Source > The Stylist
By Precious Adesina
7 June 2022
While the cost of living crisis affects everyone in the UK, new research commissioned by People Like Us, a non-profit created to celebrate diversity in the media and marketing industries, has shown that the resulting difficulties are hitting marginalised communities the hardest. Experts say the key factors driving up the cost of living in 2022 include rising inflation, tax increases and soaring energy bills.
“In these tough moments, it is really important not to let equity fall off the priority list,” says People Like Us founder Sheeraz Gulsher. Gulsher says that equity acknowledges that everyone’s circumstances are different and people need to be provided with the appropriate help to reach the same level of equality.
According to the research, over a third of people from racially diverse backgrounds can no longer afford to pay their bills, rent or mortgage each month compared to a quarter of people from white backgrounds. Consequently, the same percentage of ethnic minority professionals are looking to downsize or plan to move back in with their families. Around a third are also projected to rack up extra debt by taking out loans or spending on credit cards, and another third are borrowing money from someone they know.
“In these tough moments, it is really important not to let equity fall off the priority list”
“These statistics point to some very worrying trends,” says Sabya Mukherjee, head of credit risk at the mobile banking app Monese. “Accumulating debt can have a serious and long-lasting impact on many aspects of your life and financial wellbeing.”
Sabya notes that the side effects can last beyond the crisis. “Higher amounts of debt could negatively impact your credit score. Landlords, utility companies and mobile phone providers use your credit score and history to make decisions on tenants and customers. If your score is low, these things become more expensive or even inaccessible.”
Organisations such as the National Zakat Foundation (NZF), a charity based in the UK that collects and distributes Zakat (a wealth tax that all Muslims must pay once a year) from and to the UK Muslim community, have also seen a significant rise in the number of people applying for hardship relief funds.
“So far this year we’ve seen a 65% increase in applications,” says Dr Sohail Hanif, CEO of NZF. The charity uses the Zakat donated to provide monetary support for those in need with four core funds: housing, education, hardship and work. Most people looking for help are ethnic minorities. “Young, single women with children now make up the largest proportion of applicants. We expect to see another increase ahead of the new school year as new uniforms and shoes are needed for children, and inflation causes more cost-of-living stress for families.”
“Behind the growing numbers of people applying for help every day, there are human stories,” Dr Hanif adds. According to NZF, an apprentice electrician the charity helped, who was supporting his wife and two sons, was already in a tight spot financially even before his heating bill rose by 40% due to the crisis. “I had to choose between keeping the house warm over winter or buying the washing machine,” the apprentice said. After NZF provided him with a grant for the washing machine, he said: “I was able to get my dignity back.”
“That the cost of living crisis is particularly affecting BAME communities is compounded by the fact that the BAME population suffers higher levels of unemployment than the white population,” adds Dr Jane Lewis, senior lecturer in sociology and social policy at London Metropolitan University, who is looking into the BAME employment gap in parts of north London.
“A disproportionate number of the BAME population are faced with a wide range of barriers which compounds their access to jobs and to more highly paid and skilled jobs in particular, including low-level education qualifications.”
Additionally, the People Like Us research on the crisis found that 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.
“People Like Us is asking the government to reconsider making ethnicity pay gap reporting mandatory for companies,” says Gulsher. “In this difficult moment, when you consider that people from diverse backgrounds are already getting paid less than their white counterparts, we think creating fair, equitable pay and transparency across the UK workforce is more crucial than ever.”
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