July 11, 2019

Britain’s ethnic pay gap is revealed

Britain’s ethnic pay gap is revealed

According to figures by the Office for National Statistics (ONS), race still dictates how much you get paid in the UK. The first official statistics show that Pakistani and Bangladeshi workers have the lowest median hourly pay of all ethnic groups. Bangladeshi workers in particular earn 20.1% less than white British workers. Evidently, even when education and occupation are taken into account, particularly for workers born outside the UK, significant gaps remain.

IZA World of Labor author Simonetta Longhi has written on the topic of racial wage differentials in developed countries. In her article, Longhi notes that: “[e]liminating racial wage differentials and promoting equal opportunities among citizens with different racial backgrounds is an important social policy goal. Inequalities resulting from differences in opportunities lead to a waste of talent for those who cannot reach their potential and to a waste of resources if some people cannot contribute fully to society.”

The city with the highest proportion of people in ethnic minority groups in the UK, is London. It also has the largest pay gap between white and ethnic minority groups—21.7%. On average, white British workers were paid £12.03 in 2018, compared with £9.60 for Bangladeshi workers and £10 for Pakistani workers. The latter two groups also have the lowest employment rates: 58.2% for Pakistanis and 54.9% for Bangladeshis. Dr Zubaida Haque, deputy director of the Runnymede Trust race equality think tank commented: “The problem is that as well as getting companies to publish the gap you have to legally ask them to publish plans as to how they are going to close that gap. Otherwise, to be honest, nothing’s going to happen.”

Kathleen Henehan, a policy analyst at the The Resolution Foundation, an independent British think tank, said: “Almost all BAME groups continue to face significant pay gaps, compared with white workers. What’s more, these pay penalties hold even after accounting for workers’ qualifications, experience and the types of jobs they do. Having made significant progress on shining a light on gender pay gaps within firms though equal pay audits, the government should now extend this to look at pay gaps for BAME workers, too.”

According to Longhi, a lack of targeted policies can leave some racial minorities behind and experiencing persistent inequality. She adds: “The skills and talents of racial minorities may be under-utilized if they are prevented from reaching their potential and contributing fully to society. Ultimately, reducing racial wage inequalities is likely to lead to a more cohesive, productive, and egalitarian society.”

Read more articles on diversity in the workplace here.