Although it was overtaken by the spectacle of the British public in a fit of morality, Friday saw some serious lobbying for mandatory ethnic pay monitoring which shouldn't pass unnoticed. The Confederation of British Industry, the Trades Union Congress and the Equality and Human Rights Commission wrote to Michael Gove to suggest that this measure could help bring about widespread change for the better in our labour market.
We needn't look far to understand why such a move would almost certainly do nothing of the sort. In 2017, the government introduced mandatory gender pay gap reporting for businesses with over 250 employees. The Fawcett Society and fourth wave feminists clearly believe the measure can deliver meaningful data that will help tackle workplace discrimination, but in truth publishing raw numbers in this way is pointless.
Unlike figures from the Office for National Statistics (ONS), gender pay gap reporting data do not distinguish between full-time and part-time workers – even though the average salary for the latter tends inevitably to be lower. The reporting measures do not take into account key differentials such as occupation, education level, age, or years of experience. They publish bonus calculations without the additional information of total hours worked, making it impossible to determine if pay disparity within a business is based on sex discrimination or the amount of time an employee has put in.
We cannot infer from the data from 12,000 organisations on the government website anything about an individual organisation's culture or attitudes. Even government departments with very similar recruitment, HR policies and civil service ethos show big variations in the size of gender pay gaps.
Mandatory ethnic pay gap reporting would be subject to many of the same pitfalls – and more. As with the gender framework, it would impose substantial monitoring costs on businesses and potentially increase ill-feeling among employees, particularly in the aftermath of Black Lives Matter. It would produce deceptive data that could harm those they are designed to help. In order to generate something halfway useful, people would be lumped together under broad categories, such as 'Black,' 'Asian,' or the useless and widely-disliked umbrella term "BAME".
In all but two regions of the UK, more than 85 per cent of the population identify as white but there are perhaps close to 100 distinct minority ethnicities in London. Their experiences could be very different, so if we can't break the data down further, what are we actually learning?
An 'Asian' group consisting mostly of those of Indian heritage could have a pay gap in their favour, not as a result of their employer's policies but rather the type of roles they occupy. Similarly, apparently 'bad' pay gaps may exist despite an employer's best efforts. This could lead to the unfair demonisation of businesses and their brands – as we've repeatedly seen with the pay gap between men and women.
EasyJet became public enemy number one when it reported a mean hourly gender pay pay gap of 51.7 per cent in 2018 – the common assumption being made by the public that sex discrimination was rife within the company. But the breakdown of the figures revealed a different story. EasyJet's cabin crew accounted for the majority of jobs within the organisation; of these roles, 71 per cent were held by women, paid a salary of under £24,000 per annum.
In comparison, EasyJet pilots (only 5 per cent of whom were women, in line with broader trends in the aviation industry) accounted for 26 per cent of the jobs within the organisation, on an average salary of £98,000 per year. When comparing male and female cabin crew and male and female pilots in their respective roles, EasyJet reported that women earn what their male equivalents earn.
And just as gender pay gap reporting risks incentivising employers to hire fewer women into junior roles, so ethnic pay gap reporting may push businesses to outsource lower paid work. It's hard to see how this would improve the position of lower paid minorities. Indeed, it is theoretically possible that all individual businesses could reduce their pay gaps, while pay gaps across the economy as a whole actually rose.
When the ONS published its most recent figures for pay disparity between ethnic groups, it found that 'White British' came fifth in the pay rankings, with a median hourly pay that is 7 per cent lower than 'White and Asian', 16 per cent below 'Indian', 23 per cent below 'Chinese' and a whacking 41 per cent below 'White Irish'. But these figures demonstrate that if you cherry pick, you can find the data needed to push almost any agenda.
To compare white people (themselves a mixture of ethnicities) and dozens of different non-white groups and assume there should be an equal distribution of barristers, firefighters, judges, FTSE 100 CEOs, teachers or accountants in each location and in each age group is borderline bonkers. To focus on some groups rather than others risks exacerbating rather than reducing inequality.
The government should follow the recommendation from the Commission on Race and Ethnic Disparities, which advised against requiring businesses to publish these figures, rather than folding to those noisily pushing for compulsion.
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