Cost of Living Crisis Threatens to Widen Disparities for Ethnic Minority Workers in the UK

Professionals from racially diverse background at greater risk of redundancies, debt and a mental health emergency

• New research from non-profit People Like Us reveals that over half of professionals surveyed from a racially diverse background (52%) say government support will not see them through the next six months
• 41% of ethnic minority professionals are worried about being made redundant due to rising costs, compared to 27% of their white counterparts
• Ethnic minority professionals are more likely to borrow money, move in with family and skip meals due to the cost of living crisis
• People Like Us research from earlier in 2022 revealed professionals from racially diverse backgrounds are paid just 84% of what their white counterparts earn
• People Like Us is calling for the British public to sign this petition to make ethnicity pay gap reporting mandatory in the UK, as it is for gender

New research from non-profit People Like Us and Censuswide reveals professionals surveyed from Black, Asian, Mixed Race and minority ethnic backgrounds say government support will not see them through the next six months, a rate 7% higher than their white counterparts (52% vs 45%). This is causing them to dip into savings at a greater rate, with ethnic minority professionals’ savings declining 1.3x faster than their white colleagues (falling 16% vs. last year; compared to 13% for white professionals). Therefore professionals from racially diverse backgrounds are facing a two-fold crunch, in which they are getting too little government support, and will also ‘run out of road’ faster than their white colleagues when it comes to their savings.

State of the workplace

Seven-in-ten (70%) UK workers surveyed are now more worried about the cost of living crisis than the COVID-19 pandemic. Redundancy worries are worse for workers from Black, Asian, mixed race and minority ethnic backgrounds, with 41% worried that they will lose their job in the wake of increased costs, compared to 27% of those from a white British background. This has caused over half of workers from a racially diverse background to feel despair about rising costs (56%). Even with an increased focus on diversity and inclusion in the last few years, only just over a third of employees feel it is a priority for their business (37%).

Workers from diverse backgrounds have also reduced travel costs by 8% compared with this time last year. Previous People Like Us research found that 42% of professionals from these backgrounds were worried about a lack of visibility if they do not go to the office, compared to 23% of their white colleagues; the cost of living crisis is therefore likely to exacerbate this gap.

Therefore, in addition to paying for the cost of living crisis financially, ethnic minority professionals also have to pay for it with their health, homes and careers. The psychological burden of this could create secondary or even tertiary crises as over half of professionals from diverse backgrounds (56%) admit to feeling despair (8% higher than their white colleagues).

The stark ethnicity pay gap
People Like Us revealed in January that workers from Black, Asian, Mixed Race and minority ethnic backgrounds are paid 84% of what their white counterparts earn. It also found that two thirds (67%) of racially diverse working professionals polled said they have had reason to believe that a white colleague doing the same job as them was on a higher salary. A quarter (24%) said they suspected the disparity in pay was up to £5,000, meaning people of colour could be losing out on £255,000 of earnings in a working lifetime due to the stark racially ethnic pay gap*.

Of those from racially diverse backgrounds who struggled to ask for a salary increase or promotion, over a quarter (26%) left their industry because they weren't given a pay rise they felt they deserved while half (50%) said not getting a salary increase or promotion has caused them to suffer with anxiety or depression.

Sheeraz Gulsher, co-founder of People Like Us commented:

“We need to make businesses accountable for their pay disparities. Mandatory gender pay gap reporting has started to get the wheels in motion to begin to address the balance between men and women, and we are now calling for mandatory ethnicity pay gap reporting to do the same on the grounds of race.

“It’s a positive step forward to have our first Asian Prime Minister in place, but with that change comes an increasingly stark reality that the broader community aren’t afforded the same assurances in terms of being guaranteed equal pay in their roles. We want to urge the new Prime Minister to take the initiative and introduce ethnicity pay gap bill without delay. This will start to address a fundamental imbalance, tackle a critical policy issue and ensure career progression and ambition is truly accessible for ethnic minority workers working in every department of UK PLC.”

Bills, borrowing and cutting meals

It’s impossible to ignore the fact that costs are going up across the board. Rent and mortgages will rise with interest rates, the cost of utilities increased by an average of 27% in October, and a recent study by Kantar revealed the cost of an average grocery shop will rise by £12 a week.

