During the Civil Rights era many businesses, especially in the south, started to experience economic loses due to not just blacks but whites also boycotting businesses. Boycotting a business due to segregation, was a peaceful way of demonstrating against that business. It actively encouraged town leaders to negotiate with Civil Rights leaders to remove segregation and ensure that businesses didn't declare bankruptcy.
The first example of this was in 1955 when Rosa Parks was arrested for refusing to give her seat to a white man. In protest, a boycott of the buses by black Americans in Montgomery began. It was probably the first example of the economic clout that the community had because eventually, the bus company had to desegregate their buses or face serious financial difficulties as very many black Americans used the buses. Without their economic input via fares, the bus company of Montgomery faced probable bankruptcy. With this the bus company desegregated its company. This led the way for further boycotts in Birmingham and Tennessee.
Negroes' boycott cripples bus line : this was a newspaper article that appeared in the New York times in 1956
In 1960, Nashville Tenessee, students from three universities began sit-ins in various stores with the purpose of desgregating lunch counters. After two weeks the owners closed the counters without serving anyone. During the next three months, sit-ins also occured in Greyhound and Trailways bus terminals. Whilst the students themelves were peaceful, the same can't be said for certain members of the white population and violence soon erupted. With the increase in violence more and more white people were staying away from the downtown shopping district.
In 1963, Martin Luther King and the Southern Christian Leadership Conference (SCLC) joined with Birmingham, Alabama’s existing local movement, the Alabama Christian Movement for Human Rights (ACMHR), in a massive direct action campaign to attack the city’s segregation system by putting pressure on Birmingham’s merchants during the Easter season, the second biggest shopping season of the year. Again this use of non violent protest lead to the white business structure weakening under the adverse publicity and the unexpected decline in business due to the boycott led to the Attorney General Robert Kennedy sending his civil rights assistant to facilitate negotiations between prominent black citizens and the city's business leaders.
During 1965, Martin Luther King was promoting an economic boycott of Alabama products to put pressure on the State to integrate schools and employment. In an action under development for some time, Hammermill paper company announced the opening of a major plant in Selma, Alabama; this came during the height of violence in early 1965. On February 4, 1965, the Company announced plans for construction of a $35 million plant, allegedly touting the "fine reports the company had received about the character of the community and its people."
In this speech Martin Luther King talked about the need to “redistribute the pain” when boycotting Corporate America. This means that when you have mass protests and marches, you also have to have Economic Boycotts to put pressure on your adversary. The mass protest draw attention to the problem, galvanize support around the issue so you can then bring people into your plan of action.