Cost of Living Crisis Hits Black and Minority Ethnic People Hardest

Cost of Living Crisis Hits Black and Minority Ethnic People Hardest

New research exposes how black and minority ethnic households are more likely to be in deep poverty and fuel poverty than their white peers, report Sian Norris

More than a quarter of people living in ‘deep poverty’ are black and minority ethnic, despite only making up 15% of the UK population, new analysis from the Runnymede Trust reveals today.

The race equality think-tank has found black households are more than twice as likely to be in deep poverty than their white peers, while Bangladeshi families are three times more likely than white people to be struggling in this way. 

Deep poverty refers to those who are more than 50% below the poverty line and therefore unable to afford the most basic essentials such as food and heating.

The findings come as the cost of living crisis continues to push low-income households into poverty, with inflation soaring and energy costs on the rise. The Government is currently debating whether to increase means-tested benefits in-line with earnings or inflation – the former would represent the biggest permanent real-terms cut to the basic rate of benefits ever made in a single year” according to the Joseph Rowntree Foundation.

Measures are now in place to help families who are struggling to pay their energy bills. However, even with this support, black and minority ethnic households are disproportionately likely to be in fuel poverty. Just under a third (32%) of white families are expected to fall into fuel poverty this winter – compared to half (52%) of black and minority ethnic households. The number rises to 66% for Bangladeshi and Pakistani households.

“The growing rates of poverty outlined in our briefing, in the world’s fifth largest economy, are simply unconscionable,” said Dr Halima Begum, CEO of the Runnymede Trust. “We talk about this cost-of-living crisis in universal terms. No one is immune from the consequences. However, what’s clear from this research is that some groups are less equal and more impacted than others, including our black and minority communities”. 

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Racialised Austerity

This crisis follows more than a decade of austerity measures which have been “highly racialised” says the Runnymede Trust. 

The changes to tax and social security systems implemented by successive Conservative-led governments have meant that white families receive £454 less a year on average in cash benefits than they did a decade ago. However, black families receive £1,635 less in cash benefits on average every year – a much larger drop in income. 

While it is true that in the past 25 years, the number of black and minority ethnic households living in relative poverty shrank, the bulk of this change took place under the New Labour governments between 1997-2010. Since the global financial crisis in 2008, however, progress on closing the racial economic inequality gap has stalled. 

Over the past decade, average incomes for black and minority ethnic people living beneath the poverty line have fallen faster and deeper than they have for white people – six percentage points compared to one percentage point. 

“This report shows that past economic crises have increased racial inequalities below the poverty line,” explained Dr Daniel Edmiston, lead report author and a lecturer in social policy at the University of Leeds. “As we head into a new crisis of living standards, targeted and tailored support is urgently needed to ensure ethnic minority people don’t fall further behind. A failure to learn lessons from the past will result in a growing economic gap, disproportionately increasing the risk of deep poverty amongst many black and minority ethnic households”.

The pandemic is also to blame for exacerbating existing inequalities. According to the Runnymede Trust research, black and minority ethnic households were disproportionately affected by labour market disruption during the successive lockdowns. Black and minority ethnic workers, particularly Pakistani and Bangladeshi men, struggled with fewer employment protections and faced a much greater likelihood of job and income loss.

The hostile environment has also helped to deepen inequality, as reported by this paper. Migrant people with ‘no recourse to public funds’ have been cut out of state support during both the COVID-19 pandemic and the current cost of living crisis. A total of 82% of those with no recourse to public funds are from a black and minority ethnic background. 

“The pandemic made abundantly clear that when a crisis hits, support needs to be targeted urgently towards those who will be worst affected, usually those at the intersection of multiple structural inequalities,” said Dr Begum. “More must be done not just to stave off but to reset the economy in light of a catastrophe that is snowballing, fast”.

“In funding the energy price cap through public borrowing, offering tax cuts for the wealthiest and lifting the cap on bankers’ bonuses, the Government is doing little to demonstrate its willingness to prioritise the solutions that will be increasingly and desperately needed by our multi-ethnic working class,” she added. “Without continued and significant public investment in social security and infrastructures, and tailored commitments to job security and fair wages, black and minority ethnic communities in particular will continue to face hardships unknown for generations”.