UK ethnic minority workers face £3.2bn ‘pay penalty’

Britain’s black and ethnic minority workers face a “pay penalty” and earn less than white colleagues in the same jobs, according to a research group.

A report from the Resolution Foundation says overall the 1.9m BAME workers are paid about £3.2bn less than their white counterparts every year.

It used data from a survey of 100,000 people over 10 years.

The government says it is planning measures to help employers tackle ethnic disparities in the workplace.

The Resolution Foundation report calls on the government to follow its initiative requiring companies with more than 250 employees to publish gender pay gaps highlighting the different treatment of male and female employees by doing the same according to ethnic background.

It noted that BAME workers have long earned less, on average, than white male workers, due in part due to differences in qualification levels and the types of jobs they do.

But the foundation said its “pay penalty” calculation took into account factors including industry sector, occupations, contract types, education level and degree attainment of individual workers.

‘Diversity good for businesses’

The foundation’s research says the biggest impact was on black male graduates, who were paid 17%, or £3.90 an hour, less compared to their white peers.

Pakistani and Bangladeshi male graduates earned an average of 12% less an hour, while among female graduates, black women were said to face a pay penalty of £1.62 an hour, or 9%.

Among non-graduates, Pakistani and Bangladeshi men were reported to be the worst affected. The research said they earned £1.91 an hour, or 14%, less than white colleagues, with black male non-graduates £1.31 an hour, or 9%, worse off.

Kathleen Henehan, research and policy analyst at the Resolution Foundation, said: “A record number of young BAME workers have degrees, and a record number are in work.

“However, despite this welcome progress, many… face significant disadvantages in the workplace.”

The Equality and Human Rights Commission said it supported the mandatory reporting of staff recruitment, retention and promotion by ethnicity.

A government spokesperson said “diversity is good for businesses” and it is committed to ensuring the workplace “works for everyone”.

They added: “We’ve introduced new laws to help companies ensure the make-up of their boards and senior management is representative of their workforces and we’re currently consulting on proposals for mandatory ethnicity pay reporting as part of a series of measures to help employers tackle ethnic disparities in the workplace.”