Business and Economy
We need to better understand how racialized minorities are being hit by inflation
Food products purchased from stores were up 9.4 per cent in June, compared to 12 months ago. (Pexels photo)
Rising prices have left no one’s wallet untouched. With inflation hitting a nearly four-decade high of 8.1 per cent in June, everyday essentials and basic needs such as food and shelter are increasingly unaffordable for many households. High prices come on the heels of the pandemic, which severely hurt many people’s physical health and finances.
In the last few months, several articles and surveys have looked at how Canadians are faring with the rising cost of living based on characteristics such as age, gender, location and income. Unfortunately, very little attention has been paid to the impact on racialized minorities despite clear signs they are among the hardest hit. This stems in part from a lack of publicly available data.
COVID-19 shed light on the importance of race-based data to better understand the effects of the virus on racialized Canadians. Statistics Canada made significant efforts in this department throughout the pandemic to improve the timeliness of its data. These efforts to publicly release data should now be expanded to the impact of economic phenomena such as inflation’s impact on racialized minorities. Not only would this help bring to the forefront the challenges faced by these groups, it would also improve governments’ ability to develop targeted support measures.
While better public data is needed on the impacts of higher prices on racialized Canadians, here is what we do know.
Rent and home ownership indicators
The cost of shelter was up 7.1 per cent year-over-year in June. Housing affordability deteriorated because of inflation, and this could not have come at a worst time for racialized minorities, who faced higher unemployment rates during the pandemic.
In 2021, 22 per cent of Canadians who identified as visible minorities lived in unaffordable housing, which Statistics Canada defines as shelter costs equal or greater than 30 per cent of total household income before tax. By comparison, 15.8 per cent of all Canadians were in a similar predicament. The percentage of Arab, Chinese and West Asian Canadians living in unaffordable housing was even higher at 30 per cent.
Racist labour exploitation continues in multicultural Canada
The rising cost of living severely hinders the ability of racialized minorities to aspire to homeownership, a category where they are already underrepresented. Canada’s homeownership rate in 2016 was 72.6 per cent. However, numbers from Canadian Mortgage and Housing Corporation show that certain racialized minorities, specifically Black (44.5 per cent), Arab (47.3 per cent) and Latin American (50.8 per cent) Canadians as well as Aboriginal Peoples (49.6 per cent), had dramatically lower homeownership rates.
Along with home prices, rents also went up in the last year. The national average monthly rent for properties listed on Rentals.ca was $1,885 in June 2022, a 9.5 per cent year-over-year increase. Housing costs in major cities, where a large portion of racialized Canadians live, have been notoriously high for a long time. In Toronto and Vancouver, the average cost to rent a one-bedroom apartment is currently more than $2,000 per month while the average two-bedroom rents for more than $3,000. These high prices will continue to make housing unaffordable for racialized minorities.
Cost of food
Food products purchased from stores were up 9.4 per cent in June, compared to 12 months ago. While we lack data on the specific impacts of such an increase on racialized Canadians, we do know that many of them struggle to put food on the table.
According to 2020 data, 9.9 per cent of people 12 years and older who identified as visible minorities lived in a household that was moderately or severely food insecure. This number was even higher for individuals who identified as Arab (18.2 per cent), Filipino (14.3 per cent), Black (13 per cent), Southeast Asian (12.8 per cent) and Latin American (10.3 per cent).
Statistics Canada conducted last spring the Portrait of Canadian Society survey. Looking at the impact of rising prices, the survey found that 43 per cent of respondents were most affected by rising food prices. Unfortunately, the publicly available data did not include numbers broken down by minority status. The lived experiences of racialized minorities dealing with inflation were therefore not properly discussed when the data was released. (In fairness to Statistics Canada, it might be able to link records from other surveys to gain this insight. Whether this data can and will be published remains unknown.)
Gas prices
Gas prices rose sharply in the last 12 months (55 per cent in June, compared to June 2021). This has significant implications for workers and especially racialized Canadians.
COVID-19 shed light on the fact that large numbers of essential workers are racialized minorities who were mostly unable to take advantage of working from home or hybrid workplaces. For instance, people who identified as visible minorities represented 34 per cent of nurses’ aides, orderlies and patient service associates, compared to 21 per cent of workers in all other occupations.
By the nature of their work, many essential workers have irregular schedules, which makes relying on public transit challenging or downright impossible. Racialized essential workers who drive to work never got the chance to save on gas during the pandemic. They must now deal with the double whammy of high gas prices and overall inflation severely outpacing wage increases.
Coming out of COVID-19, racialized minorities across the country are severely impacted by the rising costs of shelter, food and gas. Significantly more attention must be paid to the consequences of inflation on these groups. The fact that inflation likely peaked in June and that “things might get better” should not mask the necessity to improve data availability to better understand the impacts of higher prices on racialized minorities. Just like with the pandemic, the negative consequences of inflation on these groups will be long-lasting. Growing economic uncertainty and the risk of a recession just further strengthen the case for better data as racialized Canadians may once again feel the effects of economic headwinds. Ultimately, it all begins by incorporating a strong equity, diversity and inclusion lens to data publication and analysis.
This article first appeared on Policy Options and is republished here under a Creative Commons license.
