a Black couple sits at a table with a laptop, calculator, and papers spread out. they look stressed while their kids sit on the couch in the background

Tiffany Carlock had just gotten engaged before the 2008 recession but couldn’t afford the wedding until her parents chipped in. Even then, she and her husband had to spend the next few years stressing over trying to make ends meet. During the crisis period, the 26-year-old Afro-Latina from Maryland had no equity in her home, very little savings, growing student loans, and mounting credit card debt. 

The couple was living paycheck-to-paycheck and couldn’t afford to lose their jobs in the health insurance industry, but with the rising cost of gas prices, simply getting to work was becoming unaffordable. 

“Employers weren’t giving out raises or salary bonuses as most of the staff was being laid off,” she said. “My neighbors’ homes were being put for sale left and right, and many went into foreclosure and stayed on the market for a long time, including my neighbor directly next door.”

Stories like Tiffany’s were common in 2008, and economists now warn the U.S. is heading toward another recession in the coming year. While financial crises affect everyone, Black, Indigenous, and people of color, immigrants, and low-income families have historically faced dire consequences. 

A July 2009 study showed that Latinx and Black people lost more jobs and took longer to find employment compared to white people. Latinx workers were also overrepresented in occupations with the highest unemployment rates. Researchers call this the “Last Hired, First Fired” phenomenon, where BIPOC are more readily laid off to cut costs and least likely to find new jobs when the economy is improving. 

Along with experiencing increased inequities during the recession, research shows marginalized groups continue to face problems years after the crisis is over. 

Brandon S., a 19-year-old from Texas, was just 6 years old when the 2008 recession hit. Brandon couldn’t figure out what was going on when their dad lost his job and their mother was working extra hours to bear the financial burden. 

“Why don’t we have cable? Why can’t I get this toy I want?” they used to ask. 

Things haven’t improved much for them, even now, more than a decade after the recession. With the COVID-19 pandemic, rising inflation, unaffordable rental prices, company stocks falling, and rising gas prices bringing new financial problems, the prediction of another recession has people like Brandon on edge.

Even though lockdown orders have been lifted in most regions, many people are still out of work. Rising health concerns due to new COVID-19 variants, rapidly multiplying costs of living, and increased financial pressure to recoup the losses that occurred during the pandemic are some of the factors slowing the economy from going back to “normal.” While some of the older generations have lived through several crises, things may be worse now, experts say. 

“Back then we never had the threat of nuclear war with the Russia and Ukraine war hanging over our heads,” said Keisha Blair, the author of “Holistic Wealth Expanded and Updated,” the founder of Institute on Holistic Wealth, and host of the “Holistic Wealth Podcast.” “This all seems like rapid 7.0 earthquakes shocking the economy at the same time. We didn’t have to worry about unknown variants knocking at our doorsteps.”

Research has shown that during every financial crisis, BIPOC, LGBTQ+ people, low-income households, and immigrants suffer the most, both during and after the problem period. An American Civil Liberties Union study compared the lowered wealth between white and Black communities due to the recession. Researchers found Black households will have 40% less wealth by 2031 than they would have without the Great Recession, whereas white households’s wealth will be 31% lower. Economists say this disparity will be heightened with a new recession. 

“As a group, Black consumers have lower incomes, less money saved, and fewer assets like stock portfolios and retirement accounts, which makes it difficult to bounce back after a loss,” Blair said. 

Wells Fargo, the country’s third-largest commercial bank, denied more than half of the mortgage refinancing applications it got from Black consumers in 2020, while about a quarter of white applicants were rejected. Add to that the gender and racial pay gap, and things get harder. Black women make just 64 cents for every dollar a white, non-Latinx man earns, compared to the 83 cents on average for all women. Black women also carry most of America’s student loan debt, yet are paid less for earning a bachelor’s or an advanced degree

“If higher interest rates push the economy into a recession, that makes it more difficult for people on the economic margins to survive,” Blair said. 

Though the thought of another financial crisis is scary for those who barely scraped by in 2008, economists, financial managers, and people who found a way to get by during the last recession are speaking out about how people of color can best prepare. One of the most important pieces of advice: start prepping early. 

“There will be so many things out of our control during a recession, but focusing on what you can control is important,” said Pamela Capalad, a certified financial planner and the founder and CEO of Brunch & Budget. “It’s also crucial to start preparing now, when you’re not in both financial and emotional distress, so you can build up the reserves (both emotional and financial) to weather the problems that amplify during a crisis.” 

Arielle, a 40-year-old from North Carolina who had to delay getting her Ph.D. when the 2008 recession hit and whose husband had to become a permanent stay-at-home dad after losing his job, recommends cutting costs wherever you can. During hard financial times, her family shared a car, bought kids’ clothes at consignment sales, and grew their own herbs and veggies.

“It’s always good to have a buffer of emergency money saved up because you never know what may happen,” she said. 

In addition to having some emergency funds on hand, experts recommend attempting to pay off as much debt as possible before the recession hits, since having debt during a crisis will drain your money faster than you can manage, leaving you with little to spend for emergencies. 

On a societal level, some experts believe having access to universal health care, robust public transportation, walkable cities, and affordable, multi-unit housing rather than luxury apartments can be more effective than small families saving a couple hundred dollars for a rainy day fund. 

Many assistance programs exist for marginalized communities, but a severe lack of awareness and accessibility means these programs never reach those they are intended to help. 

“Making social services easier to access for BIPOC will go a long way,” Capalad said. “Allowing people to access food stamps, Medicaid, and rent payment assistance, and giving them guidance on how to apply for these services would be a huge help.”

Sakshi Udavant is a freelance journalist and content writer with an academic background in psychology. She covers social issues, technology, mental health, and well-being for titles like Business Insider,...