UK Ethnic Minority Pay Gap

Posted on 01/02/2022 

by Yemi Jackson

UK Ethnic Minority Pay Gap

In the United Kingdom, white students receive higher classes of undergraduate degrees than their classmates from Black, Asian and other minority ethnic (BAME) backgrounds. The UK is not alone in these findings with similar gaps being reported around the world. Stranger still, despite students from Chinese and Indian ethnic backgrounds outperforming white students in university entrance exams in the UK, an award gap of 5% still exists for both of these minority groups (UK Government, 2020; AdvanceHE, 2020b).

Such award gaps limit ethnic diversity in the broader job market and obviously places constraints on ethnic minority undergraduates following the academic research path. Whilst there has been some success in reducing the award gap in the UK, a significant gap still persists.

       

The award gap follows BAME students into their careers: the proportion of white graduates in employment or further education one year after graduation is a third higher than the proportion of BAME graduates (UK Government, 2020).

Whilst the award gap persists, parallel actions on monitoring and changing recruitment practices are more widely needed across society in all jobs that employ graduates, to accelerate equal opportunity. Combining both sets of actions will widen the opportunity for increased numbers of BAME individuals to access openings that lead to more senior positions. This may positively feedback on itself, as students consider the lack of ethnic diversity among senior leaders as the number one cause of the gap.

Over the past two decades, the working population in the UK has become increasingly more diverse, with employment rates rising across all ethnic groups. Increasing the diversity of organisations isn’t just the right thing to do - organisations with a diverse range of employees have a better understanding of the needs of a wider range of customers, they are able to foster greater creativity and innovation, and build a more resilient workforce.

Where do ethnicity and gender meet?

 

So how do the ethnicity pay gap and gender pay gap interact? It appears that men earn more than women in 14 of 16 ethnic groups in England and Wales.

•           White and Black Caribbean (i.e. mixed race) women are the lowest female earners, earning as little as 70p for every £1 earned by the average White British man.

•           White Irish and Chinese are the only groups of women that earn more than the average white British man, earning £1.27 and £1.15 respectively for every £1 earned by the average white British man. Even in these groups, however, women earn less than their male counterparts.

•           In white and Black African (i.e. mixed race). Bangladeshi and Other Mixed ethnicities, women outearn their male counterparts by a small amount, although women in all of these groups still earn less than the average white British man.

•           the gender pay gap is greatest in the White and Black Caribbean (i.e. mixed race) ethnic group. Men from this group earn around the same as an average White British man, while women earn almost a third less.

Source: PWC Ethnicity Pay Gap Report

 

These pay differences have real impacts on the living standards of women from ethnic minority backgrounds. The 30% pay gap between white and Black Caribbean women and White British men amounts to a difference in earnings of around over £8.000 a year if we assume they both work full time”. This adds up over the course of a lifetime.

Evidence consistently demonstrates that inclusive organisations perform better financially than those with limited diversity. Lost productivity and potential not only represents a huge missed opportunity for businesses but impacts the economy as a whole.

 

When organisations set targets for recruitment, promotion and representation of ethnic minorities and then implement initiatives to deliver on them, ethnic minorities are more likely to progress in the workplace, helping to reduce the ethnicity pay gap.

Organisations can support and empower ethnic minorities in the workplace by devising Diversity, Inclusion and Equity plans which set targets and outline initiatives to address ethnic disparities.

Here at Engage Transform we only work with organisations that are committed to DEI so you can confidently apply for our roles knowing that your application will be based on capability. We are consistently working to remove gender and race bias in the recruitment process so register with us. Click the button below to get started.

 

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