Cost of living crisis is hitting ethnic minority professionals harder than their white colleagues

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Ethnic Minority Professionals Hit Harder – Cost of Living Crisis

Natalie Morris; Wednesday 1st June Metro Newspaper

The cost of living crisis is hitting everybody hard right now.

But, unsurprisingly, it is the most marginalised people in society who are being left to suffer some of the worst consequences.

New research from networking group People Like Us and Censuswide has revealed that the rising costs of living are affecting a huge proportion of UK workers, with almost half of employees (49%) are now living from pay cheque to pay cheque, and just over half now saving no money every month (53%).

More than a third – 34% – of professionals from racially diverse backgrounds say their salary won’t cover their mortgage, rent and energy bills (while 27% of those from white backgrounds said the same).The research was conducted by Censuswide, among a sample of 1,200 UK working professionals over the age of 16, nationally representative on age, gender and region.

Over a quarter of all those surveyed (28%) and over a third (34%) of those from ethnic minority backgrounds are now no longer able to afford to pay their bills, rent or mortgage each month. This has led to over a quarter of professionals from minority backgrounds are even thinking about moving back in with family (29%). 

Working professionals from racially diverse backgrounds are nearly twice as likely to have been told they won’t be getting a promised pay rise this year due to inflation (19% compared to 10% of white professionals), and are now twice as likely as white professionals to think the current economic situation will increase the ethnicity pay gap (25% vs 13%).

This has led to 35% of ethnic minority professionals being forced to rack up extra debt by taking out loans or spending on credit cards, and nearly a third 31% borrowing money from family.

Work-life imbalance

In terms of work, 73% of those surveyed feel that rising costs are affecting their work life in some way – which rises to 85% of workers from minority ethnic backgrounds. Over a quarter (28%) say it is affecting their performance at work, and people from a minority background are more likely to feel this effect (36%). 

More than one-in-five employees from a minority background (22%) feel like they may have to change their job as they are unable to cover their living costs, this compares to 16% of the broader population. Around a fifth of employees are also considering taking a second job to cover mounting costs (21%). 

The stark ethnicity pay gap

The realities of the ethnicity pay gap in the UK are hard to uncover due to the fact that companies are not required to publish this data, however a study by People Like Us earlier this year found that people of colour could be being paid up to 16% less than white colleagues.

The recent study found that two thirds (67%) of racially diverse working professionals said they have had reason to believe a white colleague doing the same job as them was on a higher salary. A quarter said they suspect the disparity in pay was up to £5,000, meaning people of colour could be losing out on £255,000 of earnings in a working lifetime due to the stark racially ethnic pay gap.

Out of those from racially diverse backgrounds who struggled to ask for a salary increase or promotion, over a quarter (26%) left their industry because they weren’t given a pay rise they felt they deserved while half (50%) said not getting a salary increase or promotion has caused them to suffer with anxiety or depression. 

Pay and job security 

According to the data, people from a minority background are almost twice as likely (19%) to have had a promised promotion taken away than their white colleagues (10%), based on rising costs for their employers. Job security feels more at risk for those from a minority background too, with less than a third feeling their employment will be unaffected by rising prices compared to nearly half of white professionals (46%). This has led to 25% of people from a minority background thinking that pay gap issues within their company will get worse.

There is therefore a very real possibility of thousands of Black, Asian, mixed race and minority ethnic professionals getting into more debt due to inequitable pay practices during the cost of living crisis. Action is being taken by some to tackle this issue. Around a quarter of respondents said their employer (25%) had increased salaries based on rising inflation, but less than one-in-five have received help from the government (19%). 

Last week, the government announced a £400 energy grant which comes into action from October 2022. But for many, this will barely scratch the surface. Sheeraz Gulsher, co-founder of People Like Us says: ‘It’s heartbreaking to see the devastating effect the cost of living crisis is having on people from all over the UK. But it isn’t affecting everyone equally.

‘In these tough moments, it is really important not to let equity fall off the priority list, particularly when this data shows that this crisis is affecting those from minority backgrounds significantly more.’ Sheeraz says his organisation is now asking the government to reconsider making ethnicity pay gap reporting mandatory for companies.

‘It will truly create huge strides in making a fairer and more equal society,’ he adds. ‘We are also asking all HR leads, payroll professionals, CEOs and business leaders to measure their pay gaps using the free tool on our website, it’s a simple exercise that will genuinely help foster equality in companies of any size. 

‘In this difficult moment, when you consider that people from diverse backgrounds are already getting paid less than their white counterparts, we think the People Like Us mission to create fair, equitable pay and transparency across the UK workforce is more crucial than ever.’

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