Research

Buying Power (Quick Take)

Apr 27, 2020
What Is Buying Power?

Buying power is defined as “the total personal income of residents that is available, after taxes, for spending on virtually everything that they buy, but it does not include dollars that are borrowed or that were saved in previous years.”1 It is sometimes referred to as “disposable income” or “discretionary income.” Buying power demonstrates that women and underrepresented populations have enormous influence as consumers, which may not necessarily correspond with the size of their populations. Smart companies will invest in a diverse workforce and leadership team, positioning themselves to better understand and compete for the market share of these growing, powerful consumer bases.

GLOBAL

Globally, Women Performed an Estimated US$31.8 Trillion in Consumer Spending in 20192

Women’s Annual Consumer Spending in Select Regions and Countries (2019)3

Region/Country Annual Consumer Spending in 2019
Asia US$13.4 trillion
Australia US$300.8 billion
Canada US$456.6 billion
Europe EUR€4.8 trillion
France EUR€496.2 billion
Germany EUR€694.5 billion
India US$2.6 trillion
Japan US$1.3 trillion
United Kingdom GBP£501.7 billion
United States US$6.4 trillion

However, there is a global gender gap in average buying power between women and men.4

  • This gap is on the rise. The difference in average buying power between women and men is set to increase from US$236.62 in 2019 to US$467.17 by the end of 2030.5
  • Women tend to earn less than men, which impacts their buying power.6
Women Are Far More Likely than Men to Be Responsible for Household Spending7

On average, 89% of women across the world reported controlling or sharing daily shopping needs, compared to only 41% of men.8

The Buying Power of the Global LGBT Population Is About US$3.6 Trillion9

Estimated Buying Power of the LGBT Population in Select Regions and Countries (2018)10

Region/Country Estimated Buying Power (US$ in 2018, Measured as Nominal GDP)
Asia $1.3 trillion
Australia $72 billion
Canada $86 billion
European Union $900 billion
France $134 billion
Germany $192 billion
India $117 billion
Japan $253 billion
United Kingdom $137 billion
United States $1.0 trillion

UNITED STATES

People of Color Hold a Growing Share of Buying Power in the American Economy11

Buying Power in the United States by Race/Ethnicity12

Share of US Population (2019) Share of Buying Power (2019) Buying Power (US$) (2019) Percent Increase in Buying Power (2010-2019)
White 76.2% 81.7% $13.2 trillion 39.5%
Black 13.4% 8.9% $1.4 trillion 48.1%
Asian 6.3% 7.1% $1.2 trillion 89.5%
Latinx13 18.6% 10.7% $1.7 trillion 69.1%
American Indian
 1.3% 0.8% $126.8 billion 51.8%
Multiracial 2.8% 1.6% $253.9 billion 73.6%

The buying power of Latinx and Asian Americans is on the rise.14

  • Latinx buying power ($1.7 trillion) surpasses the entire economies of all but 9 nations across the world. It is larger than the GDP of Canada but smaller than the GDP of Brazil.15
  • Asian Americans’ buying power ($1.2 trillion) dwarfs all but 15 nations across the globe. This amount is higher than the GDP of Indonesia but less than the GDP of Mexico.16

Black Americans’ buying power is also growing, fueled by increasing education levels and the number of Black-owned companies.17

Women Are Earning a Higher Share of Household Income18

Women direct 83% of all consumption in the United States, in buying power and influence.19

In 2019, women contributed an estimated $26.0 billion in labor every day to the gross domestic product (GDP) of the United States.20

  • Women of color supplied a significant amount of labor daily to the GDP of the United States:21
    • Black women: $3.8 billion.
    • Asian women: $1.7 billion.
    • Latinas: $4.2 billion.

