Ethnic pay gap: UK Indians earn more than white counterparts

New data has shown the first analysis of ethnicity pay gaps in the UK

INDIAN employees earned a higher median hourly pay than their white British counterparts last year, while wages for Bangladeshi and Pakistani workers were lower than any other ethnicity in the UK, new analysis showed on Tuesday (9).

Data from the Office of National Statistics (ONS) showed that workers of Indian ethnicity earned 12 per cent more an hour compared to white UK staff.

Employees of Pakistani and Bangladeshi heritage had the lowest median hourly pay in the UK, the ONS analysis showed.

According to the latest figures, Bangladeshi employees earned the lowest medium hourly pay, 20.1 per cent less than white British workers, followed by Pakistani employees.

The report, the first of its kind by the ONS, comes months after prime minister Theresa May proposed new plans which would oblige employers to release their race pay gap statistics.

Although some large businesses, such as banking giant Santander, agreed to report their ethnicity pay gap, not all have followed suit.

The prime minister launched the Race Disparity Audit in 2017, to examine how people of different ethnic backgrounds were treated across society.

Dawn Butler, Labour’s shadow women and equalities secretary, said the latest figures highlighted the “shocking persistence” of ethnic pay inequality.

“People need to earn a fair wage based on merit, not by virtue of the colour of their skin,” the Brent Central MP told Eastern Eye on Tuesday. “It’s shocking to see the largest ethnicity pay gap exists in London at 21.7 per cent – one of the most diverse capital cities in the world.”

Stressing that a Labour government would be committed to closing all pay gaps, Butler urged immediate efforts in addressing the issue.

“While the government seeks consultation on the ethnicity pay gaps from employers, it’s yet to give us tangible solutions to address the issue,” the MP said. “We need action, not audits.”

Speaking to Eastern Eye, Professor Binna Kandola, author of Racism at Work: The Danger of Indifference, said the findings have shone a light on the “racial hierarchy” which exists in the country.

Professor Kandola, who is the senior partner at workplace psychology consultancy, Pearn Kandola, also said there was a tendency for some to suggest that ethnic groups should “stop complaining about racism” if they were found to earn more money.

“It’s another way of not listening to people’s experiences, to deny that racism exists and to place responsibility for these results onto the members of these groups,” Kandola said. “This adds further humiliation to the discrimination that has been suffered.”

He noted that the average gap was “relatively small”; although black people consistently earned less, it was “important that the experience of different minority groups is examined, as this enables us to identify the most problematic areas.”

The ONS research showed similar findings by think-tank Resolution Foundation. It found that

Britain’s 1.9 million black, Indian, Pakistani and Bangladeshi employees are experiencing an annual pay penalty (pay gaps that control for workers’ characteristics) of £3.2bn.

Kathleen Henehan, policy analyst at the Foundation, acknowledged the strides made in recent decades in relation to ethnic minorities in educational attainment and rising employment.

However, she condemned the “significant” pay gaps that ethnic groups continued to face and called for changes to be made.

Having made significant progress on shining a light on gender pay gaps within firms though equal pay audits, the government should now extend this to look at pay gaps for BAME workers too,” Henehan suggested.

Echoing similar sentiments, Ruby Dinsmore, an employment lawyer at legal firm Slater and Gordon, said progress would remain slow if employers were not obliged to report their pay gap statistics.

“There also needs to be greater accountability at decision making levels, specifically board level, if BAME employees are to enjoy the same career progression as white staff,” Dinsmore said.

She added: “Ultimately, many BAME staff with equal qualification and skills do not progress at the same rate throughout their careers as white counterparts. This is not only bad for employees, but bad for business – employers are ultimately losing out on key talent.

“While we are moving in the right direction, much more needs to be done and now.”

Although Eastern Eye approached the Department of Work and Pensions for a statement, they were unable to provide comment on the statistics.

Other key findings revealed that Pakistani and Bangladeshi were significantly less likely to be employed, with the ONS suggesting this could be a result of “cultural differences” as many women were found to be looking after their family or home.

When in employment, data found that Bangladeshi females earned more per hour on average than their male counterparts, showing a gender pay gap of negative 10.5 per cent.

It also revealed that the existing pay gap between white British staff and other ethnic groups is generally smaller for younger employees than it is for older employees.

For Bangladeshi’s, for instance, 16- to 30-year-olds earn 3.1 per cent per hour less than white British employees on average, while those aged 30 years and over earn 27.9 per cent less.