Americans have more to spend than ever before - $6.5 trillion, to be exact - and Asian Americans' disposable income is growing at a faster rate than every other group.
According to the Selig Center for Economic Growth, a research organization at the University of Georgia, Asians' percentage of U.S. disposable income has risen from 2.9 percent in 1990 to the current level of 3.5 percent, or $229 billion. In fact, this group broke new ground each year between 1990 and 1999, with a compound annual growth rate of 8.1 percent, for an increase of $116 billion. While African Americans and Hispanics added $225 billion and $176 billion, respectively, to their 1990 buying power base - they could not outpace the 102 percent growth rate set by Asians over the past nine years. The national average was just under 57 percent. It is important to note that Asians also comprise a substantially smaller share of the total U.S. population - 10.9 million, versus 35 million African Americans, 30.5 million Hispanics (who may be of any race), and 224.1 million whites.
Aggregate buying power is highest in California, where Asian residents earn $79.9 billion annually. New York ($24.4 billion), Hawaii ($16.8 billion), New Jersey ($13 billion), and Texas ($11.3 billion) round out the top five. Although the Asian market is highly concentrated in these states, it is more evenly distributed nationally than the Hispanic market. Specifically, 64 percent of all Asian buying power is found in the previously listed states, whereas the five states with the largest Hispanic consumer markets make up 71 percent of that group's national buying power. Only 38 percent of African American buying power is found in the top five states.
But Asian wealth is spreading. The highest percent growth occurred in Vermont (198 percent increase), Nevada (188 percent), and North Dakota (184 percent). The total Asian population in these three states (96,548) is a mere 2.4 percent of California's Asian population (4,104,573), yet their markets are flourishing, reports the Selig Center.
Much of the increase in buying power can be attributed to the rapid growth of the Asian population during the past decade. Due to a 44 percent increase in population, Asians now comprise 4 percent of the U.S. population. But there are some surprises hidden within the data. In Hawaii, for example, Asians and Pacific Islanders account for 63 percent of the population, but claim only 58 percent of the state's buying power. California and New Jersey also have substantial percentages of Asian residents - 13 and 6 percent respectively - but they control 9.3 percent and 5.3 percent of those states' disposable income.
Meanwhile, in six states - West Virginia, Ohio, Indiana, Kentucky, Delaware, and Michigan - Asian's share of spending is greater than their share of the population. In West Virginia, for example, Asians constitute barely 0.5 percent of the state's population but 1.2 percent of its disposable income. Only 1 percent of Ohio's population is Asian, yet they control 1.5 percent of the state's spending power.
The Selig Center cites high levels of educational attainment and a young working population as factors that will continue to push Asian buying power upward in the next millennium.