Inflation affects white, Black, Hispanic, Asian American and Pacific Islander groups in America in different—but ultimately unequal—ways. Take a look at our latest report.
HOW INFLATION HITS AMERICANS OF COLOR HARDER
Authors:
Bernard Mendez, Sarah Feldman, Manuel Garcia—Garcia, April Jeffries
Key Takeaways
In 2022, rising prices was the story that never seemed to go away
Now, after months of belt—tightening, many economists are predicting a recession in the coming months as the Federal Reserve combats inflation.
Following the implosion of Silicon Valley Bank, inflation and the potential of a recession are precariously hanging in the balance.
Then, policies meant to solve inflation continue to hit Black and Hispanic communities the hardest. Racism baked into the financial structures of the U.S., from the housing market to the job market, exacerbates this cycle.
Inflation is regressive, meaning lower—income communities are often the ones who are hardest hit. But one less-talked-about impact of inflation is its effect on racial minorities. For Black and Hispanic Americans, it’s a vicious cycle: First, rising prices disproportionately hit Black and Hispanic communities.
It is vital for business leaders and policymakers dealing with inflation to view their actions with the historic racial inequalities of inflation in mind.
If not, they risk lost growth opportunities, challenged accountability and losing the trust of Black Americans, Hispanic Americans, and Asian American and Pacific Islander individuals.
While inflationary periods don't necessarily cause recessions, historically, policies meant to curb high levels of inflation in the past have led to recessions.
In the 1970s and 1980s, for example, following high levels of inflation, the federal government’s policies created periods of "stagflation", during which unemployment and inflation skyrocketed.
History shows that Black and Hispanic Americans take on the brunt of post—inflation recessions
During these periods, unemployment among Black and Hispanic Americans, which was already higher than the U.S. average, spiked.
Recessions hurt all Americans. But history shows that they hurt Black and Hispanic Americans even more.
The post—pandemic economy is complex, and complicating factors like the rise in interest rates make it difficult to predict the future. Amid all this uncertainty, however, it is key for decision—makers to factor in the historically inequitable impact of inflation in their decisions.
Historic periods of inflation deepened the employment gap
Following historic levels of inflation and amid a complex post—pandemic economy, economists have been predicting that a recession is imminent for around a year.
How will this latest wave of inflation affect Americans of different backgrounds?
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April Jeffries
President,
Global Ethnography and Immersion
april.jeffries@ipsos.com
Curious to learn more? Contact us!
Historical patterns show
that previous post—
inflation recessions have
hit Black and Hispanic Americans the hardest
Most Americans are
feeling crunched by
inflation. But in the past few months, Hispanic Americans have been squeezed the tightest
Inflation is worrying many Americans, but not equally
Maintaining trust among Black, Hispanic, and
Asian American and
Pacific Islander individuals means forming policy
with them in mind
Inflation (CPI)
U.S. Unemployment
Black Unemployment
Hispanic Unemployment
Unemployment rate (%)
Inflation
rate (%)
Recession
1973–1975
Recession
Jan 1980–
July 1980
Recession
July 1981–
Nov 1982
The gap between U.S. unemployment and Black and Hispanic unemployment also increased, suggesting that these inflationary recessions not only perpetuate inequality—they deepen it.
Black and Hispanic Americans faced higher unemployment following historic periods of inflation
Inflation (CPI)
Gap between Black
and U.S. unemployment
(5 month moving average)
Gap between Hispanic
and U.S. unemployment
(5 month moving average)
Difference in unemployment rate (%)
Recession
1973–1975
Recession
Jan 1980–
July 1980
Recession
July 1981–
Nov 1982
Inflation
rate (%)
Here’s what the economy looks like now
Authors:
Bernard Mendez, Sarah Feldman, Manuel Garcia-Garcia, April Jeffries
Inflation affects white, Black, Hispanic, Asian American and Pacific Islander groups in America in different—but ultimately unequal —ways. Take a look at our latest report.
HOW INFLATION HITS AMERICANS OF COLOR HARDER
Key Takeaways
Historical patterns show
that previous post—inflation recessions have hit Black and Hispanic Americans the hardest
Most Americans are feeling crunched by inflation.
But in the past few months, Hispanic Americans have
been squeezed the tightest
Inflation is worrying many Americans, but not equally
Maintaining trust among Black, Hispanic, and Asian American and Pacific Islander individuals means forming policy with them in mind
In 2022, rising prices was the story that never seemed to go away
Now, after months of belt—tightening, many economists are predicting a recession in the coming months as the Federal Reserve combats inflation.
Following the implosion of Silicon Valley Bank, inflation and the potential of a recession are precariously hanging in the balance.
Inflation is regressive, meaning lower—income communities are
often the ones who are hardest hit.
But one less-talked-about impact
of inflation is its effect on racial minorities. For Black and Hispanic Americans, it’s a vicious cycle:
First, rising prices disproportionately hit Black and Hispanic communities.
Then, policies meant to solve inflation continue to hit Black and Hispanic communities the hardest. Racism baked into the financial structures of the U.S., from the housing market to the job market, exacerbates this cycle.
It is vital for business leaders and policymakers dealing with inflation to view their actions with the historic racial inequalities of inflation in mind.
If not, they risk lost growth opportunities, challenged accountability and losing the trust of Black Americans, Hispanic Americans, and Asian American and Pacific Islander individuals.
History shows that Black and Hispanic Americans take on the brunt of post—inflation recessions
Black and Hispanic Americans faced higher unemployment following historic periods
of inflation
Inflation (CPI)
U.S. Unemployment
Black Unemployment
Hispanic Unemployment
1973
1986
1980
Recession
July 1981–
Nov 1982
Recession
Jan 1980–
July 1980
Recession
1973–1975
0
5
10
15
0
10
15
20
Unemployment rate (%)
Inflation
rate (%)
While inflationary periods don't necessarily cause recessions, historically, policies meant to curb high levels of inflation in the past have led to recessions.
In the 1970s and 1980s, for example, following high levels of inflation, the federal government’s policies created periods of "stagflation", during which unemployment and inflation skyrocketed.
During these periods, unemployment among Black and Hispanic Americans, which was already higher than the U.S. average, spiked.
The gap between U.S. unemployment and Black and Hispanic unemployment also increased, suggesting that these inflationary recessions not only perpetuate inequality—they deepen it.
1973
1980
1986
Recession
July 1981–
Nov 1982
Recession
Jan 1980–
July 1980
Recession
1973–1975
0
5
10
15
Difference in unemployment rate (%)
0
4
6
10
Inflation
rate (%)
Gap between Black and U.S. unemployment (5 month moving average)
Inflation (CPI)
Historic periods of inflation deepened the employment gap
Gap between Hispanic and U.S. unemployment (5 month moving average)
8
Recessions hurt all Americans.
But history shows that they hurt Black
and Hispanic Americans even more.
The post—pandemic economy is complex, and complicating factors like the rise in interest rates make it difficult to predict
the future. Amid all this uncertainty, however, it is key for decision-makers to factor in the historically inequitable impact of inflation in their decisions.
Here’s what the economy looks like now
Following historic levels of inflation and amid a complex post—pandemic economy, economists have been predicting that a recession is imminent for around a year.
How will this latest wave of inflation affect Americans of different backgrounds?
5.0
10.0
15.0
20.0
4.0
6.0
8.0
10.0
12.0
14.0
2
4
6
8
10
2
4
6
8
10.0
12.0
14.0
April Jeffries
President, Global Ethnography
and Immersion
april.jeffries@ipsos.com
Curious to learn more? Contact us!
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