For Black and Latino families, inflation can hit even harder
For Black and Latino families, inflation can hit even harder
The Federal Reserve Bank of New York came out with a new report on inflation inequality on Wednesday showing that the high prices we’ve been seeing lately aren’t hitting everyone the same way. People of color and low-income workers, for instance, often find inflation a bigger problem than their counterparts at the higher end of the income spectrum.
Tammie Gates, 47, figures she spends more than one-third of her income feeding herself and her two kids. Her monthly grocery bill about doubled during the pandemic to as much as $500 a month.
“And you would see that number and think, ‘Oh my goodness, you’re buying a lot of groceries.’ But not really,” Gates said.
Gates is African American and a single mom in Jacksonville, Florida. She makes $42,000 a year in a sales job and spends roughly $50 a week on gas. A year ago, she had to move after a private investor bought her building and raised the rent from $950 to $1,600 a month.
“He had the opinion that even that was low,” she said. “So I felt like even from there, he could go higher.”
The New York Fed report found that Black and Latino households dealt with higher-than-average rates of inflation over the past few years. That’s because consumers like Gates spend a bigger proportion of their budgets on the necessities that were hardest hit by inflation, according to Gary Hoover, an economist at Tulane University.
“Housing costs, food costs and transportation — which is going to be the majority of the budget, and you can only stretch that so far,” he said.
The Fed’s cure for inflation — higher interest rates to cool off the economy — can also disproportionately affect people of color, per Century Foundation senior fellow Julie Kashen. That’s because they’re more likely to work in service jobs.
“For example, restaurant, retail — those are some of the sectors that are going to be impacted first, because if people are not spending money to go to restaurants and people are not shopping, then people who work in those places are going to be impacted,” Kashen said.
And Kashen said that if those workers did lose their jobs, it would be more expensive for them to borrow money to make ends meet.
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