Household spending in 2018: $13.6 trillion.22

  • Single women across all income brackets spent, on average, $34,817 on goods and services in 2017–2018.23
  • Working married women contributed over a third (37.1%) of their families’ incomes in 2017.24
  • Over a quarter (29.4%) of wives earned more than their husbands in 2018, an increase from 15.9% in 1981.25
The Buying Power of LGBT Americans Has Reached $1 Trillion26

Same-sex couples, for example, have a higher rate of employment than married opposite-sex couples and a higher median income than all opposite-sex couples.27

  • Couples with household incomes over $100,000:28
    • 46.7% of same-sex couples.
    • 45.3% of married opposite-sex couples.
People with Disabilities, Their Families, and Communities Make Up a Powerful Consumer Base29

In the United States, working age (16–64) people with disabilities have an estimated total disposable income of $490 billion.30

Generation Z Is a Growing Consumer Base31

A 2018 analysis found the buying power of Generation Z Americans at approximately $29 billion to $143 billion.32

ADDITIONAL RESOURCES

Catalyst, Quick Take: Women’s Earnings – The Pay Gap.

Catalyst, Quick Take: Why Diversity and Inclusion Matter.

Nielsen, African-American Women: Our Science, Her Magic (2017).

Nielsen, Asian American Women: Digitally Fluent with an Intercultural Mindset (2017).

Nielsen, “Balance for Better: A Dream or Reality for Women Around the World,” (2019).

Nielsen, “Black Impact: Consumer Categories Where African Americans Move Markets,” February 15, 2018.

Nielsen, Latina 2.0: Fiscally Conscious, Culturally Influential & Familia Forward (2017).

Prudential, A Total Market Approach: Opportunities to Expand Your Business with Diverse Customers (2017).

 

How to cite this product: Catalyst, Quick Take: Buying Power (April 27, 2020).

