Ethnic employment gaps have closed ‘substantially’ since the 1990s, according to research by the Institute for Fiscal Studies, but pay inequalities persist.
The think tank’s Deaton Review of Inequalities, published today (14 November), found that differences in ethnic minority employment rates are much smaller than in the mid-1990s, when Black African and Bangladeshi men had employment rates almost 30 percentage points lower than their white counterparts.
In 2019, this figure stood at 2 or 3 percentage points, the IFS found. However, participation rates among women differ more markedly between ethnicities, with Bangladeshi and Pakistani women of working age more than 30 percentage points less likely to be active in the labour market than white British women.
When it comes to pay, inequalities differ hugely depending on ethnic group. Median weekly earnings for Black Caribbean men were 13% below those of white British men in 2019, while Pakistani and Bangladeshi men earned 22% and 42% lower respectively. Earnings for Indian men were 13% higher, however.
Educational performance among most ethnic minority groups in the UK has improved relative to that of white people, the IFS found, although those from Black Caribbean backgrounds are the exception.
Ethnic minority employment
Bangladeshi pupils are now 5 percentage points more likely to obtain good maths and English GCSEs than white British pupils than they were 15 years ago, but Black Caribbean pupils have fallen further behind.
Students from all major minority groups were more likely than white students to attend university, although the share of university students attending the most competitive institutions is lower than that of white British students. The same applies for those completing their degree and obtaining a good grade.
Heidi Safia Mirza, a visiting professor in the department of social policy at the London School of Economics, said understanding ethnic inequalities in the UK was “a moral, political and economic priority”.
“The picture is neither universally positive nor universally gloomy,” she said. “Most ethnic minority groups in the UK are doing better than they were and are doing particularly well in education.
“On the other hand, most continue to earn less than their White British counterparts, and all earn less on average than we would expect given their education, background and occupation.
“Evidence of discrimination in the labour market is clear, and wealth inequalities are likely to prove especially hard to shift. Policymakers need to understand and acknowledge all these nuances and complexities if we are to make further progress in tackling remaining inequalities.”
The government fell short of making ethnicity pay gap reporting a legal requirement earlier this year, but has said it will help employers to reduce the impact of bias on under-represented groups at work.
Professor Imran Rasul, research director at the IFS, said it was important to consider the differences not just between ethnic minorities’ experiences and white people, but the differences between different ethnic groups.
“The differences between groups are greater than the differences between the white majority and the ethnic minority population taken as a whole,” he said.
“This understanding is a first step to an effective policy response. We also need to understand much more about what causes differences within and between ethnic minorities in the education and justice systems, and in the labour market.”
IFS’ research was published the same day as data from the Social Mobility Foundation showing a class pay gap of around 13%, an inequality that is heightened for those who are both from an ethnic minority and working class background.