US Economy

Are economic boycotts often more sizzle than steak?

Civil rights activists are experimenting with economic boycotts and business shutdowns to highlight racial issues that they say contribute to police violence. Yet some experts question the effectiveness of disrupting "business as usual" and say it could end up doing more harm than good.

As a part of its "Economic Shutdown 2.0" mission, the activist group Justice League NYC has advised supporters to spend their dollars at minority-owned businesses. The hope is to begin "shutting down business that are in our communities, but don't necessarily put resources back into our communities," according to Carmen Perez, co-founder of Justice League NYC.

"The system doesn't value black or brown lives, so they don't need black and brown dollars," added Cherelle Brown, an organizer with JLNYC.

Demonstrators and police in Ferguson, Missouri, August 17, 2014.
Getty Images

Still, economists have doubts about whether those tactics achieve the desired effect. When asked about the effectiveness of recent boycotts and business disruptions, P. Sergius Koku, an economist at Florida Atlantic University (FAU) who has studied consumer boycotts, said the plan could have a "backlash effect" if consumers feel inconvenienced.

"I'm afraid they may end up enraging customers or alienating potential supporters," Koku said. "If you don't frame the issue properly, and if you inconvenience those who support you, then your boycott or protest is going to fail."

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He pointed to the Montgomery bus boycotts of 1955, which helped to desegregate bus system in the South, as an example of a peaceful protest that was formed around an economic boycott. "They didn't inconvenience anybody and people decided it was worth their while to support," Koku said.

Last week, demonstrators in major cities across the county interrupted customers having brunch in places they described as "white spaces" to voice their outrage over police violence against blacks. The movement has garnered a mixed response at best, with some saying it portrayed the wider movement in a negative way.

"The message is clear that people of color are not being treated properly," Koku said, but protesting businesses at random makes the demonstrators appear vengeful. That is something he said could cause them to loss the sympathies of the larger population, he added.

'Bring awareness,' but history says success is slim

JLNYC has been cited as one of the most effective groups acting against police brutality, triggered by the police killings of Michael Brown in Ferguson, M.O. and Eric Garner in N.Y.

In December, the group shutdown flagship Apple and Macy's locations in New York, where they said some employees joined their protests.

"We went into their house to bring awareness of what's happening in black and brown communities, while they are still comfortable in their lives" Perez said. "We're using different tactics because we understand that we need to move on this in a holistic approach."

Separately, the organization is exploring a plan to bring on a wider economic impact and researching firms that support what it calls "insidious and awful practices" with hopes to "tie it into the conversations" about social injustices. Changes to the policing system are just the tipping point, but the larger issues involve making changes to socioeconomic structures which starts with "giving our business to certain companies and also boycotting certain companies," Brown said.

African-Americans have some $1 trillion in buying power and that figure is forecast to reach $1.3 trillion by 2017, according to Nielsen. JLNYC hopes to use that buying power to apply pressure.

Depending on the subject, economic boycotts have mixed results. Divestiture campaigns, such as those directed at South Africa in the apartheid era, have traditionally had the most impact. Meanwhile, campaigns against large corporations—such as BP for the 2011 Gulf Coast oil spill—can put pressure on share prices and prompt action from a company.

However, successful protests need wide backing, experts say. Scholars at The University of Pennsylvania's Wharton School of Business have argued that "if the goal is to get the target company to give in to boycotters' demands, the success rate is not high."

FAU's Koku said that in general, the success of economic boycotts depends on a number of factors, including their ability to gain the sympathies of the larger population.

"You can't just say, 'I am counting on black and brown people to support me and therefore we will bring business to their knees…. You have to count on everybody," Koku said.

Carl Dix, co-founder of Stop Mass Incarcerations, said injustices against black people, including racial profiling, mass incarceration and police violence, are all interconnected. His organization has incorporated that aim to use consumer buying power to elicit change in the criminal justice system.

He said African Americans' buying power is often cited as a useful tool, but his research shows that most of that spending goes toward necessities like rent, food, shelter and communications, which makes it harder to participate in consumer protests.

Applying economic pressure has worked in the past, but he said "you have to target it very well," Dix said.