British Minorities' Pay Lags Even as Education Gap Narrows

(Bloomberg) -- People from British minority backgrounds are narrowing the gap in education, but they’re not yet seeing the equal rewards in the workplace.

A report by the Resolution Foundation shows the average pay gap between white and Pakistani and Bangladeshi non-graduate men is more than 4 pounds ($5.30) an hour. This narrows somewhat when adjusted for personal and workplace characteristics like age and type of contract, but there’s still a significant “pay penalty” for minorities, the think tank said.

By this adjusted measure, black male graduates are worst off, earning 7,000 pounds ($9,270) a year less than the equivalent white man from 2007 to 2017. That’s despite the proportion of black men with bachelor’s degrees increasing 24 percentage points over the past two decades, compared to a 15 point gain for white men. Black male graduates are slapped with an 8 percent bigger pay penalty than non-graduates, the report showed Wednesday.

“While much of the debate around the disadvantages that ethnic minorities face rightly focuses on schools and universities, our research shows that we should focus just as much on what is happening in the workplace,” said Kathleen Henehan, research and policy analyst at the Resolution Foundation. “Tackling racial disadvantage should be a priority for businesses as well as schools and universities.”

Race inequality was one of the “burning injustices” Prime Minister Theresa May promised to tackle, and if it behaves like gender, the economy would benefit by reducing it. The U.K.’s gross domestic product could be boosted by 180 billion pounds if firms matched Sweden’s gender pay gap, the Organization for Economic Cooperation and Development said in March.

©2018 Bloomberg L.P.