Cost of Living Crisis Research
June 2022
LOANS, DEBT, AND CANCELLED PAY RISES: WORK INEQUITY MEANS COST OF LIVING CRISIS DISPROPORTIONATELY IMPACTS BRITS FROM ETHNIC MINORITY BACKGROUNDS
New research from networking group People Like Us reveals that 34% of professionals from racially diverse backgrounds say their salary won’t cover their mortgage, rent and energy bills (27% of those from White backgrounds said the same)
Working professionals from racially diverse backgrounds are nearly twice as likely to have been told they won’t be getting a promised pay rise this year due to inflation (19% compared to 10% of White professionals), and are now twice as likely as White professionals to think the current economic situation will increase the pay gap (26% vs 13%)
Over a third (35%) of ethnic minority professionals will rack up extra debt by taking out loans or spending on credit cards, with nearly a third (31%) borrowing money from someone they know
The research was commissioned by People Like Us, a non-profit created to celebrate diversity in the media and marketing industries. The organisation has today launched a free to download Self ID form and pay gap toolkit for organisations to measure their own pay gaps
London, June 2022: New research from non-profit People Like Us and Censuswide has revealed that the rising costs of living are affecting a huge proportion of UK workers, with almost half of employees (49%) are now living from paycheque to paycheque, and just over half now saving no money per month (53%).
Over a quarter of all those surveyed (28%) and over a third (34%) of those from ethnic minority backgrounds are now no longer able to afford to pay their bills, rent or mortgage each month. This has led to over a third of professionals (34%) from minority ethnic backgrounds and a quarter from White backgrounds thinking about downsizing their properties to manage spiralling costs. Over a quarter of professionals from minority backgrounds are even thinking about moving back in with family (29%).
Around half of respondents (48%) are having to change the food they buy because they can no longer afford their regular food shop, and four-in-ten (40%) worry about their family nutrition and wellbeing because they can no longer afford healthy or balanced food options.
Work-life balance
Workwise, nearly three quarters of those surveyed feel that rising costs are affecting their work life in some way (73%), it rises to 85% of workers from minority ethnic backgrounds. Over a quarter (28%) say it is affecting their performance at work, and people from a minority background are more likely to feel this effect (36%).
More than one-in-five employees from a minority background (22%) feel like they may have to change their job as they are unable to cover their living costs, this compares to 16% when you consider the broader population. Around a fifth of employees are also considering taking a second job to cover mounting costs (21%).
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 suspect 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*.
Out 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.
Pay gap perceptions and job security
Nearly one-in-ten workers surveyed overall feel staff at their company are paid more based on their gender (9%) and around one-in-seven from a minority background feeling they are paid less based on their race (14%).
People from a minority background are almost twice as likely (19%) to have had a promotion or pay rise they were promised taken away than people from a White background (10%), based on rising costs for their employers. Job security feels more at risk for those from a minority background too, with less than a third feeling their employment will be unaffected by rising prices (29%) compared to nearly half of those from a White background (46%).
This has led to 25% of people from a minority background thinking that pay gap issues within their company will get worse. There is therefore a very real possibility of thousands of Black, Asian, Mixed Race and minority ethnic professionals entering more debt due to inequitable pay practices during the cost of living crisis.
Commuting
It’s not just at the office where the worries lie. Commuting to work seems to be a particular stress for many. Around a quarter (24%) now prefer to work from home to avoid rising commuting costs, and 10% are trying to find new ways to get to work to avoid rising public transport costs. Eight per cent are now unable to afford their car. Around one in eight are struggling to afford the commute at all (12%).
How can the government and employers help?
When asked what would most support people in managing the rising cost of living, the top five actions that could be taken by the government and employers were said to be:
The energy price cap being lowered (41%)
A reduction in fuel tax (30%)
A windfall tax on energy companies (27%)
Employers raising salaries in-line with inflation (27%)
Utility and internet bills being subsidised for employees working from home (18%)
Action clearly has been taken by the government and employers in the past few months. Around a quarter of respondents said that their employer (25%) had increased salaries based on rising inflation, but less than one-in-five have received help from the government (19%).
And last week, the government announced an ‘Energy Profits Levy’ (a windfall tax) which would be redistributed to UK energy customers through a £400 energy grant which comes into action from October 2022. To further support the UK working population, companies can make it clear that working from the office is not expected at this time, and support increased internet and utility bills for those working from home. From the responses, Brits would next like the government to reduce the price they are paying at the pump through a reduction in fuel tax.
Sheeraz Gulsher, Co-Founder, People Like Us said: “It’s heartbreaking to see the devastating effect the cost of living crisis is having on people from all over the UK. But it isn’t affecting everyone equally. In these tough moments, it is really important not to let equity fall off the priority list, particularly when this data shows that this crisis is affecting those from minority backgrounds significantly more.
“People Like Us is asking the government to reconsider making ethnicity pay gap reporting mandatory for companies. It will truly create huge strides in making a fairer and more equal society. We are also asking all HR leads, payroll professionals, CEOs and business leaders to measure their pay gaps using the free tool on our website, it’s a simple exercise that will genuinely help foster equality in companies of any size.
“In this difficult moment, when you consider that people from diverse backgrounds are already getting paid less than their White counterparts, we think the People Like Us mission to create fair, equitable pay and transparency across the UK workforce is more crucial than ever.”
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 behind the scenes 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 all through 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 1,639 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 May 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.