While 27% of African-Americans and 26% of Hispanics have seen their debt increase in the past year, versus 18% of general market consumers, many are feeling optimistic about the future, according to new research by global market research firm Synovate.
To better understand financial behavior among multicultural consumers in the U.S., Synovate recently surveyed approximately 4,000 men and women ages 18+, including approximately 1,000 general market respondents, 900 African-Americans, and 2,000 Hispanics.
The survey was conducted via telephone among a nationally representative sample.
Along with increasing debt, ethnic consumers continue to lag behind the general market population when it comes to owning financial products and services such as bank and investment accounts, insurance, mortgages, and credit cards.
For example, 8 in 10 African-Americans and 63% of Hispanics currently own a checking account, versus 93% of the general market.
The ownership of a retirement account, such as an IRA or 401K, is even lower for multicultural consumers - 74% ownership among the general population versus 52% for African-Americans and 34% for Hispanics.
"On top of this, nearly a third of African-Americans and Hispanics say they are living from paycheck to paycheck, which is higher than what we see in the general population (22%)," said Claire Braverman, senior vice president of Synovate's financial services research group. "The challenging economy is difficult for everyone but is hitting African-American and Hispanic households particularly hard."
Despite increased debt, lower financial product usage and double digit unemployment levels for African-Americans (16.5%) and Hispanics (12.6%) (Bureau of Labor Statistics, April 2, 2010), many are looking towards the future with a sense of optimism.
When asked if their economic situation will be better, the same, or worse in the next 12 months, more than half of African-Americans and 42% of Hispanics surveyed felt that their situation would improve, versus one-third of the general population.
Furthermore, only 6% of African-Americans felt their economic situation would worsen... much less than the 14% of the general population who feel this way.
Why such optimism?
One factor could be the election of President Obama, and the Democratic Party continuing to make a concerted effort to gain the favor of Hispanics by addressing issues such as immigration reform and the appointment of Supreme Court Justice Sonia Sotomayor.
History and culture may also be factors as both African-Americans and Hispanics have had to overcome adversity in the U.S., albeit through different paths.
"The purchasing power of African-Americans and Hispanics combined will be almost two trillion dollars in 2010. Clearly marketers have a rich opportunity to tap into this optimism and channel it into successful marketing of their products and services targeted to the multicultural market," said Denise Marks, vice president of Synovate's diversity research group and lead author of Synovate's 2010 U.S. Diversity Markets Report.
"Recognizing the growing importance of this diverse market - 42 million African-Americans and 48.7 million Hispanics - and using culturally relevant communications to address the current sentiment can go a long way in bridging the gap of financial product usage among these multicultural consumers," said Marks.
For more information on Synovate visit www.synovate.com .
Chicago - 8th April 2010