In July, the Resolution Foundation, a non-partisan think-tank that conducts analytical research on living standards in the UK with the aim of producing policy solutions to help shape the debate on economic and social policy, published "Opportunities Knocked", a report that explores the pay penalties among the UK's ethnic minorities.
The report showed the largest pay penalty is recorded by black male graduates who can expect to be paid £7,000 per annum less than white male graduates. Black graduate women can expect to be paid £3,000 per year less than white graduate women.
Although it has garnered more media attention recently, the idea of ethnicity pay gap reporting is not new. A draft Ethnicity Pay Gap Bill was introduced as a private members bill into the House of Lords in 2016 which provided for the Secretary of State to make regulations requiring (with some exceptions) employers with 250 or more employees to report on remuneration for employees from different ethnic groups. The Bill did not though get any further than a first reading. Then, in advance of the General Election in 2017, the Conservatives pledged to introduce ethnicity pay gap reporting should they be elected to office so, in theory at least, it looks like the requirement to report will make the legislative books at some point.
But common sense dictates that ethnicity pay gap reporting (and the legal drafting required to set it in motion) is likely to be a considerably more challenging process than gender pay gap reporting. Gender pay gap reporting is a direct comparison of two groups, but there are multiple ethnicities in the UK, and previous research, such as that carried out by the Equality and Human Rights Commission, shows that there is a wide variance in the pay gap between different ethnicities as well as between black and minority ethnic (BME) employees as a group and white employees.
A 2017 ECHR report into the ethnicity pay gap found that British born ethnic minority employees had considerably smaller pay gaps than those born outside the UK. Pakistani and Bangladeshi men had particularly severe pay gaps but, according to the report, all Indian and Chinese men (irrespective of birth place) and British born black African men had similar earnings to white British men. Meanwhile, ethnic minority women were generally found to earn more than white British women, with only immigrant Pakistani and Bangladeshi women having a clear pay disadvantage. Reporting on groups that are too broadly defined, such as simply a BME and white British comparison, runs the risk of becoming a pointless burden on business rather than a driver of social and economic change. So, is it going to be possible to make any reporting accurate enough to provide a truly representative picture of the problems faced by the different ethnic groups?
The gender pay gap reporting which has take place, to date, can, of course, also be criticised for its failings. For example, companies that employ few women and pay them very well may not have a pay gap but nor are they doing much to assist the employment or progression of women in the workplace more generally and, of course, it doesn't address the issue of unequal pay at all. But what it has done is highlighted the pay gap, started discussions about it and started businesses looking at ways to try and reduce and eventually eliminate the gap. At the very least, ethnicity pay gap reporting would also serve that function.
And for the naysayers - in December 2017 the London Mayor, Sadiq Khan, undertook to report on the ethnicity pay gap within the Greater London authority group which includes the mayoralty, City Hall, Transport for London, police and fire services and various development corporations. The pay audit was carried out and the findings published earlier this year. No doubt some time could be spent arguing about whether the audit itself went into enough detail but the end result was covered heavily in the press. And that achieved the goal of showing it could be done and starting that all important conversation about how to reduce the gap.