With prices rising to the highest rates the US has seen in more than 40 years, researchers say Black families will suffer the worst effects of rising inflation "because they lag behind their White counterparts in income, wealth, financial savings, and home ownership," CNN reports.
According to data, Black households are more susceptible to inflation changes than White households due to the nation's wealth gap, which has made it difficult for Black families to maintain financial savings or build generational wealth. The median wealth of a White household is $188,200, which is 7.8 times more than the average Black household at $24,100, as determined by Brookings Institute.
In a study published by the Federal Reserve Bank of Minneapolis, researchers found that Black families' budgets are made up largely of necessities: groceries, electricity, and wireless phone service. Additionally, the study noted, per CNN, that Black households are also "spending a larger portion of their income on goods and services with prices that change more often."
"If prices paid by White households increase by 7% over a year, our calculations suggest that one may expect them to increase by 7.5% for Black households," the study shared, adding that the increase is due, in part, to the fact that many Black Americans live in food deserts and pay higher prices for groceries.
The disparity in the effect of inflation has left many Black Americans "without the funds to help offset the rising consumer prices and puts greater pressure on their monthly income," economists say, per CNN. "Some economists fear that if lawmakers don't act soon to combat inflation, Black families may be forced to go without necessities as the threat of another recession looms."
William Darity Jr., professor of public policy, African American studies, and economics at Duke University told CNN, "It's going to be extremely devastating [for Black families]." He added, "People will have to make very, very hard decisions about whether or not to purchase medicines or buy food or forgo payment of their utilities. It will have harsh effects on people's well-being."
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