As the Cost of Living Rises, Black Families Disproportionately Struggle

Interest rates are rising to combat pandemic-related triggered inflation. But income and wealth disparities leave Black communities vulnerable and struggling to afford everyday expenses.

Mom and daughter pick out apples in supermarket
Photo: Getty Images

If you dreaded trips to the grocery store before, shopping for your essentials has probably felt even more overwhelming in the past few months. Inflation is up a staggering 8.6%. It's the highest rise in prices our country has seen in four decades. And while one can argue that inflation is having its negative consequences for families worldwide, Black families, in particular, will suffer the brunt of the unstable economy. And while efforts to improve things are in progress, there's no end in sight.

The Federal Reserve has raised interest rates three times since March—and it's forecasted three more interest rate bumps will come in the first three quarters of 2023. The global pandemic raised inflation to the highest rates in 40 years. The goal of raising those interest rates is to combat inflation with the hopes of making people slow down their spending, eventually bringing down demand. President Joe Biden has also called on Congress to pause federal gas taxes for three months to mitigate these rising expenses.

Yet and still, economists fear that higher unemployment rates and a recession are looming. Experts say high inflation rates impact those who spend most of their money on daily costs of living expenses like gas and food disproportionately. And disparities in wealth and income leave Black communities struggling to make ends meet.

The Black-white wealth gap isn't new. History shows that the head start many white Americans have can be traced back to the slave trade and continued through the Great Migration up to the 20th century. Pre-pandemic, Black families had one-tenth of the net worth white families had. With all of this taken into account, the current cost of essentials such as food, gas, and even housing will leave many Black Americans making decisions no family should ever have to make.

According to a federal survey of consumer finances in 2019, the median wealth of white families was $188,200 compared with only $24,100 for Black families. Factors attributing to this include financial assistance white families can often access from their parents, like passing down gifts and inheritance, and more reserved money invested in children's education. All of these increase their children's ability to accumulate wealth.

Many believe the government is responsible for ensuring that the people can access reasonably priced goods in their communities. However, community advocates often take on the responsibility of caring for those in need. Atlanta-based nonprofit Hosea Helps has seen a 40% increase in families needing assistance with food. CEO Elizabeth Omilami also shared that she is overwhelmed with requests from people needing assistance paying their rent.

Those with less income and wealth see the greatest impacts on their spending power. This is because with less income there's a greater likelihood of fewer savings. Many families are forced to tap into those savings to pay for things like food, gas, and energy. Gone are the days when the average family can save up for a rainy day or a vacation —two-thirds of Americans live paycheck to paycheck.

Black Americans make up a disproportionate amount of that statistic. Black families are concerned with pulling together that "extra" $75 to fill up on gas just to be able to get back and forth to work for the week or afford rising grocery prices. This is harder for families who don't live where there are barriers to finding affordable healthy foods.

One out of every five Black families lives in a food desert, according to a 2021 report. That means these communities have less access to grocery stores and farmer's markets. This leaves families that live in these communities to make one of two choices. They can shop at local convenience stores, which are known for pricing items higher. Or they can drive further for healthy, reasonably priced grocery alternatives. And in a time where everything costs more, this puts a strain on Black families who are already struggling.

The consequences of rising inflation are the latest example of a well-known truth: it costs more money to be poor. Now, families are placed in a position to decide between buying medication and keeping their utilities. Unfortunately, more households will likely face these hard decisions in the future.

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