The Impact of Socioeconomic Status on Racial and Ethnic Minorities

Socioeconomic status refers to income, financial security, educational opportunities and the perception of social class and status in society. It affects both the opportunities and privileges available to different groups of people and the quality of life. Research has found SES to be a reliable and consistent predictor of physical, psychological and other outcomes throughout a person's life.

How Socioeconomic Status Affects Society

Low SES and the conditions that come with it, such as poverty, lower educational achievement and poor health, impact society in multiple ways. Differences in SES have contributed to rising inequality in resource distribution, healthcare and overall quality of life in the United States and around the world. Increasing the effort to understand and reduce these inequities in SES may reduce the systemic inequities found throughout society.

The Relationship Between Race, Ethnicity and SES

SES, ethnicity and race are closely interlinked. Research has demonstrated that race and ethnicity play a significant role in determining an individual's socioeconomic status. Additionally, unconscious bias and discrimination often lead to communities being segregated by race, ethnicity and SES. People living in these segregated communities often share poor health conditions, low economic development and low levels of educational achievement. 

Discrimination and Marginalization.

Not only does discrimination and marginalization affect the socioeconomic status of minority groups, but it also hinders the ability of individuals to improve their SES and get out of poverty. 39% of African-American children and youths and 33% of Latino children and youths live in poverty in the United States. These children are more than twice as likely to live in poverty as children who are non-Latino White or Asian. American Indian, Alaska Native, Pacific Islander, and Native Hawaiian families experience poverty at higher rates than Caucasian and Asian families. Additionally, children from racial minority groups experience multidimensional poverty at higher rates than White children. 

African-Americans and Latinos are more than twice as likely to have a high-cost mortgage than Caucasians. African-Americans are unemployed at twice the rate of Caucasian Americans in an average year and African-American men who work a full-time job earn about 72% of the income earned by Caucasian men and 85% of the income of Caucasian women in similar occupations.

Education

Latinos and African-Americans have a higher chance of attending a high-poverty school than Caucasians or Asian-Americans. High school dropout rates for Latinos and African-Americans are higher than those for White Americans. Additionally, high-achieving African American students often attend schools with less rigorous curriculums than their White peers. These schools also tend to have fewer resources and the expectations for achievement are lower. African-American college graduates who are 22 to 27 years old experience more than twice the unemployment rate of all other college graduates.

Physical Health

There are more barriers to healthcare for members of minority groups and those groups receive a lower quality of care due to institutional discrimination. White Americans enjoy overall better health than other racial and ethnic groups. This inequity may be influenced by education, income, neighborhoods, geography, lower-quality healthcare, environment, provider bias or ignorance, poor healthcare access, difficulty navigating the healthcare system and stress.

Research has demonstrated a correlation between race and ethnicity and an increase in avoidable hospitalizations and procedures and untreated disease. African-Americans tend to have worse health outcomes than Whites at all income levels. Additionally, lower SES and minority and ethnic status are associated with low birth weights. American Indians and Hispanics are significantly less likely to have health insurance than other groups.

Mental Health

Not owning a home and having zero or negative net worth is associated with higher levels of depression. While African-American and Hispanic Americans report fewer psychiatric disorders than their white peers, those who do have mental illnesses tend to have more persistent disorders. Perceived discrimination also impacts the overall mental health of racial and ethnic minorities.

Socioeconomic status, which is closely correlated to race and ethnicity, has wide-reaching impacts on nearly every aspect of life and society. It is not possible to remedy the inequities found in modern society without addressing the racial bias and discrimination that contributes to them.