Large income gaps between different ethnicities in Britain

Large income gaps between different ethnicities in Britain

Ethnic minority households in the UK earn up to £8,900 per year less than white British households, according to a report by think tank Resolution Foundation.

The gap between disposable incomes is even wider when housing costs are considered, as white British and Irish home ownership is significantly higher than that of other groups. The disposable income gap between white British households and Bangladeshi households increases to £9,800 when housing costs are accounted for.

The research also identifies disparities between different minority groups, with Bangladeshi and Pakistani families earning a third less than white families while black African families earn around a fifth less.

The report author and senior economic analyst at the Resolution Foundation, Adam Corlett, described the income and living standards gaps between minority ethnic and white groups as “significant and persistent.” He attributes the situation to a number of factors, including differences in female employment and family sizes.

For example, the rate of white female employment is 72%, whereas only 37% and 35% of Pakistani and Bangladeshi women are employed.

Nonetheless, income gaps are narrowing. Since 2001, typical incomes have grown by 38% for Bangladeshi households and 28% for Pakistani households compared to 13% growth for the white British demographic. Ethnic minority employment rates are also on the rise, particularly amongst black African and Caribbean women.

Simonetta Longhi has written about racial wage differentials in developed countries for IZA World of Labor, and suggests that “eliminating racial wage differentials and promoting equal opportunities among citizens with different racial backgrounds is an important social policy goal.”

She goes on to advise that “instead of policies specifically targeted to some narrowly defined minority groups, it would … be beneficial to adopt policies that target issues rather than groups. For example, policies designed to increase aspirations and mentoring for career progression could be targeted to all workers in certain low-pay occupations.”

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