Social and racial wealth gap increases


New research published by the Joseph Rowntree Foundation investigates the cost of living in Britain today. Since the first financial crash and ensuing recession, households require a third more income to maintain sufficient living standards.

The cuts to tax credits under the coalition government, plus escalating childcare, transport and private rental costs, compounded by stagnating wages, places one in four of the UK's population below the income threshold for the minimum standard of living - an increase of 3 million people since 2008 to over 15 million.

JRF's research provides an average (its barometer is pitched above bare survival but is by no means luxurious) of nation-wide necessary spends. OBV asks - what does this mean for BME communities?

Average statistics risk obscuring enormous variation across socio-economic, ethnic and geographical locations. We are already aware that of the one in four living below the necessary income standard, a disproportionate number are BME households. Research by the Institute of Race Relations from 2008 to 2011 finds that BME families have an income of less than 60% of the median household income. In practical terms, this means little or no extra money to boost extra-school learning, to buy necessary clothes and, worse still, to provide enough food for the whole family. Living standards are falling across the country, particularly for ethnic minorities.

This is not a crisis belonging to the work-shy or unemployed. BME men and women alike are paid less than those from other groups with similar qualifications or experience, working in comparable roles for the same number of hours. For example, in the capital, more than one in three Bangladeshi and Pakistani employees earn below the London Living Wage of £8.30 an hour. This leaves them nearly three times worse off than their white-British next door neighbours. One explanation for this gap is that non-white employees are more likely to participate in an informal work-place culture, which is neither unionised nor regulated. In turn, this limits access to professional development, progression, training or further qualifications.

To make matters worse, the rising cost of living is expected to require more and more households to rely on their savings. But statistics from the Department of Work and Pensions shows that almost two thirds of BME households have no savings at all, compared with a third of white households. Lower savings and assets are undoubtedly informed by lower wages, but also impact on the other determinants of poverty: education and un-paid caring.

These determinants of poverty make the link between social and economic disadvantage explicit. First, as highlighted by Will Hutton in a recent Observer piece, the middle class are spending 11 times more on "enrichment activities" for their children than those at the bottom, to successfully play the game of social mobility.

Second, a lack of financial muscle for educational leverage is exacerbated by experiences in the work-place. Low earners are more likely to endure anti-social working hours, preventing parents from spending time with their children. At the same time, responsibility to care, perhaps for an elderly relative (because private care is unaffordable to many), requires accepting working conditions with exactly those undesirable anti-social hours. Persistently, the cause and effect of poverty is transferred across the generations in reciprocal, interacting motions.

In the fight for equality, eradicating the social wealth gap is paramount, along with the recognition that this gap is invariably racialized. Unless pro-active measures are taken to unravel social and economic elitism, this country risks cornering off a destitute underclass with no outlet for the frustrations that poverty entails.

The approaching anniversary of the worst riots seen for a generation should remind us that positive action is imperative. As long as the lowest paid, low security jobs are filled predominantly by ethnic minorities and migrant workers; as long as income inequality remains unaddressed, limiting choice and opportunity; as long as the myriad requirements of different communities are not holistically targeted, the racial wealth gap will not only linger - it troublingly grows.

Philippa de Lacy