For decades the narrative that the dollar only circulates for six hours in the Black community compared to dozens of times in others, like the Jewish and Asian communities, has been perpetuated.
It’s a statistic that countless financial experts and wealth advisors have quoted in hopes of encouraging Black people to support Black businesses more frequently.
But is it true?
Financial Wellness startup “Of Color” and an investigative report by Howard University publication Truth Be Told say no.
Of Color is a financial wellness startup whose mission is “to improve the financial lives of employees of color.” In a blog post, it said the statistic is a myth first started by author Brooke Stephens in her 1996 book, “Talking Dollars and Making Sense: A Wealth Building Guide for African-Americans.”
However, Stephens doesn’t provide any factual information about the study she cites as her source.
“This statistic has often been used to show how little we spend in our neighborhoods compared to other racial and ethnic groups in the U.S., and imply that were we to simply ‘buy local,’ as if we don’t already in the first place, many of our problems would simply disappear,” Of Course wrote.
“However it’s worth noting that the source of this figure is sketchy at best, the book’s author Brooke Stephens never mentions the name of the study nor provides any information about the author,” Of Color continued. “Experts suggest it’s simply an urban myth, and a destructive one at that.”
Stephens isn’t the only one to tout the six-hour stat. From notable figures like Roland Martin and Boyce Watkins to institutions like Greenwood Bank, the six-hour circulation narrative is often cited when discussing wealth within the Black community.
In a 2011 news article about Black spending power, the Victoria Advocate said the dollar only circulated once in the Black community compared to nine times in the Asian community and countless times in the white community.
The article cites a study from the University of Georgia’s Selig Center for Economic Growth as the source of the data, however, it does not include a corresponding link to the study.
Of Color says it’s because the data and corresponding narrative that Black people don’t want to support their own isn’t true.
The organization is one of many questioning the accuracy of the claim.
Madison said she was unsuccessful as the Federal Reserve, Small Business Administration, nor private research organizations like Nielsen published data on dollar circulation within communities.
She also said when she reached out to the Selig Center at UGA about the study the 2011 article cited, its director Jeffrey M. Humphrey said, “I’ve never heard that. It’s not from our center and it does not sound accurate, but I’ve got no idea what the actual number are.”
AFL-CIO Chief Economist and Howard Professor William Spriggs said no one had proven the six hours narrative.
“It’s what I consider an urban myth,” Spriggs said. “What makes me suspicious is that it has economic data based on religion when the federal government doesn’t collect any information by religion. Where would you get that from?”
“When you say Asian communities you’re talking about a very diverse population that includes Indians, Chinese, Japanese, Koreans and they are all different and not a monolithic community. It would be a mistake to try to include all of these different people under one umbrella to talk about spending in communities,” Spriggs continued.
Truth Be Told also interviewed wealth experts, including Stephens and Maggie Anderson, the latter of whom said Stephens’ book is the foundation of her work.
Anderson cited Stephens and Stephens cited someone named “John Wray” as the author of the study she based the six-hour data on in her book.
However, in an interview with Truth Be Told, Stephens could not remember the study’s name and had no information on Wray, other than saying she thought he’d taught at Howard University in 1993.
The university has no record of Wray.
“TruthBeTold.news also reached out to other black economic development advocates who have cited the figure and while many of them had heard of the numbers, not one had actually seen the study that produced them,” Madison wrote.
It is an important fact that caused Justin Wolfers, an economics professor at the University of Michigan, to echo Spriggs’ sentiment.
“It seems highly improbable that you could get this data the way it’s described,” Wolfers said. “The inclusion of religion data alone makes me question the figures.”
In the end, no one has been able to substantiate the statement that the dollar only circulates six times in the Black community with a tangible study.
For this reason, some working in the financial and wealth-building space are calling for it to be dismantled as a talking point.
“The myth of the black dollar has been weaponized and used against people of color to show a lack of restraint and commitment to our communities for too long,” Of Course wrote. “It’s long been time for this myth to be dismantled, and let’s work to shout this truth loud enough to drown out the pervasive lie.”
Spriggs said he understands the motivations behind the myth, but rejects using falsehood to get a message across.
“I understand where people who use this figure are coming from and I don’t want to downplay the issue, but you don’t solve the problem by using questionable data,” Spriggs said.