At the start of Black History Month we should ask: are the UK’s COVID recovery strategies taking full account of its unequal impacts on different ethnic groups?

The pandemic’s disproportionate effects on Black, Asian and ethnic minority families has pushed many far below what the British public regard as an acceptable minimum standard of living, according to the JRF’s Minimum Income Standard tool

Andrea Barry

As the COVID-19 pandemic spread through our communities, it soon became clear that its multiple impacts were far from equally felt. For example, according to the Institute for Fiscal Studies, there was a troubling initial increase in the proportion of Pakistani and Bangladeshi households in which no one had a job (pre-pandemic, these were highly likely to be single-earner households). In January-March 2021, a year on from the start of the pandemic, Pakistani and Bangladeshi unemployment rates in the UK remained frighteningly high at 9%, compared with 4% for people from a White ethnic background.

In all analyses of COVID impacts, it is important to understand the underlying differences between different ethnic groups. In the UK, Bangladeshi, Pakistani and Black households have persistently high poverty rates, in-work poverty rates, and child poverty rates – and the evidence suggests that young Bangladeshi and Pakistanis, plus Black and minority ethnic women, have been particularly badly affected by the pandemic.

Young Bangladeshi workers, for example, experienced a significant increase in under-employment, whereas young white workers were largely protected by the furlough scheme. And as they are largely employed in low-paid sectors (in spite of their increasing qualifications), these young Bangladeshis are still experiencing poor labour market outcomes. Both Pakistani and Bangladeshi workers are more likely to have jobs in catering, restaurants and related businesses, as well as taxi driving and chauffeuring – employment patterns that have been more at risk of earnings and job losses during the coronavirus outbreak.

A tool to encourage inclusive responses

Given this context, at the start of Black History Month it is timely to ask whether the UK’s COVID recovery strategies are being designed to take account of the unequal impacts of the pandemic on these communities?

One tool that could help encourage a more inclusive approach is the Joseph Rowntree Foundation’s Minimum Income Standard, which seeks to present a longitudinal assessment of the level of living standards that society considers everyone in the UK should be able to achieve. Essentially, this means the level of income needed to reach a minimum socially acceptable standard of living, based on what members of the public think. This is expressed as a basket of goods and services that encapsulate the notion that people should have:

  • more than adequate housing (safe, affordable and decent);
  • good work (providing a good wage and the ability to have a good work-life balance); and
  • a sufficient social and cultural life within the community.

When speaking to people in poverty or those living below the Minimum Income Standard, self-isolation due to lack of money is commonly identified as a key related issue. Many people on low incomes are being held back from reaching this standard – especially people from ethnic minorities who already faced a large income gap prior to the pandemic. The difference between disposable household incomes among Pakistani and Bangladeshi ethnic groups and their White counterparts is now at one of its highest levels for more than a decade.

Barriers to low-income workers reaching their full potential

A combination of insecure work, low pay, high housing costs and an inadequate benefits system is preventing many low-income workers from reaching their full potential. According to the 2021 edition of the Minimum Income Standard report, for example, the minimum disposable income guaranteed through the social security system for working-age adults without children is far lower than for families with children and also pensioners.

A working-age adult or couple relying on out-of-work benefits gets less than half of what they need through Universal Credit (UC). Without the temporary £20-a-week increase that is scheduled to end this month, this proportion falls further to just one-third. This is a particularly important issue for many people from ethnic minority communities who are more likely to be unemployed and in receipt of UC. The UK Government should not be removing this lifeline.

The effect of the benefit cap also continues to cut more deeply into the incomes of out-of-work families, pushing a significant number below the Minimum Income Standard. According to the latest calculations, an out-of-work couple with two children and modest private rent still experienced a reduction of disposable income of £40 a week, but were also not eligible to receive that temporary £20 uplift to UC during the pandemic.

The benefit cap continues to disproportionately affect ethnic minority families, according to research by the Runnymede Trust. Findings from the Women’s Budget Group show the impact of this cap and other tax changes hitting Black and Asian lone mothers particularly hard, due to their associated loss of income. There is a larger proportion of Black lone parent women than among any other ethnic group, and their poverty rates are higher. Child poverty rates in the Black ethnic group are over 50%, and this only increases for lone mothers.

An inclusive road to recovery?

So how can the Minimum Income Standard tool – providing an annually updated household income benchmark that captures societal changes over time – help when discussing what’s required to improve incomes and reduce poverty in these communities during and beyond the pandemic?

Certainly, the need to ensure that people have stable work and incomes that allow them to cover their costs will be even more important as the UK’s furlough scheme ends. With UC due to be cut by £20 a week and rising inflation and energy prices adding to the risk that people on low incomes will be unable to attain acceptable living standards, the Minimum Income Standard provides a true benchmark for the earnings, social security support and affordable housing that are needed to provide security for everyone in the UK.

The UK Government has gone some way in recent years towards improving incomes by raising the National Living Wage – but that on its own is not enough. In light of further threats to living standards, it is important to create better jobs. There are two government actions that can loosen some of the constraints preventing families from reaching MIS:

  1. developing a strategy to make jobs work, by improving the stability and adequacy of earnings from work; and
  2. focusing on reducing the uncertainties that people now face in the labour market.

Members of the public understand the extent of the challenges they face this year and beyond. For example, reliance on technology (especially for communication and accessing goods) has increased and confirmed the need for adequate IT equipment at home. Here too, the Minimum Income Standard provides an indicator of lasting changes in the ways people are living and how they spend money.

It is clear the pandemic has impacted Black, Asian and ethnic minority families differently from other groups. Creating better jobs is a long-term task but it is also long overdue, considering the levels of insecure and precarious employment seen in these ethnic groups. Improved financial support for those on low incomes is crucial if we are to help them reach the necessary living and income standards to weather whatever storms lie ahead.

Dr Andrea Barry is Senior Analyst at the Joseph Rowntree Foundation