In the aftermath of the COVID-19 pandemic control measures, the United States is now seeing the highest rate of inflation in nearly half a century. The current inflationary run is being widely blamed on the ‘progressive’ spending plans of the Biden administration by a host of centrist and Republican commentators, on the assumption that it is the White middle class that is bearing the brunt of the pressure.
However, much on the pattern of nearly all previous financial disasters in American history, research clearly indicates that it is the Black – and to a lesser extent, the Hispanic – communities that are suffering by far the most from the current contraction. So bad, in fact, that the Brooklyn chapter of Black Lives Matter is now considering community gardens as a feasible alternative to buying costlier groceries at the store.
Unemployment among Black individuals is habitually roughly double or more that of the national average in the United States. In fact, as The Hill points out, the ‘normal’ unemployment rate among the community would be considered a recessionary one among people of other races.
Black workers still earn $10,000 less than their White counterparts, not to mention their household wealth stands at a meagre one-eighth of the latter figure. It is no wonder that African-Americans would then be less ready for a sudden rise in the price of basic necessities than the average American.
But it is not just that the Black people earn significantly less due to centuries of systemic racism and government negligence. Black people, especially those without a professional degree or vocational skill set, are also more prone to be laid out or have their real wages reduced due to market disruptions; twice as likely as White individuals, in fact.
This outcome is largely explained by systemic patterns, but as Jhacova Williams of the RAND Corporation observes, Black people are more likely to face economic discrimination at all levels of education. The same is true to some degree of all the ethnic minorities in the country (except for Asians), which makes them especially vulnerable to inflation and economic downturns. An analysis by the Federal Reserve Bank of New York reached the same conclusion just two months ago.
Even assuming that Black and Hispanic people did not face systemic discrimination when it comes to employment or wealth, they would have still likely faced a higher impact of the current inflation. It is no secret that food and energy prices have risen the most after the Invasion of Ukraine. And it turns out that Blacks and Hispanics spend much more of their incomes on precisely these two items than the national average. Roughly 7.1 % of their post-tax income goes to energy, compared to 5.4 % for other communities, while they also spend 12.5 % of it on food, instead of the 11.1 % of other communities. The market price of both these items has been historically volatile, and the 2022 inflation cycle offers no exception.