Report highlights pay penalties for ethnic minorities

Black male graduates can expect to be paid 17 per cent less than white male graduates after accounting for their background and their job while black women graduates suffer a 9 per cent penalty in comparison with white women, according to a new report.

The report, Opportunities Knocked? Exploring pay penalties among the UK’s ethnic minorities, by the Resolution Foundation finds there is less variation in the size of penalties that exist between graduates and non-graduates than there is between different ethnic groups themselves.

With the exception of black men, graduates and non-graduates from most ethnic minority groups experience similarly sized penalties in proportional terms. For instance, relative to white women, Indian women recorded pay penalties of 3 per cent and 4 per cent for graduates and non-graduates respectively. Likewise, both Pakistani/Bangladeshi women graduates and non-graduates had pay penalties of 5 per cent. Although larger, Pakistani/Bangladeshi men also recorded pay penalties that vary little between graduates (12 per cent) and non-graduates (14 per cent).

The report found penalties tended to be smaller among women than among men. Where non-graduate penalties among men range from 8 per cent (Indian men) to 14 per cent (Pakistani Bangladeshi men), among women they span from 4 per cent (Indian women) to just over 5 per cent (black women).

Among graduates the male penalties were larger on the whole – ranging from 17 per cent (black men) to statistically meaningless (Indian men), rather than from 3 per cent (Indian women) to 9 per cent (black women) among women.

Among graduates, no penalties improved (or worsened) in a statistically meaningful way between 1996-2006 and 2007-17.  However, among non-graduates, some groups (like Pakistani/Bangladeshi men and Indian women) experienced substantial progress in reducing their pay penalties. However, for others (like black women) these penalties grew slightly worse.

The report also shows that educational attainment and employment are up among all ethnicities. So, too, is the proportion of young people from ethnic minorities who are in higher-skilled work, and this has supported a rise in absolute levels of pay.

Calling for more action on discrimination, the report states: “The real pay gaps and remaining penalties that exist between both graduates and non-graduates of different ethnicities remain too large. And worryingly, we see little evidence of a wholesale improvement over time.”

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