In today’s marketing environment, a great amount of time and money has been spent researching how companies can better reach their targeted consumers. Products and services are tailored to specific consumer groups to increase sales and grow businesses. As a result, businesses far and wide save money in the long run and better serve those who need them the most. In the business world, these advances are viewed as a victory for all involved. But as has been the case with many recent advances, those on the left – always in search of a quarrel – have found a way to be offended.
In their latest study “Advertising Injustices: Marketing Race and Credit in America," Professor Jim Hawkins and student researcher Tiffany Penner attempt to point out instances of unfair advertising practices. They conclude that U.S. financial service providers discriminate and their basis for making this determination is by assessing the number of minorities on their websites. They note that since African Americans account for 16 percent of auto title lending customers and 23 percent of payday lending customers, while about 35 percent of their combined website photos depict African Americans in their advertisements, these lenders are predatory against minorities.
In contrast, they observe that some 30 percent of mainstream banks don’t use blacks or Hispanics in their ads. They theorize that this advertising disparity is the reason minorities are more likely than white people to take out a high interest loans, and less likely to pursue credit from mainstream lenders.
Apparently, this passes for scholarship these days.
Are banks really in the business of oppressing minorities? To quote noted economist Thomas Sowell, “Implicit in the equating of statistical disparity with discrimination is the assumption that gross disparities would not exist in the absence of unequal treatment.” In other words, the existence of disparities alone is not evidence of discrimination.
Let's just set the stage with a few facts. The racial makeup of the United States is one giant disparity to begin with. According to the 2020 U.S. Census, The United States is now 57.8 percent white, 18.7 percent Hispanic, 12.4 percent Black and 6 percent Asian. And the majority of the minority population lives in lower income areas.
These facts alone are enough to enrage many on the left. Especially those with public platforms. A quick search of “America is too white” on Google will bombard you with anti-white sentiments links: for example, The Economist: “White Americans are Beginning to Realize That They Too Belong to a Race.”
Unfortunately, the ideology of those conducting research highlighting disparities in America starts with a false premise. Their research is conducted not to explore disparities and find the cause, but to find ways to attribute discrimination by whites to any disparities they can find.
It is not racist to advertise directly to the audience that is more likely to use your business. That is smart. On the other hand, making it harder for minorities to have access to non-collateralized loans the way progressives want is bad for blacks, and dumb.
Remember, high interest loans are used in situations when those seeking the loan have poor or insufficient credit history. Generally speaking, Americans – regardless of race – who live in low-income areas are more likely to fall into that category.
The study says Latinos and African Americans are more likely to take out unsecured loans. Could that be why payday lenders are depicting more Latinos and African Americans in their advertising? Or perhaps that could explain why the majority of payday lenders in America are where their customers are? Would a payday lender thrive in an area where almost all of the population uses traditional forms of credit? Probably not.
But this isn’t racism! As stated above, it is smart business.
The irony should not be lost – a study that purports to identify racism may actually be perpetuating it by having so little regard for the intelligence of black consumers. In this view, their cognitive skills are assumed to be limited to only making decisions based solely on the skin color of those they see in ads.
In reality, minorities take into account the wealth of information available outside of advertising. Advertising serves only as a tool to inform consumers which products exist in the marketplace. The internet further provides review sites, research information, library access, YouTube, Facebook, and TikTok influencers, etc.; access that makes the most uneducated more informed than even the most scholarly predecessors were years ago. Investigating information, analyzing data and coming to the best financial decisions for their unique circumstances is well within the grasp of minority groups.
Instead of labeling minorities as victims, ineluctably drawn to an advertisement with models that match their skin color, whether they need the service or not, we need to focus on what matters most. Teaching our next generation – black, white, or brown – sound financial principals, encouraging two-parent households (statistically proven to drastically reduce poverty), and promoting the importance of hard work. These values empower every individual who makes the choice to live by them, regardless of race. Attacking the financial choices of adults is worse than offering no solutions.
People, regardless of race, enter into financial transactions for a myriad of reasons. Pretending that the existence of non-collateralized loans are somehow racist ill-serves needy communities and ignores their ability to make decisions about their own lives.
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