This research report explores the ethnicity pay gap, which is defined as the difference between the average hourly pay of ethnic minorities and White British people. It is usually expressed as a percentage difference, with White British people’s earnings representing 100%. As well as looking at differences in pay and trends over time, the research identifies the characteristics that explain those differences such as age, occupation and level of education. The research is intended to further debate and highlight areas where intervention may be needed.
- The ethnicity pay gap is a longstanding phenomenon. Previous research has shown that people from ethnic minorities tend to earn less, overall, than White people. This is often associated with social disadvantage and is arguably also caused by discrimination. New arrivals to the country may have a poor command of English, possess qualifications which are not generally recognised by employers and be unfamiliar with the UK’s culture; these factors affect pay. Immigrants to Britain often work in low-paid occupations and are overqualified for the job they do.
- Before exploring pay gaps, it is important to consider that employment rates – the percentage of a group with a paid job, excluding the self-employed – vary between ethnic groups, and by gender. Among both men and women, White British people have tended to have the highest employment rates in the period 2002-2014, at around 70%, although Indian people have also had noticeably high employment rates. The employment rates of Pakistani and Bangladeshi women have been consistently low – below 30%.
- According to analysis of Labour Force Survey (LFS) data in the period 2002- 2014, the mean hourly pay of different ethnic groups varied considerably. Gaps also varied depending on whether people in ethnic minorities were born in the UK or abroad. Among men, the overall picture was fairly clear. The White British group tended to outperform ethnic minorities in terms of pay – but with a few exceptions. All Indian and Chinese men (that is, both foreign-born and British) and British-born Black African men had similar earnings to White British men. However, all other groups earned noticeably less. Pakistani and Bangladeshi males had particularly severe pay gaps, especially those born outside the UK.
- The pay landscape for women in the same period was more complex. Ethnic minority women generally earned more than White British women, with all Indian, all Chinese, British-born Black Caribbean and British-born Black African women experiencing notable pay advantages. Only two groups had a clear pay disadvantage: these were Pakistani and Bangladeshi immigrant women. However, British-born Pakistani and Bangladeshi women experienced no such disadvantage. Along with female immigrants in the Black African and Black Caribbean group, their pay was found to be fairly similar to White British women’s.
- There are different ways to analyse and quantify pay gaps. In this report the analysis is largely based on a statistical predictive model which collated pay data in the period 2002-2014 and is presented in section five. As with the above, this model found that pay gaps are much larger for ethnic minority men born abroad than for those born in the UK. Male Bangladeshi immigrants experienced the largest pay gap of 48%, meaning they earned around half what White British men earned. British-born Bangladeshi men have a 26% pay gap. Pakistani immigrant men experienced a 31% pay gap, while British-born Pakistani men experienced a pay gap of 19%. For immigrant and British-born Black Caribbean men the pay gaps were 17% and 7% respectively. Black African immigrant men had a pay gap of 19% while British-born Black African men earned roughly the same as White British men. Indian and Chinese men’s earnings were similar to those of White British men, whether they were born abroad or in this country.
- Based on the same model, pay gaps for ethnic minority women were much smaller than those for ethnic minority men, and some groups had a pay advantage. Female Bangladeshi immigrants and Pakistani immigrants both experienced around a 12% pay gap compared with White British women. All other groups either experienced no pay gap or a pay advantage. Black African British women had a particularly large pay advantage, earning 21% more than White British women.
Chosen excerpts by Job Market Monitor. Read the whole story at Research report 108: the ethnicity pay gap | Equality and Human Rights Commission