Yet on average, workers from an ethnic minority background are still trying to cut back to make ends meet. Professionals from these backgrounds spent on average £46 less a month this year on travel (£520 compared to £566), £70 less a month on rent (£913 compared to £983) and around £17 a month less on groceries (£575 compared to £592), despite all being demonstrably more expensive.

Rising energy costs are forcing Black, Asian, Mixed Race and minority ethnic professionals to make impossible choices between paying bills, eating and their careers. 30% of workers from diverse backgrounds are now borrowing money from friends and family, compared to 21% of white British, and on average borrowing £188, or 22% more (£1027 compared to £839). Alarmingly, 33% of diverse professionals are almost twice as likely to need to move in with family due to rising costs, compared to 18% of white British.

The study also found that 39% of ethnic minority workers are now skipping meals to save money, compared to 29% of white British. 35% of professionals from racially diverse backgrounds are struggling to afford their commute, compared to 23% white British, while 45% of ethnic minority professionals are now worried about their level of debt, compared to 39% white British. 36% of workers from diverse backgrounds are also relying on credit cards to see them through month to month compared to 27% of white British.

Professionals from racially diverse backgrounds are spending 11% less on groceries this year compared with 2021 and skipping three meals per week on average.

Dianne Greyson, founder of the #EthnicityPayGap Campaign commented:

"This report recognises that Black, Asian and other Ethnic groups are continuously penalised by societal structures. It also identifies the pressures of austerity which are very much entrenched thus causing a catastrophic existence for too many Black, Asian and other Ethnic groups.

"The Ethnicity Pay Gap cannot be allowed to continue. The government must listen and take action and work with organisations such as #EthnicityPayGap Campaign and People Like Us to deliver a clear and actionable strategy. We also believe that the government needs to incorporate an addendum to their strategy that includes evidence of a planned strategy to close the gap. I would encourage all businesses of all sizes to support this People Like Us petition and pass it on to anyone and everyone – together we can make a difference and right this outdated wrong.”

State of the government

On the economy, only just over a quarter of UK workers surveyed (28%) felt the proposed tax cuts would benefit them. Rather than tax cuts for the richest in society, with equivalent cuts in public spending, more than two thirds of respondents (68%) felt that the government should provide more financial support for the cost of living crisis, with a similar amount (68%) feeling more needs to be invested in public services. Almost two-thirds (65%) agree the price cap should be changed and made variable based on those who need the support more. More than half (57%) feel that, as it stands, the price cap unfairly benefits those on higher incomes.

More than half of workers (61%) feel that the government should go further than a windfall tax, and instead nationalise gas and electricity companies, as well as rail companies (57%).

Across the board, and even with this cost cutting, there has been a worrying drop in savings. Workers from a ethnic minority background saw their savings drop by approximately 16% in the last 12 months as they looked to cover growing costs (dropping from £6,739 to £5,654 on average). Those from a White British background decreased by about 13% in the same period (from £6,453 to £5,633).

To help alleviate the lack of pay equity in Britain’s workplaces, People Like Us is urging the government to introduce mandatory pay gap reporting by ethnicity as well as gender, backed by almost half (46%) of all workers surveyed - with just 16% opposing it.

Notes to editors

About People Like Us

People Like Us is an award-winning not-for-profit that celebrates and supports UK media, marketing and communications professionals from Black, Asian, Mixed Race and minority ethnic backgrounds. It does this by profiling individuals through quarterly networking events and by supporting professionals with tailored solutions on a range of career related challenges. This includes navigating tricky conversations in the workplace, finding mentors, LinkedIn/CV-shaping and, more broadly, advising organisations on inclusivity.

People Like Us is also on a mission to help foster a fairer workplace for allthrough equitable pay – and not just for those from ethnically diverse backgrounds, and not only those from the marcomms industries.

For more details: www.plu.org.uk.

For all media enquiries, please email sgulsher@gmail.com or visit www.plu.org.uk.

About the research

Research was conducted by Censuswide, among a sample of 2,023 working professionals aged 16+. Censuswide abides by and employs members of the Market Research Society which is based on the ESOMAR principles. The survey took place in October 2022.

Reference to January research in the ‘Stark Ethnicity Pay Gap’ section

Research was conducted by Censuswide, among a sample of 1,200 UK working professionals aged 16+. Censuswide abides by and employs members of the Market Research Society which is based on the ESOMAR principles. The survey took place in January 2022.

*This calculation is based on an estimated average working life duration of 38 years.