  1. Jeffrey M. Humphreys, The Multicultural Economy 2019 (Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2019): p. 4.
  2. World Data Lab, “MarketPro” (2020).
  3. World Data Lab, “MarketPro” (2020).
  4. Baldwin Tong, “The Annual Spending Power Gender Gap: North America,” World Data Lab, June 18, 2019.
  5. Baldwin Tong, “The Annual Spending Power Gender Gap: North America,” World Data Lab, June 18, 2019.
  6. International Labour Organization, Understanding the Gender Pay Gap (2020): p. 6.
  7. Nielsen, “Women: Primed and Ready for Progress,” (October 14, 2019).
  8. Nielsen, “Women: Primed and Ready for Progress,” (October 14, 2019).
  9. LGBT Capital, “Estimated LGBT Purchasing Power: LGBT-GDP,” (2018).
  10. LGBT Capital, “Estimated LGBT Purchasing Power: LGBT-GDP,” (2018).
  11. Jeffrey M. Humphreys, The Multicultural Economy 2019 (Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2019): p. 4.
  12. Jeffrey M. Humphreys, The Multicultural Economy 2019 (Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2019): p. 12-15.
  13. Consistent with data from the United States Census Bureau, the Selig Center measures Hispanic/non-Hispanic origin as an ethnicity rather than as a racial category. Therefore, the share of population and buying power for those of Hispanic origin (here noted as Latinx) should be viewed in addition to those included within racial categories (which collectively equal 100%).
  14. Jeffrey M. Humphreys, The Multicultural Economy 2019 (Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2019): p. 7, 9.
  15. Jeffrey M. Humphreys, The Multicultural Economy 2019 (Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2019): p. 4.
  16. Jeffrey M. Humphreys, The Multicultural Economy 2019 (Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2019): p. 7.
  17. Jeffrey M. Humphreys, The Multicultural Economy 2019 (Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2019): p. 5.
  18. Bureau of Labor Statistics, “Table 25: Contribution of Wives’ Earnings to Family Income, 1970-2017,” Women in the Labor Force: A Databook (December 2019).
  19. Morgan Stanley, Beyond the VC Funding Gap: Why VCs Aren’t Investing in Diverse Entrepreneurs, How It’s Hurting Their Returns, and What to Do About It (2019).
  20. This figure accounts for the approximately $30.5 million in unpaid labor women perform each day, based on average hourly wage rates. Catalyst analysis of 2019 data from the Bureau of Labor Statistics and Bureau of Economic Analysis. Bureau of Labor Statistics, “Table 22: Persons at Work in Nonagricultural Industries by Age, Sex, Race, Hispanic or Latino Ethnicity, Marital Status, and Usual Full- or Part-Time Status,” Current Population Survey, Household Data Annual Averages 2019 (2020); Bureau of Economic Analysis, U.S. Department of Commerce, “Table 1.1.5. Gross Domestic Product (A) (Q),” National Income and Product Accounts (2020); Bureau of Labor Statistics, “Table B-3: Average Hourly and Weekly Earnings of All Employees on Private Nonfarm Payrolls by Industry Sector, Seasonally Adjusted,” Economic News Release (March 6, 2020); Cynthia Hess, Tanima Ahmed, and Jeff Hayes, Providing Unpaid Household and Care Work in the United States: Uncovering Inequality, (Institute for Women’s Policy Research, January 20, 2020).
  21. These figures account for the millions of dollars in unpaid labor women of color perform each day, based on average hourly wage rates: estimated at $4.3 million for Black women, $2.3 million for Asian women, and $7.1 million for Latinas. Catalyst analysis of 2019 data from the Bureau of Labor Statistics and Bureau of Economic Analysis. Bureau of Labor Statistics, “Table 22: Persons at Work in Nonagricultural Industries by Age, Sex, Race, Hispanic or Latino Ethnicity, Marital Status, and Usual Full- or Part-Time Status,” Current Population Survey, Household Data Annual Averages 2019 (2020); Bureau of Economic Analysis, U.S. Department of Commerce, “Table 1.1.5. Gross Domestic Product (A) (Q),” National Income and Product Accounts (2020); Bureau of Labor Statistics, “Table B-3: Average Hourly and Weekly Earnings of All Employees on Private Nonfarm Payrolls by Industry Sector, Seasonally Adjusted,” Economic News Release (March 6, 2020); Cynthia Hess, Tanima Ahmed, and Jeff Hayes, Providing Unpaid Household and Care Work in the United States: Uncovering Inequality, (Institute for Women’s Policy Research, January 20, 2020).
  22. Bureau of Economic Analysis, “Table 2.5.5: Personal Consumption Expenditures by Function,” National Income and Product Accounts (2019).
  23. Bureau of Labor Statistics, “Table 4013: Consumer Units of Single Females by Income Before Taxes: Average Annual Expenditures and Characteristics, Consumer Expenditure Survey, 2017-2018,” Consumer Expenditure Surveys, CE Tables, Cross-Tabulated Tables (2019).
  24. Bureau of Labor Statistics, “Table 25: Contribution of Wives’ Earnings to Family Income, 1970-2017,” Women in the Labor Force: A Databook (December 2019).
  25. United States Census Bureau, “Table F-22: Married-Couple Families with Wives’ Earnings Greater than Husbands’ Earnings: 1981 to 2018,” Historical Income Tables: Families (2019).
  26. LGBT Capital, “Estimated LGBT Purchasing Power: LGBT-GDP,” (2018).
  27. United States Census Bureau, “Table 1: Household Characteristics of Opposite-Sex and Same-Sex Couple Households,” 2018 American Community Survey (2019).
  28. United States Census Bureau, “Table 1: Household Characteristics of Opposite-Sex and Same-Sex Couple Households,” 2018 American Community Survey (2019).
  29. Michelle Yin, Dahlia Shaewitz, Cynthia Overton, and Deeza-Mae Smith, A Hidden Market: The Purchasing Power of Working-Age Adults with Disabilities (American Institutes for Research, April 2018): p. 11.
  30. Michelle Yin, Dahlia Shaewitz, Cynthia Overton, and Deeza-Mae Smith, A Hidden Market: The Purchasing Power of Working-Age Adults with Disabilities (American Institutes for Research, April 2018): p. 5.
  31. Barkley, The Power of Gen Z Influence: How the Pivotal Generation Is Affecting Market Spend (2018).
  32. In this study, researchers combined findings from Mintel (which was based on 2012 population estimates of ages 6-17) with their own findings (based on 2016 population estimates of 16-21). In other words, the study defines Generation Z as those born since 1995. Barkley, The Power of Gen Z Influence: How the Pivotal Generation Is Affecting Market Spend (2018).