By Jocelyn Fischer, Ph.D. and Yana van der Meulen Rodgers, Ph.D.
During the COVID-19 pandemic, New Jersey has experienced record high levels of inflation. These price increases raise concerns about New Jerseyans’ financial well-being. However, inflation is not expected to affect everyone equally. The degree to which price increases affect people’s financial health depends on (1) what products they spend their money on (price increases vary across products, so people who spend more of their money on products with higher price increases will be more greatly affected than those who spend more of their money on products with lower price increases), and (2) how financially well-situated they are to absorb price increases in terms of their earnings and the extent to which their earnings have kept pace with inflation.
In a new report published in collaboration with the New Jersey State Policy Lab and the Center for Women and Work, we examined gender and racial/ethnic inequality in the financial effects of inflation. First, we examined gender and racial/ethnic inequality in the effects of inflation on the basis of different groups’ spending patterns in the New York-Newark-Jersey City area. Then we did the same for the Philadelphia-Camden-Wilmington area. We chose these data for metropolitan areas rather than for New Jersey, exclusively, because the data necessary for this analysis is available at the level of metropolitan areas.
We then took a closer look at the earnings and employment rates of different groups in New Jersey in addition to examining residents’ reported difficulty paying for usual household expenses, food insufficiency, spending behaviors, and stress caused by price increases. Some of our findings included:
- Black and Hispanic New Jerseyans were more financially burdened by inflation than White New Jerseyans, and Black and Hispanic New Jerseyans had lower earnings than White New Jerseyans. The multidimensional disadvantage of Black and Hispanic New Jerseyans in the financial burden of inflation is among the starkest findings in this report.
- Women, in general, faced a higher burden from inflation than men. Compared to men, women had lower average earnings and employment and were more likely to report difficulty paying for usual household expenses and food insufficiency.
To read our total findings and data, read our full report here.