New ONS analysis suggests that White British employees earn more than their Pakistani or Bangladeshi counterparts, whilst Chinese workers achieve over 30% an hour more pay than their White British equivalents.

For the first time, the Office for National Statistics (ONS) has published an analysis of ethnicity pay gaps, using data taken from a new earnings and income weight introduced to the long established Annual Population Survey (APS).

New Annual Population Survey metrics

The APS report – which uses material from the quarterly Labour Force Survey (LFS) and Annual Local Labour Force Surveys – is based on a sample of respondents from 320,000 UK households. To source the relevant data to analyse, the APS adopted a new earnings measurement, which reveals evidence that employees of Chinese, Indian and Mixed or Multiple-ethnicity have higher median hourly pay than that of White British employees. In contrast, those employees from Bangladeshi or Pakistani ethnic groups are subject to the lowest median hourly pay.

Chinese workers earn more

On average, those of Chinese ethnicity earned 30.9% more than their White British counterparts, with Indian employees on 12% more, and Mixed or Multiple-ethnicity workers on 2.5% above White British pay levels.

Meanwhile, Bangladeshi workers were found to earn, on average, 20.2% less than the White British segment. Pakistanis were on 16.9% less, and those of African, Caribbean or Black British ethnicity were receiving an average of 9.2% less than White British workers.

The report also shows the median gross hourly pay levels for employees from 2012 to 2018. At the two extremes, whilst Chinese workers could expect hourly earnings of around £15.75, Bangladeshi employees were more likely to receive in the region of just £9.60 an hour. Average gross earnings for White British employees in 2018 stood at £12.03 an hour.

The ethnicity pay gap between White British employees and most other ethnic groups narrows once other characteristics, such as education and occupation, are taken into account; however, some significant gaps still remain, particularly for those individuals born outside of the UK.

Regional disparities

Geographically, the earnings gap between the ethnic groups is largest in London, where minority groups were seen to earn an average of 21.7% less than white employees. However, in two regions – the north-east and Eastern England – negative pay gaps were recorded, meaning that average earnings for ethnic groups were higher than those for white employees.

Advantages of youth

The analysis also highlights that the existing ethnicity pay differential is generally smaller for younger employees (16 to 30-year olds) than it is for older workers.

Data sources

The analysis uses Annual Population Survey data, rather than figures from the primary source of earnings information in the UK, which is the Annual Survey of Hours and Earnings (ASHE), as the latter collects limited material relating to such factors as education and ethnicity. It should be noted that although the APS has a much-improved sample size, it still suffers from a number of shortcomings, including the fact that the earnings-related information is self-reported by employees, rather than capturing details from the employers, who are able to consult their own payroll records when responding to the survey. Self-reported data may be seen to be subject to a higher degree of recall error.

Barriers to employment vs economic benefit – widening the workplace talent pool

The new measurements follow on from a government initiative in 2016, and the subsequent 2017 Race in the workplace report (an independent review by Baroness McGregor-Smith), which considered the issues affecting black and minority ethnic (BME) groups in the workplace, and barriers to employment and to employment progression. According to the report, widening the workplace talent pool, and encouraging equal participation and progression across ethnicities, could be potentially worth an additional £24 billion annually to the UK economy.

See also

What can we do about the generational pay gap?

Do your employees think you pay them fairly?

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ONS Ethnicity pay gaps in Great Britain: 2018

Race in the workplace – The McGregor-Smith Review

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