The ethnicity pay gap shows the difference in the average income rate between ethnic workers – including Black, Asian and other Minority Ethnic (BAME) and non-BAME – and White workers.
The ethnic pay gap – meaning and explanation
The ethnic pay gap reflects the disparity in average earnings between minority-ethnic workers and all-white workers within an organization. This is typically expressed as a percentage of average earnings and measured using the same methodology as for gender pay gap statistics.
For example, if an organization report reveals an ethnic pay gap of 12 %, this indicates that the minority-ethnic workforce at the organization earns on average 12 % less than its all-white counterpart.
A larger pay gap indicates greater inequality in terms of compensation and salary opportunities. Hence, the existence of an ethnicity pay gap suggests that individuals who belong to an ethnic minority (or a group of ethnic minorities) face biases that result in lower earning potential.
Contributing factors behind the ethnicity pay gap
Several factors contribute to the ethnicity pay gap, including:
- Discrimination: Discrimination in the workplace can manifest in many different forms, such as bias in hiring, promotion, and remuneration. Unconscious biases and stereotypes affect how individuals from different ethnic backgrounds are perceived and evaluated, which can lead to unequal pay.
- Occupational segregation: Certain industries and occupations have higher pay scales, while others are lower-paying. Ethnic minorities often face occupational segregation, meaning they are more likely to get low-paid jobs or low-level positions. This occurs even when the education level is equal or higher among ethnic minority workers.
- Unequal access to education: Unequal access to quality education effectively limits career prospects and earning potential for individuals from minority-ethnic backgrounds. This contributes directly to the pay gap by limiting access to higher-paying jobs.
- Fewer opportunities: The lack of representation in leadership roles makes it harder for ethnic minorities to access career and sponsorship opportunities, which restricts the prospects of higher salaries and bonuses, and exacerbates the pay gap.
- Unconscious bias in negotiation and promotion: Research suggests that unconscious bias can affect negotiation outcomes and promotion decisions. Ethnic minorities often face challenges when negotiating higher salaries or seeking out promotions, primarily due to biases that influence the decision-making process.
How can we close the gap?
Closing the ethnicity pay gap requires efforts that include a consistent approach to ethnicity pay reporting, fair pay scales, promoting negotiation transparency, and creating a workplace that promotes diversity. It is important to ensure that ethnic minorities have equal access to quality jobs in a stereotype-free environment. No workplace where bias and discrimination are allowed to thrive can truly foster a culture of equality and inclusivity.
For this reason, it is important to identify and eradicate practices that actively or indirectly uphold a toxic workplace culture.
The importance of comprehensive policies
No one single strategy will ever be enough to close the ethnicity pay gap. We need comprehensive and multifaceted policies that address systemic biases and promote equal opportunities. This can best be achieved by implementing fair and transparent hiring practices, conducting regular pay audits in order to identify disparities and consistently providing unconscious bias training to employees in management roles.
Additionally, fostering a culture of inclusivity and diversity that celebrates different ethnic backgrounds is essential. Through these collective efforts, along with ongoing monitoring and accountability, we can contribute to a more equitable society. A society in which individuals of all ethnic backgrounds are valued and compensated fairly for their contributions.
Key steps to closing the ethnicity pay gap
- Promoting pay transparency: Encouraging transparency in pay can help identify and address disparities within the organization. By conducting regular audits to assess gaps based on ethnicity, employers have the opportunity to take corrective actions.
- Addressing discrimination and bias: This includes implementing policies and practices that actively combat bias in all aspects of employment, including recruitment, promotion, and salary decisions.
- Diversity and inclusion training: through education and training we can help raise awareness, reinforce inclusive norms and promote fair treatment in the workplace.
- Promoting diversity in leadership: Encouraging diversity in leadership positions is essential. This can be done through the development of initiatives that identify talent from underrepresented ethnic groups, and providing mentorship and sponsorship programs that are inclusive.
- Supporting career opportunities and development: Specific career development programs that offer equal opportunities are an important driving force. These may include training, mentoring, and networking opportunities to individuals from ethnic minority groups. They should also offer clear pathways for progression within the organization.