The realities of ethnic minority pay

A new report investigating the pay differences between ethnic minority staff and their white counterparts has been published by the Universities and Colleges Employers Association (UCEA).

Inspired by the interest shown in gender pay gap reporting and the prospect of ethnicity pay gap reporting, the key findings include clear evidence that pay ‘penalties’ for ethnic minorities are significant, with black men and black women earning the least on average relative to white men. The research finds that the pay penalty experienced by ethnic minority women in the sector is much more likely to be due to factors associated with their ethnicity than their gender.

While women earned less than their male counterparts across all ethnic groups, the gaps were largest between white men and white women and narrowest between black men and black women, according an investigation by the Universities and Colleges Employers Association (UCEA) into the differences in pay of groups that have two or more protected characteristics.

Pay differentials

UCEA’s research focuses on the difference in basic pay between men and women in two broad groups – black and Asian – compared with those of white men and white women. Using HESA staff data for 2016-17, UCEA finds that there are sizeable earnings differentials by both gender and ethnicity, with women earning on average less than men and most broad ethnic groups earning less than both white men and white women.

Black men and women earn the least on average with pay penalties – pay gaps that remain after taking into account observable characteristics that influence earnings – for ethnic minorities significant across the sector. UCEA found that there was no significant pay gap between black men and black women, suggesting that there is no clear compounded intersectional effect for these groups.

There was, however, a clear pay gap between Asian men and Asian women, indicating the presence of an intersectional effect for these groups. Asian men earn significantly less than white men on average, but tend to earn slightly more than white women. Asian women earn markedly less than white women. UCEA finds that it is vertical job level segregation rather than different pay for like workers that results in the pay differentials: black members of staff are much more likely to work in lower pay grades (up to £35,000) than their white and Asian counterparts.

Persistent trends

The trends persist across the two groups: professional services staff and academic staff. However, the differences become even more stark when considering academic staff alone. Among white academic men, 38.7% earned over £50,000 compared with 23.9% of white women, 25.1% of Asian men and much lower percentages for all other groups. The cumulative pay distributions for black academic men and women resemble each other closely up until £50,000 while the curves for Asian men and women begin to divert at around the £30,000 mark.

When isolating professional services staff, pay tends to be concentrated towards the lower end of the distribution, with most staff earning less than £45,000. Black members of professional services staff are once again overrepresented at the lower levels of pay (up to £30,000), and exhibit distributions consistently lower than that of their white counterparts. The earnings distribution for Asian men loosely resembles that of white women, with Asian women taking on a generally lower earnings profile.

Nationality is also a significant factor: non-UK ethnic minority staff experience larger pay penalties than UK ethnic minority staff. However this does not go all the way towards explaining the differences. In an index of the distance between the earnings of various subsections of minority groups relative to that of white UK men (across all staff), UCEA finds that, after white non-UK men, Asian UK men are the closest in earnings profile to white UK men. The distance jumps significantly beyond these three groups, with black non-UK men, black UK women, and black non-UK women ranked the furthest away groups. Black UK men more closely resembled the earnings distribution of white UK men than did Asian women, both UK and non-UK, however.

Intersectionality matters

UCEA also conducted a regression analysis to evaluate the impact of intersectionality on earnings. The analysis finds that, when compared to white men, white women earn on average 7.4 percentage points less on average, while Asian men earn 6.8 percentage points less. Asian women tend to earn 11.6 percentage points less, with both black men and black women earning an average of 14.3 percentage points less than white men.

It is a complex picture, but one that proves the importance of looking at ethnicity and nationality alongside gender when considering pay differentials among HE staff – particularly when isolating those working in academia considering the high proportion of international members of staff.

UCEA concludes that, in the intersection of ethnicity and gender, ethnicity is the stronger factor in determining pay penalties. The organisation recommends that HE institutions consider the impact of nationality on ethnicity pay gaps, the intersectionality of gender and ethnicity on pay outcomes, and how existing gender pay gap interventions may affect women of different ethnic groups. It adds that care should be taken in communications to avoid pay ethnicity gaps being attributed solely to racial discrimination.

You can read the report in full here.

4 responses to “The realities of ethnic minority pay

  1. Could you provide age breakdowns ? There may well be a generational effect which you might expect to show some improving trends? Also you refer to international members of staff – what happens to the data if you consider only UK citizens?

  2. Regarding pay differentials, among white men and white women the perception, and this is the personal qualitative theory rather than anything I have the resources to test for formally, might be that it is considered that male work and achievement is values, but it is still the case that female companionship is valued in an of itself, and understanding this, I think, is the key to understanding why the male/female wage gap still persists.

    Regarding BME, from all the evidence I’ve seen it’s pretty clear that unconcious and even concious racism is still in place, but cultural and structural artifacts have looked like the most significant barrier, at least to my mind.

    Sorry for the lack of rigour in my answer. Again, I lack the resources to fully test these theories in the way I would like so just putting the ideas out there.

  3. Also apologies because I do not appear to have the facility to edit my own commentary on this site, so I hope you’ll forgive the additional cognative overhead of translating my typos.

  4. Hi Anne – thanks for your interest – we did include age in the regression as there are differences in the age profiles – so the effects of age in our analysis should have been accounted for – although it won’t account for a cohort effect whereby we may see a gradient of improvement between cohorts.

    If you follow the link at the bottom you can see the full regression specification on pages 19-20 with variable description on page 35. The results on pages 24 and 25 show the impact of nationality.

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