By Jocelyn Fischer and Yana van der Meulen Rodgers
Inflation levels in the U.S. have reached decades-long highs during the COVID-19 pandemic and in its wake. Because inflation can erode people’s ability to afford the goods and services they need, the recent uptick in inflation has raised concerns about Americans’ economic well-being. Emerging research suggests that Black and Hispanic households have borne a larger burden of these price increases than White households because they consume proportionately more of the goods that have had the largest price increases, and their lower incomes have made it more difficult to handle the rising prices. However, little research exists regarding the disparities in inflation experiences between men and women, and even less is known about such disparities in different regions of the country. Two new data briefs by the Center for Women and Work examined gender and racial/ethnic disparities in inflation experiences in the greater New York City and Philadelphia areas in order to provide updated information about inequality in economic well-being in these areas.
Inflation is not expected to affect everyone equally. People who spend relatively more on products with higher price increases will be more greatly affected than those who purchase products with lower price increases. Additionally, people with more disposable income can more easily absorb price increases. Using data from the Consumer Price Index and the Consumer Expenditure Surveys, we at the Center for Women and Work examined how much prices increased in 2021 and 2022 across the range of consumer goods and services in the New York-Newark-Jersey City area and the Philadelphia-Camden-Wilmington area, and we compared these price increases to the expenditures on these products and the income levels of different demographic groups in these areas. Specifically, we examined the price increases in association with the expenditures and incomes of households differing by race/ethnicity and by gender of the head of the household in the geographic areas.
In the New York City metropolitan area, Black, Hispanic, and other non-White households were hit harder by price increases than White households because a greater share of their spending goes towards the products that increased the most in price, and because their lower average incomes may mean that they could not absorb the price increases as well. However, we observed some nuances in this pattern. Differences in the spending patterns of Black and White households headed by women in the New York City area did not clearly convey such a pattern, and White and non-White households headed by men in the Philadelphia area had similar experiences with price increases on the basis of their spending patterns.
Additional gender differences were observed in the inflation experiences of households. Households headed by men were hit harder by price increases than women-headed households on the basis of their spending patterns, except among non-White households in the Philadelphia area. However, in general, the higher average incomes of households headed by men relative to those headed by women may have provided men-headed households with more protection against the price increases.
This analysis indicates the need for support from New Jersey’s government in weathering the high levels of inflation in the COVID-19 era, especially for more vulnerable households. In many instances, Black, Hispanic, and other non-White households were hit harder by price increases than White households because they have lower average incomes to shield them from the high prices and because a greater proportion of their purchases is spent on the products with the highest price increases. Households headed by men were also rather consistently more heavily burdened by the 2021-2022 price increases than women-headed households on the basis of their spending patterns. However, the higher average incomes of men-headed households relative to women-headed households may have helped them to absorb the price increases more easily.