Falling faster amidst a cost-of-living crisis
The rising cost of living in the UK is a social emergency, but not one that is being uniformly felt. So far, analysis of its impact has tended to talk in quite universalised terms and remains relatively indifferent to the racial inequalities that place minority ethnic groups in much stronger headwinds amidst soaring inflation and a stalling economy.
In this new briefing for Runnymede Trust, Shabna Begum, Mandeer Kataria and I outline the racial inequalities that structure a disproportionate exposure to and risk of (deep) poverty amongst minority ethnic people today. Drawing on the latest available data we found that:
Black and minority ethnic people are 2.5 times more likely to be in poverty than white people, with racial inequalities most pronounced in Wales, Scotland, Northern Ireland and Yorkshire and the Humber.
Progress towards closing the economic gap between white people and minority ethnic communities has stalled since the 2007-08 global financial crisis. Beneath the poverty line, average incomes for Black and minority ethnic people have fallen faster and deeper (by six percentage points) than they have for white people (by 1 percentage point) over the last decade, with this becoming particularly pronounced since the start of COVID-19.
As a result, minority ethnic people are heavily over-represented amongst the lowest-income groups and currently experience much higher levels of food insecurity, material deprivation and fuel poverty. For example, 1 in 10 white children experience food insecurity compared to 1 in 4 Black children.
Despite only making up around 15% of the population in the UK, more than a quarter (26%) of those in ‘deep poverty’ (i.e. more than 50% below the poverty line) are from a minority ethnic background and make up a growing share of those on the lowest incomes. As a result, Black and minority ethnic people are currently 2.2 times more likely to be in deep poverty than white people, with Bangladeshi people more than three times more likely.
Over the last decade, changes to the tax and social security system have been highly regressive, but also racialised. In real terms, white families now receive £454 less a year on average in cash benefits than they did a decade ago. But this rises to £806 less a year for Black and minority ethnicfamilies and even higher to £1,635 for Black families. Black and minority ethnic women have been some of the worst affected and currently receive £1,040 less than they did a decade ago.
These developments have left many Black and minority ethnic households disproportionately exposed to the current cost-of-living crisis. In nominal and relative terms, the ‘Energy Price Guarantee’ announced earlier on this month will lift more white households out of fuel poverty than Black and minority ethnic households. As a result, just under a third (32%) of White people are likely to experience fuel poverty this Winter compared to more than half (52%) of Black and minority ethnic people (rising to two thirds (66%) of Pakistani and Bangladeshi people).
Black and minority ethnic people were most affected by the economic shocks associated with the 2007-08 global financial crisis and COVID-19. As we head into a new crisis of living standards, a renewed and reimagined commitment to protecting those in the deepest forms of poverty is needed if we are to close the economic gap and achieve racial equality. You can read the full briefing here.