As inflation soars, black Americans bear the brunt of rising grocery, gas and housing prices

Johnson said she was trying to save money by cooking more at home and packing her husband’s lunches instead of eating out. The Metro Atlanta couple have put off buying a home after seeing real estate prices soar last year. Johnson, an elementary school teacher, is also worried about being able to afford childcare costs that are becoming increasingly expensive nationwide.

“I’m just worried about the quality of life,” Johnson, 33, said. “You already have nerves about being a new parent. And then you may have all the economic downturn coming and that can create some anxiety.”

Like many black families, Johnson and her husband are bearing the brunt of inflation – with prices hitting the highest rates the United States has seen in more than 40 years. Researchers say black families will suffer the worst effects of rising inflation as they lag behind their white counterparts in income, wealth, financial savings and home ownership.

The disparity leaves many black Americans without funds to help offset rising consumer prices and puts greater pressure on their monthly income, economists say. Some economists worry that if lawmakers don’t act quickly to tackle inflation, black families could be forced to go without necessities as the threat of another recession looms.

“It’s going to be extremely devastating,” said William Darity Jr., a professor of public policy, African American studies and economics at Duke University. “People will have to make very, very difficult decisions about whether or not to buy medicine or buy food or forgo paying for their utilities. This will have adverse effects on people’s well-being. “

Darity said the country’s wealth gap has made it difficult for black families to maintain financial savings or transfer wealth across generations, as many white families have been able to. He said racist policies such as redlining and depriving former slaves of the lands they were promised have historically left black Americans behind.

According to the Brookings Institute, the median wealth of a white household is $188,200, which is 7.8 times more than the average black household at $24,100. In 2019, the homeownership rate for white Americans was around 73% compared to 42% for black Americans.
Darity urges lawmakers to implement a federal jobs guarantee that would provide employment with decent pay and safe working conditions to every adult who seeks employment. It would help black families stay afloat, Darity said.
President Joe Biden insists fighting inflation remains a top priority for him, but he faces an uphill battle with a tightly divided Senate that has blocked most of Biden’s national agendas.

“The problem is, the Republicans in Congress are doing everything they can to stop my cost-cutting plans for ordinary families. That’s why my plan isn’t done and why the results aren’t done either. “, Biden said earlier this month.

A disproportionate impact on black families

Some research suggests that black households are more sensitive to changes in inflation than white households.

A study released by the Federal Reserve Bank of Minneapolis found that basic necessities such as groceries, electricity and wireless phone service account for a larger share of black families’ budgets. Black households also spend more of their income on goods and services with prices changing more often, the study found.

Munseob Lee, an economist at the University of California, San Diego who co-authored the study, said many black Americans also live in food deserts and pay higher prices for groceries at convenience stores. Inflation only increases the price of these convenience store products, Lee said. It also forces black shoppers to travel with their dads for groceries, which means they are subject to rising gas prices, he said.

“If the prices paid by white households increase by 7% over one year, our calculations suggest that we can expect them to increase by 7.5% for black households”, notes for example the study. .

Johnson, the mother from Atlanta, noted that if Americans didn’t get a raise, the rate of inflation would equal a pay cut.

“I think a lot about money and I think a lot about finances and I wonder if our salaries are going to start to match (the rate of inflation),” Johnson said.

“It costs more to be poor”

Some nonprofits are stepping in to help families put food on the table as inflation continues.

Elizabeth Omilami, CEO of Atlanta-based Hosea Helps, said she’s seen a 40% increase in the number of families she serves food boxes to every week since April.

Omilami said she was also inundated with requests from people who needed help paying their rent. Many families, she said, are struggling with inflation because someone in the household lost their job during the pandemic or they are seniors on fixed incomes. Other families say their food stamps are not enough to cover the rising cost of food, Omilami said.

Well, drivers, we've got good news and bad news about gasoline.
“It’s so sad to see people who have worked their whole lives pouring their taxes into the economy of this country and now they can’t enjoy it,” Omilami said. “When you see black families earning 15% less than the average white family and you see them shopping because they live in food deserts near these convenience stores where everything is more expensive than in a supermarket … then that it costs more to be poor.”

A mother from suburban Atlanta said she had to make major changes to where she shopped and what her family ate.

Crystal Smith, a single mother of four, said she now spends more time comparing prices at different stores to see how she can save money. During a recent week, she decided to cook chicken in seafood broth for her family because it was the most affordable meal.

Gas prices are also weighing on his budget, said Smith, who works as a talent acquisition manager. She commutes 30 minutes to work and it costs her $75 to fill up. Before inflation, Smith said she only paid about $28 for a full tank.

“It’s one of those things that definitely makes you wonder how you can cut costs,” Smith said. “We are really going through a tough time and we have to start making tough decisions, especially in the African-American community.”

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