to them.

No. They are racists, and they are scum, and they are preaching a divisive and hateful message, and they can go fuck themselves.

Sorry. My tolerance for racist, or racialist, or race-whatever-ist crap has been all used up.

[GMax]

Category 4 Hurricane it seems.

Politico has a running count and we have missed a few, including a second Democrat Governor:

What started as a trickle of opposition turned into a deluge by late Monday as GOP governors from Texas, Florida, Georgia, Tennessee, North Carolina, Arizona, Maine, Massachusetts, Wisconsin, Indiana, Mississippi, Illinois, Ohio, Louisiana, Arkansas — and Democratic Govs. Maggie Hassan of New Hampshire and Steve Bullock of Montana — joined Alabama Gov. Robert Bentley and Michigan Gov. Rick Snyder in refusing to accept refugees from Syria.

That is 19 Governors and the day is not over yet. Gusts up to Category 5

[centralcal]

Happy Birthday, Tom! Many blessings to you and your family.

Did you all see Tulsi of Hawaii wants to curtail visas of the French and Belgians. No mention of Syrians, though, so guess we can't add her state to the list of the others not accepting refugees.

[centralcal]

John Nolte ‏@NolteNC 1m1 minute ago

CO, VT, CT: Dem Governors Want Syrian Refugees - Breitbart http://www.breitbart.com/national-security/2015/11/16/co-vt-ct-dem-governors-want-syrian-refugees/ … via @BreitbartNews

California will be next - I can just hear Jerry Brown now, inviting all of 'em in. San Francisco, L.A., Sacramento would be great cities to settle in.

[Miss Marple 2]

Not on the thread topic, but a good read:

http://www.breitbart.com/national-security/2015/11/16/im-a-gay-man-and-mass-muslim-immigration-terrifies-me/?utm_source=facebook&utm_medium=social

[Porchlight]

19 = good. Keep it coming.

[Beasts of England]

I think that should be $913 billion.

[GUS]

What if the business owner is HALF BLACK, you know??

Do I give that bidness FITTY CENT??

[jimmyk]

increase spending with Black professionals and firms from 3 percent to just 10 percent

That seems well nigh impossible anyway. Considering a big chunk of spending is on housing, transportation, utilities, etc. that is not discretionary or switchable (go to a black-owned grocery store?), the whole idea is farfetched.

[Beasts of England]

Gay versus Muslim immigrants equals intersectionality. I'll have to reference my official DNC Victimhood Hierarchy Pyramid to see who prevails.

[GUS]

Ahhhh yes, CT Drunken Danny
CO. LICKENPOOPER, and CALI MOONBEAM.

Someone's knockin at the door, somebodies ringing the bell, do me a favor open the door and BOOOOOOOOOOOOOOOOOOOOOOOOM!!!

[clarice]

http://foreignpolicy.com/2015/11/16/house-republicans-seek-to-cut-off-funding-for-syrian-resettlement-program/

[Sue]

How do you deteine if the business is owned by black or white? And do Hispanics count as white?

[Sue]

Determine if...

[Miss Marple 2]

Picked this up on Twitter. The poster commented that the left wants us to think that forest fires are due to climate change.

Possibly, that is a false narrative.

http://wildfiretoday.com/2012/05/02/al-qaeda-magazine-encourages-forest-fire-arson-in-the-us/

[GUS]

Sue, we can't even determine that a GUY with both TWIG and BERRIES is a GUY anymore, but we can determine that George Zimmerman is WHITE HISPANIC.

[clarice]

Now 20 I think: Add Kansa shttp://cjonline.com/news/2015-11-16/sam-brownback-joins-chorus-governors-seeking-turn-away-syrian-refugees?utm_source=cjonline.com&utm_medium=link&utm_content=homepage&utm_campaign=latest-news-widget

[Sue]

There used to be a funeral home in town that only blacks used. The name of the funeral home was White's Funeral Home. I always found that funny. It went out of business and now we all use 2 funeral homes left in town.

[Momto2]

Someone tweeted a picture of the U.S. with Interstate Highways marked and this:

"This is a map of the interstate highway system. It connects the states that will accept refugees to those who won't."

[Porchlight]

Surely all of the R governors will join in eventually. Except maybe Christie.

[Porchlight]

"This is a map of the interstate highway system. It connects the states that will accept refugees to those who won't."

Of course. And the President can veto any laws passed by a GOP Congress. Same concept. But you still have to push back and make them own it.

[Janet]

So businesses are moving out of Connecticut & Syrian refugees will be movin' in.
*Borgeson Universal leaving Torrington for South Carolina - http://www.registercitizen.com/general-news/20150827/borgeson-universal-leaving-torrington-for-south-carolina

*Goodbye, Connecticut: It’s just too expensive here - http://m.journalinquirer.com/mobile/opinion/other_commentary/goodbye-connecticut-it-s-just-too-expensive-here/article_7aa52808-8930-11e5-9aa1-8b1a9ec391af.html

THe second link is really good.

[anonamom]

HB TM!!

Thanks to the great press conference coverage. Caught about three minutes of the petulance when I walked through the nurses' lounge.

I'm glad his momma is dead--he shames her. Though, she didn't actually raise him, so there's that.

[GMax]

Connecticut and California are blue hells. Hickey may regret that statement more than the gun legislation that triggers the backlash in Colorado leading the Cory Gardner lansslide win. There is a reason Democrats in other purple states, i.e. Montana and New Hampshire want no part of the stupidity of Zero...

[FTL]

RE: These dumbass leftists showing their asses on TV and in print about "refugees"

All they had to do once the news of the Paris attacks broke was to pretend like they were never in favor of importing jihadis. It wouldn't have been the first time these liars ever lied, and what could possibly be the cost of putting a little daylight between themselves and the lame ducks of this administration?

