There are 35 million African Americans in the United States comprising 12.7 percent of the total population. This population segment is expected to grow nearly twice as fast as the rest of the population over the next fifty years. The median age of African Americans is 30, nearly six years younger than the median age of the total population.
African Americans spend over $520 billion annually
There are 12.9 million African American households in the U.S. representing a 48 percent increase over the last 20 years. African American households are larger than the average of the total population. The average size of each African American household is 3.2 people compared to the U.S. average of 2.6 people. An average household spends $23,642 annually.
African Americans are an active consumer market. African Americans most often shop for pleasure. In fact, for most, shopping trips are regular social outings with their peers.
43% own their own home.
64% of households took at least one vacation within the past year.
$33 billion was spent on new cars last year.
$3.8 billion was spent on consumer electronics last year.
23% hold a bachelors degree or higher.
Mellody: Obviously, the result of this election – the election of Donald Trump – will have huge consequences. Before we get to financial issues, we have to talk about the broader impact this will have on our community. We have seen the truly frightening sentiments his win has unleashed around the country, with supporters targeting, threatening or attacking Blacks, Hispanics, Muslims and others.
Like millions of others, I am shocked at the outcome and uncertain about what it means for people of color. There will be huge ramifications, from our rights to our pocketbooks. To understand what they might be, we have to look at his policy proposals. Starting there, there are a few areas that have the potential to dramatically change things for everyday Americans.
I think we can all agree there are some very challenging times ahead for us. From a policy perspective, give us an example of a policy change that will have consequences for our finances.
Healthcare really stands out. On the healthcare front, Donald Trump wants to repeal the Affordable Care Act and replace it, but he has not elaborated what would replace it. For many individual Americans, the destruction of the ACA will be a disaster. After all, the bill has dramatically decreased the number of uninsured americans, from a high of 48.6 million to 27.3 million now. On top of that, people can no longer be denied coverage because of a preexisting condition, and the rise of healthcare costs has slowed.
While it is widely acknowledged that there are some areas that need to be fixed – for example premium rises averaged 25% over the last year, which is not palatable, and options in some places, especially rural areas are becoming fewer – president-elect Trump has not provided much detail about what his planned replacement would be, let alone how it would address rising healthcare costs and those who have few options, let alone those would lose their insurance with the repeal of the ACA. The concerns about changes clearly motivated people, as Wednesday saw a record 100,000 people signed up on the Obamacare exchanges.
What about taxes? He often talked about taxes during the campaign. What can we expect there?
For individuals, Trump campaigned on a platform of flattening the tax code, essentially making it less progressive. Under his plan, he would reduce the highest tax bracket from 39.6% and 35%, in the top two tax brackets respectively, to 33% but would raise the tax rates from 10% to 12% for households in the lowest tax bracket makings under $9,274.99, to 25% from 15% for households making between $37,500 to $37,649.99. Put clearly, this shifts a higher tax burden to lower-income workers, while cutting taxes for those who make the most.
In terms of taxes on companies, he also has big plans. The corporate tax rate is a big issue confronting the U.S., especially as other developed countries have lower corporate tax rates than the U.S. and multinational companies keep billions of dollars abroad to avoid paying taxes on profits here in the U.S. And tax policy is one area where we do have some level of detail about Mr. Trump’s plans for the country. He is proposing to drop the top U.S. corporate tax rate to 15% from 35%, and would like to impose a 10% minimum tax on untaxed foreign earnings. This would be a boon for corporate America, but the big question is how to pay for these tax cuts.
How will our investment portfolios be impacted?
Great question, and one that we are going to have to wait to answer. In the short-term, we know a few things. First, there were some predictions that a Trump victory would have huge downside consequences for the markets. That has not come to pass, primarily due to the fact that markets are reacting positively because the levers of power are all in the hands of one party.