• Saturday, August 20, 2022

Business

‘Money crisis to hit ethnic groups more’

INEQUALITY: Experts worry many ethnic minorities will not benefit from government initiatives

By: Lauren Codling

by LAUREN CODLING

ETHNIC MINORITY households may face more financial challenges following the Covid-19 pandemic as a new report exposed the “shocking” levels of economic and racial inequality in Britain.

Released on Monday (27), The Colour of Money report shows Bangladeshi and black African households have 10 times less wealth than white British people. BAME people generally have much lower levels of savings or assets than white British people, according to the analysis by the think-tank Runnymede Trust.

Its report also found that all BAME groups are more likely to be living in poverty. For Indians the rate is 22 per cent; Chinese 29 per cent; Bangladeshi 45 per cent and Pakistani 46 per cent.

In light of the coronavirus pandemic and the subsequent impact on the economy and employment, experts have raised concerns that some BAME households may struggle to survive.

Omar Khan, Runnymede director and co-author of the report, says the economic effects of Covid-19 “may last for a generation”. Ethnic minorities would be affected particularly, he said.

“I think both through the lockdown and afterwards there will be challenges for any households who have less savings and wealth,” he told Eastern Eye. “One of the main purposes for saving is to tide yourself over for an unexpected loss of income or costs and we have both those things going on right now.”

Omar Khan is the director of equality think-tank Runnymede Trust

According to the analysis, for every £1 of white British wealth, Indian households have 90–95p; Pakistani households have around 50p; Black Caribbean around 20p; and Black African and Bangladeshi approximately 10p.

“Many are having to dip into savings, but little consideration is given to those who have no savings to fall back on, are not able to work from home and have no IT equipment or not enough space to effectively school their children,” the think-tank leader said.

Although the government has introduced a number of initiatives to help the economy, including the jobs retentions (JRS) scheme, Khan has concerns that many ethnic minorities will not benefit from the plan.

“Minority workers are more likely to be self-employed or work part time, so I think the measures that have been announced will probably cover less of the income of some of those groups rather than others,” he said.

According to the Office of Budget Responsibility, the UK economy is predicted to shrink by 35 per cent this spring and unemployment soar by more than 2 million due to the pandemic.

The survey has found that BAME families have fewer savings

As unemployment is already higher among ethnic minority groups, Khan has concerns how this could impact them. Government figures from 2019 showed that black people had the highest unemployment rate out of all the ethnic groups (9 per cent), followed by Pakistani and Bangladeshi groups (8 per cent).

The Runnymede report also noted that BAME workers are more likely to participate in the ‘gig’ economy, which is based on flexible, temporary, or freelance jobs. According to data, up to 25 per cent of ethnic minority workers worked in these types of jobs compared to 14 per cent of the general population.

For those who may struggle to make ends meet during the pandemic, Khan highlighted the mental health problems that could be induced. If a person is having trouble affording rent of food, for instance, they could develop anxiety or stress-related issues.

“I think everyone is stressed in the current situation but the groups who are less able to cover their needs before lockdown will feel arguably even more stressed,” Khan noted.

The report also found that around 18 per cent of Bangladeshi workers, 11 per cent of Pakistani and Chinese workers, and 5 per cent of Black African and Indian workers are paid below the National Minimum Wage, compared to three per cent of white workers.

Eastern Eye

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