UW News

January 28, 2000

UW study gauges growing economic clout of Washington’s African American businesses and consumers

African Americans have become an increasingly vital force in Washington’s economy, spending more than $2 billion annually and owning more than 6,600 businesses, according to a new University of Washington report.

African Americans also are starting businesses and boosting their household spending at a rate faster than the state average, according the report, “Impact of African American Families and Businesses on the Economy of Washington State.”

“In all those areas, African Americans’ growth exceeds that of the state as a whole,” said report co-author William Bradford, professor of business and economic development at the UW Business School.

Against that upbeat picture, however, the researchers found that black-owned businesses tend to be much smaller than average and that their growth tends to be painfully slow.

Bradford and co-author Michael Verchot, director of the UW’s Business and Economic Development Program, conducted the research at the request of the state House of Representatives’ committee on Economic Development, Housing and Trade. Also instrumental was Tony Orange, executive director of the Washington State Commission on African American Affairs.

Addressing the lawmakers last week, the authors reported that African Americans are becoming a sizeable economic presence in counties such as Clark, Franklin, Island and Whatcom — far from traditional black population centers in Seattle and Tacoma.

Between 1992-97, for example, while the African American population was growing by 25 percent in King County, it soared by 46 percent in Island County and 72 percent in Whatcom County. And more than a dozen Washington counties now have African American communities of at least 1,000.

Reflecting gains in income, Washington’s blacks increased their household spending by about 25 percent (adjusted for inflation) between 1990-97, an increase far greater than the state average.

“These growth rates,” the report says, “show that African Americans represent an emerging market of increasingly affluent consumers in every region of Washington.”

Still, not all of Washington’s African Americans are prospering. Their per capita income of $12,590 is far below the state norm, and black-owned businesses tend to be small — only 13 percent of them have any employees beyond the owner.

The authors recommend that lawmakers commission a year-long study to identify strategies to increase the economic success of African Americans and other minority groups.

Such programs would benefit the state as a whole, Bradford said. According to the report, Washington’s African Americans already pay more than $14 million annually in business taxes and control companies paying more than $68 million in wages.

“With the rapid growth in tax revenues from African American families and businesses,” the report says, “the state would be well served by implementing programs and strategies that would lead to additional growth in these sectors.”
For more information and a copy of the full report, contact Bradford at (206) 543-4559 or bradford@u.washington.edu or Verchot at (206) 543-9327 or mverchot@u.washington.edu.