The U.S. economy saw a slight reprieve from inflation when the Consumer Price Index (CPI) report showed a decrease from 8.5 percent in March to 8.3 percent in April, but inflation is still at a 40-year high.
Even though it is good news, experts warn inflation is not going away anytime soon and Black communities are disproportionately affected. When white America catches an inflation cold, Black America catches pneumonia.
Some are looking for the government to take action. President Joe Biden has unveiled a new plan to fight inflation but will it help Black Americans? At first glance, some observers might say no. In a Wall Street Journal column, Biden wrote about his strategy to tackle inflation and he seemed dismissive of inflation as a risk.
The president stressed that the economy is not as bad as it seems and said he wouldn’t “meddle” in the decisions made by the Federal Reserve about inflation.
“The U.S. is in a better economic position than almost any other country. According to the International Monetary Fund, the U.S. economy will be larger at the end of this year—relative to its pre-pandemic size—than any other Group of 7 economy. The U.S. economy may grow faster this year than China’s economy for the first time since 1976,” Biden wrote.
With the right policies, Biden wrote, the U.S. “can transition from recovery to stable, steady growth and bring down inflation without giving up all these historic gains. During this transition, growth will look different. We will likely see fewer record job-creation numbers, but this won’t be cause for concern. Rather, if average monthly job creation shifts in the next year from current levels of 500,000 to something closer to 150,000, it will be a sign that we are successfully moving into the next phase of recovery—as this kind of job growth is consistent with a low unemployment rate and a healthy economy. Things should also look different from the decades before the pandemic when too often, we had low growth, low wage gains, and an economy that worked best for the wealthiest Americans.”
Biden pushed the responsibility for making this transition off onto Congress.
“Congress could help right away by passing clean energy tax credits and investments that I have proposed. A dozen CEOs of America’s largest utility companies told me earlier this year that my plan would reduce the average family’s annual utility bills by $500 and accelerate our transition from energy produced by autocrats,” Biden wrote.
Most Americans in the U.S. are seeing their budgets strained.
U.S. adults say they are paying more for consumer goods, according to a recent survey of 2,000 people. It found that a 56 percent report feeling “extremely or noticeably” more stressed by adversity brought on by rising gas prices and inflation. The survey was conducted by One Poll for the debt resolution firm Beyond Finance.
U.S. Americans are also hesitant to retire right now. A different survey found that 25 percent of Americans are delaying retirement due to inflation,
One-quarter of Americans will have to delay their retirement, according to the BMO Real Financial Progress Index, a quarterly survey conducted between March 30 and April 25. Putting off retirement plans is mostly due to disrupted savings from increased prices, the survey found — 36 percent of survey respondents have reduced their savings and 21 percent said they are saving less for retirement in order to keep up with growing costs, CNBC reported.
Black Americans remain the hardest hit by inflation.
Black households are now spending more of their post-tax income on necessities like food and energy, according to a new Bank of America report cited by Business Insider.
On top of dealing with higher prices, Black people may see a spike in unemployment as well. Experts say inflation may reverse job gains seen by Black Americans since the pandemic.
One key measure tracked by economists revealed that employment of Black Americans of “prime working age” — 25 to 54 — went up to 77.4 percent in April, the highest in 22 years. It’s still well below the equivalent measure for white Americans, but the increase has reduced the gap between the two figures to the narrowest on record, in data stretching back to 1994, Bloomberg reported.
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“On the whole, we’re seeing that frankly a lot of Black workers are able to take advantage of the tightness of the labor market and strong employer demand to get jobs that would have taken much longer to get in other past downturns,” said Joelle Gamble, chief economist at the U.S. Department of Labor.
But the progress risks being reversed as the country fights inflation. The focus is being shifted from rebuilding the workforce to curbing price pressures through austerity measures.
If employers start to cut jobs, experts say Black employees are at risk of losing work.
“We’re still going to be the last hired, so if you increase the unemployment rate, you just undo all the gains,” said William Spriggs, the Howard University economics professor and chief economist for the American Federation of Labor and Congress of Industrial Organizations, in a Bloomberg report. “What’s the point of the tight labor market? It is the necessary condition for Black advancement.”
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