Exposure to financial hardship

Not only have Black, Asian and minority ethnic people been overexposed to contracting Covid-19, the economic impact of the pandemic is likely to disproportionately affect these communities too. During this review we heard accounts from a range of people and organisations about the economic hardship affecting Black, Asian and minority ethnic communities alongside the health crisis.

The economic impact of coronavirus has hit some parts of the economy much more than others, and sectors such as hospitality were shut down to control the spread of the virus. Black, Asian and minority ethnic workers are over-represented in these sectors and are therefore likely to be disproportionately affected. [1] This is exacerbated by the fact that workers in shutdown sectors from Black, Asian and minority ethnic backgrounds are less likely to have a partner in paid work and are in general less likely to have savings to cover a period of financial hardship. [2]

Unite the Union highlighted how those who are already disadvantaged and face discrimination in the labour market will find it hardest to retrain and gain employment. BAME Labour highlighted in its submission that:

‘’While in the population as a whole, women are more likely to work in the shutdown sectors, this is only the case for the white ethnic groups. Bangladeshi men are four times as likely as white British men to have jobs in shutdown industries, due in large part to their concentration in the restaurant sector, and Pakistani men are nearly three times as likely, partly due to their concentration in taxi driving. Black African and Black Caribbean men are both 50 per cent more likely than white British men to be in shutdown.’’ [3]

Past economic crises have tended to exacerbate existing racial inequalities, with Black, Asian and minority ethnic workers bearing the brunt of job cuts. For instance, employment rates for Black workers fell by over 2 per cent during the 2007-08 financial crisis and by an astonishing 13 per cent during the recession of the early 1990s. There is already evidence of similar effects in this crisis, as some surveys have found Black, Asian and minority workers are more likely to report losing their jobs, losing hours or being furloughed. [4] 

Concerns have also been raised around the almost 1.4 million people who do not have recourse to public funds – a high proportion of whom are from Black, Asian and minority ethnic backgrounds. Citizens Advice highlights that some of these people “have faced the impossible choice of returning to work while ill, shielding, or living with someone who is shielding or losing their income”.  [5]

Financial hardship also has serious consequences for remittances – financial support sent to family members in other countries. We heard from the Filipino community that:

‘’Participants also struggled to remit money to the Philippines, at a time when relatives were also undergoing hardships associated with the global pandemic. Eighty per cent of participants supported loved ones abroad, including parents and children. Interviewees explained that relatives would be unable to access healthcare and medication, their children’s education would be interrupted, and families would go into debt if remittances ceased.’’

Pakistani and Bangladeshi workers are also overwhelmingly more likely to be self-employed, with one in four working-age Pakistanis and nearly one in five working-age Bangladeshis in self-employment. [6] This leaves them particularly exposed to a downturn and will leave many who are sole traders struggling to pay back debt build up over the course of the crisis. It also leaves them overly exposed to the large and well-documented gaps in the Government’s Self Employment Income Support Scheme, which Parliament’s Treasury Select Committee estimates left around 1 million self-employed workers with no financial support. [7]

We also heard from Black, Asian and minority ethnic business owners and self-employed people that they were struggling to access government schemes such as the Coronavirus Business Interruption Loan Scheme for small businesses and the Self Employment Income Support Scheme. During our meeting with small and medium-sized business owners for this review, one said:

“We did a recent survey which showed that 48 per cent of Black, Asian and minority ethnic-led businesses weren’t even applying for government schemes because they didn’t think they would qualify. We need to improve diversity data in business. The community urges the major banks, British Business Bank and government to improve their diversity data monitoring and reporting.  You can't impact what you don't measure.’’

Recommendation 10: Urgently conduct equality impact assessments on the Government’s support schemes to make sure Black, Asian and minority ethnic people are able to access the support they need

The Government has failed to conduct and publish equality impact assessments for its economic support packages. The Government should urgently conduct and publish equality impact assessments of all Covid-19 business support schemes. The audit should include but not be limited to the Coronavirus Large Business Interruption Loan Scheme, the Self Employment Income Support Scheme, the Bounce Back Loan Scheme, the Job Support Scheme and the Job Retention Scheme.

Breakdown of sectors most at risk of exposure to the virus and the proportion of BAME workers within them

Source: Office for National Statistics, Which occupations have the highest potential exposure to the coronavirus (COVID-19)?, 11 May 2020

Data: View here

Promoted by David Evans on behalf of the Labour Party, both at Southside, 105 Victoria Street, London SW1E 6QT.