London records highest ethnicity pay gap in Britain, at 21.7% for 2018


London recorded the largest regional ethnicity pay gap in 2018, at 21.7%. This is compared to an ethnicity pay gap of 6.5% in favour of those in groups other than white British in the North East, according to research by the Office for National Statistics (ONS).

Ethnicity pay gaps in Great Britain: 2018, published on 9 July 2019, used data from the Annual population survey to analyse ethnicity pay gaps in the UK. The research defines an ethnicity pay gap as the difference between the average hourly earnings of white British and other ethnic groups as a proportion of the average hourly earnings of white British wages.

The ONS used 10 ethnicity categories for the purposes of this research: white British, white other, mixed or multiple ethnic groups, Indian, Pakistani, Bangladeshi, Chinese, any other Asian, Black African, Caribbean or black British and other ethnic group.

Across Britain, Pakistani and Bangladeshi staff have experienced the largest ethnicity pay gap when compared to white British employees. In 2018, Pakistani staff saw a 16.9% gap while Bangladeshi employees faced a 20.2% ethnicity pay gap.

Black African, Caribbean or black British employees and those who identity as other or white other on average earned between 5% and 10% less than their white British counterparts between 2012 and 2018. The ethnicity pay gap against other Asian individuals was 4% in 2018.

Frances O’Grady, general secretary at the Trades Union Congress (TUC), said: “The harsh reality is that even today, race still plays a real role in determining pay. This problem isn’t simply going to disappear over time. Ministers must take bold action to confront inequality and racism in the labour market. The obvious first step is to introduce mandatory ethnicity pay gap reporting without delay.”

However, the report also found that employees identifying themselves as Chinese, Indian or of mixed and multiple ethnic origin had a higher median hourly pay in 2018 than white British staff, earning an average of £15.75, £13.47 and £12.33 an hour, respectively. In comparison, white British employees received a median hourly wage of £12.03.

The groups with the lowest median hourly pay in 2018 were Bangladeshi, with £9.60, and Pakistani, at £10.

All ethnicity groups experienced an annual growth in pay of between 1.5% and 3.1%, but those identifying as Chinese saw an average annual rate increase of 5.3%.

Employees defining themselves as Chinese or Indian have consistently earned more than white British staff since 2012; the ethnicity pay gap is 12% in favour of Indian individuals and 30.9% in favour of Chinese employees. In alignment with this, the two ethnic groups with the highest proportion of employees in the highest pay quartile are Chinese (41.3%) and Indian (36.3%).

Women in the Bangladeshi ethnic group earned more, on average, than their male counterparts in 2018; this equates to a 10.5% pay gap in favour of Bangladeshi women. In comparison, black African, Caribbean or black British men earned more than women of the same group in 2018, with a pay gap of 3.3%. Chinese men, on the other hand, earned 19.1% more an hour than Chinese women for 2018, and Indian men similarly received 23.3% more pay an hour compared to Indian women.

Jamie Mackenzie, director at Sodexo Engage, added: “It’s positive to see greater transparency on pay gaps in the workplace, ensuring that all forms of diversity, from gender to race, are recognised. However, there needs to be action behind these numbers. Revealing these pay gaps can end up desensitising businesses and prevent them from making any realistic change.

“If there’s not encouragement to narrow pay gaps, improve recruitment and hiring processes or have more diversity on board level, showing the numbers will mean nothing. While the name and shame approach is all well and good, if businesses are not feeling the pressure to improve practices, then it will all be for nothing.”