While Black Friday draws millions of shoppers, America’s class divide is on display
The combination of a booming economy, a healthy stock market and a low unemployment rate means that consumer confidence is up this year, suggesting huge numbers of shoppers and huge sales figures for Black Friday and the holiday season.
The National Retail Foundation expects more than 165 million people to shop over Thanksgiving weekend and forecasts more than $700 billion in overall holiday sales through the end of year. The foundation said half of holiday shoppers have already started.
But experts point out that Black Friday, one of the biggest shopping days of the year, also highlights the wealth gap between classes and races.
“Black Friday is mostly a ritual,” said Ross Steinman, a Widener University professor who focuses on consumer psychology.
For this reason, Steinman says, shoppers of all social classes faithfully rush to get deals each year since the late Thursday and early Friday shopping crush is also a distinctly American family bonding experience, which drives traffic.
The frenetic pace of those early-morning hours, with shoppers battling for places in line and then battling for merchandise, Steinman speculates, may be fueled by need more than greed.
“Shoppers who are lower in terms of socioeconomic status, there’s more of an impetus to capture [items] at a lower price point,” Steinman said.
This is illustrated in the differences between people who wait in line outside of big retailers early Thanksgiving Day out of necessity, and those who can wait comfortably until the next afternoon.
Affluent shoppers “pluck”
Steinman points out that affluent shoppers tend to “pluck” during want-based shopping, picking only certain appealing items from various retailers and luxury stores. Shoppers with tight budgets may seek the day’s deals out of necessity, and are often limited as to where they can go to shop.
“Lower income individuals perhaps might not have access to a vehicle, so when they go to the closest retailer, they’re not going there to purchase one thing, they’re going to purchase many things,” Steinman said.
The reality for many shoppers is that they can’t afford not to show up early on Friday, the busiest day of the weekend. Black Friday early-hour specials offer deals on products that are usually too expensive or even on necessities they can’t otherwise afford to buy or replace when damaged.
Research shows that Black Friday shoppers are more likely to be ethnically diverse and to have children than average consumers.
Henry McKoy, a business professor and director of entrepreneurship at NC Central University, said that particularly for low-income communities who are mainly African-American or Latino, Black Friday is a chance to feel that they are participating in a successful economy enjoyed by higher-income people.
“It’s the embodiment of this sense of ‘more than any time in the year now, this connects me to this overall economy,’” McKoy said. “People can feel like, ‘OK, I’m a part of the American dream in some way by being able to take on this massive consumer economy.’”
In some ways, McKoy said, Black Friday is ironic for people of color facing a wealth gap with white Americans.
“[Black Friday] is driven by the joy of saying, ‘Hey, I feel like I’ve got the best of this corporation,’” McKoy said, while pointing out that the opposite is the reality.
The gap in entrepreneurs
“When you look at the wealth gap, it is largely driven by the racial entrepreneurship gap,” McKoy said. “Black Friday becomes an embodiment of what is exacerbating those gaps.”
McKoy contributes research to the Samuel DuBois Cook Center on Social Equity at Duke University, where he is teaching this semester on the disparities between black and white entrepreneurs as a result of inequalities in accessing capital.
A report released by the Cook Center last month details how black entrepreneurs are more likely than white entrepreneurs to enter into businesses with little, if any, financial and institutional support due to things like a lack of family wealth and loan discrimination.
According to the report, titled “Entering Entrepreneurship: Disparities in the Pathway to Business Ownership,” 66% of white-owned businesses in the management sector in 2016 were acquired by purchase, inheritance or transfer. Only 33 percent of black-owned businesses in that sector were acquired in the same ways, since a majority of black owners start their companies.
“Typically, who owns businesses that grow big enough not only at the local level, but on a regional level, even global level, those firms are less and less diverse,” he said.
Among those businesses are the big box retailers that low-income shoppers flock to.
According to Black Enterprise, the top 100 black-owned businesses made over $29 billion in revenue and employed more than 71,000 people in 2018. Walmart, the largest private employer in the U.S. and a major Black Friday retailer, reported revenue of $514 billion in 2018 — 17 times more than the top 100 black-owned businesses combined. It employs 2.2 million more people than all 2.58 million black-owned businesses combined.
Though research from the Cook Center points out that spending money on black-owned businesses doesn’t close the wealth gap, the class and racial wealth divide isn’t narrowed through what giant retailers gain from low-income shoppers in holiday shopping.
“Where the resources go determine not only who has the wealth, but who gets hired, who in the community gets access to capital, who puts philanthropic efforts to give money,” McKoy said. “Black Friday really is part of a bigger narrative.”
This story was originally published November 22, 2019 at 3:02 PM.
