Buying into the dream

By Timothy Pratt

Monday, Sept. 4, 2006 | 7:42 a.m.

Alan Chen noted with slight amusement that it costs a customer about four times more to ship fist-sized bottles of sugar water to China than it did to buy them down the street on Spring Mountain Road.

Of course, he was more than happy to pack them in foam peanuts and send them on their way. He had satisfied another customer in his 6-month-old storefront business, One Stop Shipping.

Sitting in the back of his shop, a Chinese calligrapher's work framed on a wall, Chen, a young but savvy entrepreneur, wasn't surprised to see the results of a study released Friday: Nevada tops the nation in the rate of growth of disposable income among its Asian residents during the last 15 years.

That growth - a whopping 762 percent - is made even more impressive by the fact that the statewide Asian population grew only by about half that - 382 percent - since 1990.

Asians are also Nevada's only minority group to spend on a par with their population, according to the study. Asians accounted for 6.5 percent of spending here in 2005, matching the group's share of the total population.

Nationally, according to the study, much of Asians' buying power is used for food, housing, small appliances, telecom services, education and personal insurance.

Shop owner Chen, however, is not so sure he agrees with study author Jeffrey Humphreys, director of the Selig Center for Economic Growth at the University of Georgia, about what this all means.

Humphreys predicts that the financial health of the state's Asians is a good indicator of their future political power.

"Asians don't have any political clout" in Nevada, Chen says, and he doesn't see that changing anytime soon.

For other minority communities in Nevada, the study brought mixed results.

Blacks and Hispanics here also ranked first nationally in the growth of their buying power since 1990, at 449 and 748 percent, respectively. The black population grew 142 percent during that period, while the Hispanic population grew 366 percent. (White buying power during the study period increased 254 percent, while the white population grew 89 percent.)

Despite the impressive increase in dollars spent by blacks and Hispanics, their disposable income is still not on a par with their percentage of the state's population, the study says.

Humphreys cites different reasons for these gaps.

The gap in blacks' buying power may owe to lower percentages of people earning high school and college degrees, as well as what he calls "the legacy of discrimination," including a "shorter period of time building wealth."

For Hispanics, he attributes the disparity to a large number of recent immigrants, many of whom are not highly educated and who work jobs without much room for advancement.

Over at the Expertise Cosmetology Institute on Stella Lake Street, near Vegas Drive and Martin Luther King Boulevard , owner Gwen Braimoh made the link between spending habits and the gap between the black population and its buying power in 2005 - 7.2 percent of Nevada's population but only 5.9 percent of the state's disposable income.

Her business also has an air of newness to it. It has been open only a week, and a bag of Pay Dirt potting soil still sits unopened in the parking lot. Blueprints are unfolded across a desk in the lobby.

Braimoh, like Chen, considers her business a pioneer of sorts. Both say they are the first in their neighborhoods.

She has nine teachers, 15 total employees and about 47 students, most of whom are black or Hispanic.

She looks at a chart in the study labeled, "Where Blacks Spend More," followed by a list: phone services, utilities, apparel, footwear, housing and groceries.

"That means they're not buying property, investments and would spend on a cell phone before an educational fund," she says.

Braimoh, who is black, notes that she takes the opposite tack with her own daughters and started a college fund for her 9-year-old.

"Our dollars go to a lot of luxuries," she says. "If we put our money where it has to be directed, we would have more power, more assets. Clothes, cell phones (and) $150 tennis shoes are not assets."

Across town, Tony Sanchez, immediate past president of the Latin Chamber of Commerce, is heartened by the ongoing growth among Hispanics and let loose a list of contributing factors: Small Business Administration loans, casinos hiring and entering into contracts with more Hispanics, and banks pursuing Spanish-speaking customers.

He also credits a local "explosion" in Spanish-language media during the last five years, for "educating folks on spending issues."

While Hispanics make up 23.7 percent of the state's population, their buying power is only 13.8 of the state's total, according to the study. Hispanics nationally spend most of their disposable income on groceries, phone service, major appliances, vehicles, children's clothing and footwear. They spend less on health care, entertainment, education, personal insurance and pensions.

Sanchez took his own lesson from the figures. Though they could be used by anyone interested in marketing to Hispanics to determine "what they care about (and) how much they're spending," he sees the issue as one of civil rights and the progress of a people.

"Spending is not the issue," he says. "It's economic advancement, especially the role of education as the means to advancement."