But because they fell all over themselves rushing to virtue-signal their undying fealty to Obama, Jarrett's punkass little pet faggot had no choice but to double down.

When ISIS launches a coordinated attack in this country over the next few months, it will be 1861 again.

[Momto2]

"Of course. And the President can veto any laws passed by a GOP Congress. Same concept. But you still have to push back and make them own it."

I totally agree - it's just a reminder not to feel any false sense of security if you live in one of these states - once they're here they can go anywhere. According to what I read today - they want to go to Washington, D.C. next....

[Janet]

a bit from Dr. Ben Carson statement on FB - "This morning President Obama announced at his press conference that it was our responsibility to accept these refugees. He is wrong. He took an oath to protect and defend this country"

[Threadkiller]

Math that matters:

http://youtu.be/6D7sxmmLaik

[Jack is Back!]

Vatican closer to joining the fight.

http://www.cruxnow.com/church/2015/11/16/top-vatican-diplomat-backs-use-of-force-in-wake-of-paris-attacks/

How many divisions does the Pope have? Of even Air Support?

[Captain Hate on the iPad]

Mercifully I missed the purple lipped retard's presser. Was today the day that the MFM decided he was too Costanza for them to defend anymore?

[Jack is Back!]

CH,

From my read, yes. Especially the foreign press.

[centralcal]

For Porchight:

.@ChrisChristie to @HughHewitt: No #SyrianRefugees In America, Not Even ‘Orphans Under The Age Of Five’ http://dailycaller.com/2015/11/16/christie-no-syrian-refugees-in-america-not-even-orphans-under-the-age-of-five/ … @dailycaller

I think he is a "No" Porch! LOL

[henry]

Then via Steyn, the "mastermind" worked in a Belgian immigration office. Yup, the cell leader vetted immigrants.

[Buckeye]

"Jarrett's punkass little pet faggot"

I am definitely using that FTL. Let me know where to send the royalty checks.

[Captain Hate on the iPad]

JiB, I just saw a two minute clip where he came close to a full meltdown. If he loses them, except for Anderson Cooper who will fight with Reggie for fellatio rights, I don't think the Ferret can keep him together.

[Jack is Back!]

Mean't to post that about the immigration office job. Mrs. JiB brought that to my attention this morning after she read the Belgian press. There are more bombs and shoes to drop as the Belgia on press like ours get off their collective ass.

[FTL]

Let me know where to send the royalty checks.

I should set up a trust. I'm sure there's some foundation out there for hooers too butt ugly to feed themselves walking the streets.

Anyone else remember this jingle?

"Stanley. We want to help you do random foreign muzzies right."

[Frau Steingehirn]

Just another guy in the neighborhood -

His last known residence was in the town of Chartres, population 40,000, a suburb of Paris populated mostly with families. Speaking to neighbors there this week, Spanish newspaper El País found shock and confusion. During his estimated three years there, Mostefai had been a quiet, barely perceptible neighbor. “He was very polite, my daughter went to school with his,” one neighbor said.

“He did not speak to anyone,” another neighbor, identified as Corinne, told El País. “Every morning a friend would wait for him on the road by his house and they went to the mosque. I do not think he had a job, but his father worked at the airport.”

Was his father a baggage handler, peut-être? This terrorist did not work but was able to travel to Turkey and most likely Syria.

[GUS]

Buckeye!!! The little faggot's got his own jet airplane!!!

[squaredance]

Well, as someone pointed out, "refusing" the Muslim colonizers is mostly a political gesture. The Governors cannot stop internal migration in the USA. Given how the NJ side of the NYC metroplex is, and how the Welfare state operates there, a very great many of them will find their way there.

This is really not going to be stopped. One doubts that a new administration would actively seek to deport them, and the liberal courts will in any event tie that up. The Left knows this and this is why they press on. They also know that they will pay very little for it. Sure, they may lose a few elections, but when the tide turns they will have permanent power. in the interim, their various seats in the Nomenklatura and th shadow government--the real government too--are secure.

Of, and the other Dems are not "virtue signaling", they are all in for the destruction of the USA, particularly the White, Christian, middle class. They are the dread Kulacks after all. We are nothing but tax slaves to be sucked dry and forced to submit, and then they will be on to the next victim. There is nothing at all new in this, even the racial destruction is part of it--the only new thing here is the matter of degree. Well, I take that back: what is shockingly new is the supine surrender or doe like cluelessness at the destruction of the nation right before our very eys.

You really must stop buying their rhetoric as that of misguided, vain fools. They mean our destruction--what you are calling "virtue signalling is just a cover for their aggression. They know this: so should the rest of us. Nor is it about "obedience" to Obama. He is merely the creation of their masters. It is obedience to the Party. This is always how it is with Communists for they own all that they have to the Party's political power. Without this power they are now worth very much. They are corrupt and barbaric to the very core of their being. They hate you; they hate America; they hate Western Civilization. They are morally depraved. They are not, however, fools so far as achieving their goals go. They are almost there.

There will be more waves of Muslims, and he will try with Latin America the same sort of flood that is going on now in the EU. This shall happen before the next election.

This is just the tip of the iceberg, and it well may finally and permanently entrench them in power.

The only way out is to completely remove them from power and influence of any sort--not just in politics but in all the institutions they have corrupted. This is a tall order; it is the tallest of orders. I do not see it happening short of Civil War.

I certainly do not see the GOP actually calling them out on this. The GOP, even the Cruz's of the party, still think they are debating "policy". They just fall into the trap of the Left's verbal and emotional warfare.

At this point, it may be that the Europeans will be the ones to take back their civilization. This is a profound irony given the history of the last century.