This chapter will explore how race affects wealth, poverty and inequality. An increasing number of black and minority ethnic groups continue to live in low-income households, which affects their future opportunities including access to higher education and the labour market. This chapter will argue that poverty and inequality is related to processes of racism, which has a significant impact on the future life choices and life chances of black and minority ethnic young people, both in the UK and the US.

Who is poor?

The previous chapter explored the vast inequalities that continue to exist for black and minority people in the labour market. There is evidence to suggest that these inequalities have a direct impact on poverty levels for these groups. Catney and Sabater suggest that ‘[p]overty does not affect all ethnic groups equally, with ethnic minority groups more likely to experience poverty than the majority white group’. There is also evidence to suggest that there are differences in economic inequality and the effect this has on poverty levels within and between different black and minority ethnic groups (for example in terms of gender and ethnicity). As a result, the inequalities that black and minority ethnic groups experience in the labour market have a direct impact on the poverty they experience – both for individuals and households. Furthermore, geographical location also has a significant impact on whether individuals experience poverty and the types and extent of poverty they will experience.

Geographical location has a significant impact on being able to find work and the availability of work, which has a knock-on effect on poverty levels. Those who are looking for work but do not live in areas where work is available experience a ‘spatial mismatch’ between job supply and job demand – and this will affect people from different ethnic minority groups in different ways. Catney and Sabater suggest that ‘[a]ccording to the spatial mismatch hypothesis, there are fewer jobs per worker in areas with higher concentrations of immigrant and UK born ethnic minority groups than in predominantly white areas’. Menash has argued that black and minority ethnic workers are more likely than other groups to want to live near their place of work.