How the Pandemic and a Rise in Targeted Hate Crimes Has Shifted Spending for Asian Americans

Rachel Wisniewski | Reuters

The coronavirus pandemic has hit everyone's wallets over the last year, as millions of Americans lost jobs and had to deal with sweeping lockdowns to curb the spread of disease.

For Asian Americans, the rise in hate crimes against the Asian American and Pacific Islander community added an extra layer of stress, and, in some cases, impacted household budgets.

"In terms of individual household finances, I think it's certainly been a very difficult year," said Angie Liou, executive director of the Asian Community Development Corporation in Boston. "And, whatever data is out there that's been collected over the last 12 to 14 months, we know that they don't capture complete or accurate pictures of the AAPI community."

More from Invest in You:
What your FICO score means and why you should pay attention
Josh Brown: How I explain the stock market vs the economy
How insurance premiums and deductibles work

Impact on the AAPI community

As a result of the pandemic, nearly 40% of Asian Americans are worried about a loss of income either from being laid off or having hours cut, according to a recent study by Lincoln Financial Group. Other minorities, including Black and Hispanic participants, were less concerned about a loss of income but more worried about having enough emergency savings and being able to pay for basic expenses.

"The events of last year impacted everyone, no question about that," said Jamie Ohl, executive vice president of Lincoln Financial Group, president of workplace solutions, and head of operations and brand. "Our research shows that minorities in particular were impacted more severely than others."

Because the Asian American community is so diverse — it represents people from more than 30 different countries of origin — data on the group as a whole fails to show the complete range of experiences. While some Asian Americans have done very well — making more than their white peers, being in solid financial standing and represented in high-caliber careers — others are struggling in the U.S., living paycheck to paycheck or in poverty.

For example, the median annual household income for all Asians in the U.S. in 2019 was nearly $86,000, higher than the overall median of $66,000, according to Pew Research Center. But that encompasses a wide range — the median annual household income for Indians was $119,000 while for the median for Burmese was $44,000.

Asian American women have been particularly hit hard by long-term unemployment, likely because they were overrepresented in leisure, retail and hospitality, industries most impacted by the pandemic. The share of Asian women age 16 and older who have been out of work more than six months is 44%, according to a January study from the National Women's Law Center. That outpaced both Latinas and Black women over the age of 16 who were long-term unemployed.

Violence towards the community

One part of the pandemic that has been specifically difficult for Asian Americans is the rise in hate crimes and violence against the community. Fearing for their safety, many AAPI families and businesses have increased spending even as incomes took a hit.

For example, if an elderly parent or relative mentions that they need something, "we just immediately jump on Instacart and send it to them," said Winnie Sun, co-founder and managing director of Irvine, California-based Sun Group Wealth Partners. "Those costs add up."

She added that many families have spent more on security and food delivery and some have even moved or considered moving because of safety concerns.

Others have taken other measures, such as buying and carrying pepper spray. It's also limited some people if they're less willing to venture out into the world.

"The fear is very real, it has a mental health impact and also ultimately does of course impact economic activity," said Seema Agnani, executive director of the National Coalition for Asian Pacific American Community Development. "If people are afraid to leave their homes, how will they go out and find a job or spend money in a local business?"

Madeline Park, 28, a dentist who also runs the Café Maddy Instagram page, where she shares cooking experiences, had a moment earlier this year where she considered income versus her personal safety. In April, she had to start going back into work one day per week and realized she wasn't comfortable taking the subway in New York City.

"I realized I feel terrified in the train, so I decided I'm going to take a cab to work," she said. Then, she realized that many people with similar fears across the city were probably forced to take the train because they can't afford cab rides, and so she decided to do something about it.

With $2,000 of her own money, she launched the Instagram page Café Maddy Cab, which reimburses cab rides for Asian women, Asian elders and Asian members of the LGBQT community. The account soon went viral and began accepting donations. By the end of April, the initiative reimbursed nearly $3,500 rides worth nearly $115,000.

A new normal

Now, the pandemic is starting to wane as vaccinations rise and cases fall. Over the last 14 months, many mutual aid groups were able to step up to help the AAPI community access unemployment assistance, rental and mortgage help and small business assistance.

"It's really impressive to see all the mutual aid funds that got up immediately after the pandemic hit, those were really the first line of defense," said Agnani.

In May, President Joe Biden signed the Covid-19 Hate Crimes Act, which would direct the Justice Department to expedite review of hate crimes related to the pandemic.

While some pandemic-related programs are slated to continue for now — such as a hotline to help people apply for rental assistance in Boston — they likely won't run forever. Park also intends for Café Maddy Cab to end at some point, but it isn't quite clear when it will sunset.

"This initiative is really meant to be temporary," she said. "As long as people are feeling safe, it will discontinue, which is hard to gauge."

The hope is that as the world reopens, fears will subside.

"Until that point, we're probably going to have to spend more money," said financial advisor Sun.

SIGN UP: Money 101 is an 8-week learning course to financial freedom, delivered weekly to your inbox.

CHECK OUT: How to make money with creative side hustles, from people who earn thousands on sites like Etsy and Twitch via Grow with Acorns+CNBC.

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

Copyright CNBC
Contact Us