A pay gap we should all be worried about

There was some rather alarming data published by the TUC last week that shows there is a significant pay gap between White people and Black, Asian & Minority Ethnic (BAME) people (Headline results are repeated below). This should be an immediate cause for alarm, but are we seeing the full picture of discrimination in the UK in these statistics?

White workers BAME workers Black workers
Pay Pay Pay gap Pay Pay gap
All workers £13.45 £12.70 5.6% £11.73 12.8%
Degree £18.63 £16.70 10.3% £14.33 23.1%
A-levels £11.53 £9.55 17.1% £9.88 14.3%
GCSE

(A* – C equivalent)

£10.33 £8.93 13.6% £9.15 11.4%
No qualifications £8.90 £8.25 7.3% £9.00 -1.1%
Other qualifications £9.48 £8.88 6.3% £9.25 2.4%

https://www.tuc.org.uk/equality-issues/black-workers/labour-market/black-workers-degrees-earn-quarter-less-white

On the basis of these numbers, the TUC have called for the government “encourage employers to focus on fostering opportunities for BAME leadership and building transparent career progression pathways, as well as tackling discrimination in recruitment through measures such as anonymised CVs.”.

All of this, however, seems to jump to the conclusion that there is institutionalised racism amongst employers. But issues of race are almost always more complicated than that, and there are complex social and cultural issues that must first be considered. Affirmative action could be a potential solution, but we need to first understand what underlying issues are causing this gap before we start throwing ideas out there and begin, potentially, to merely cure the symptoms.

At the lower education levels, these numbers are not necessarily a surprise. BAME people are far more likely to come from deprived areas. Therefore, workers from BAME backgrounds are less likely to earn as much. This is not to say for a second that this is not a problem, but it does not instantly point to racist employers.

The statistic that does stick out is the difference between people who have earned a university degree. One would imagine that differences caused by social background could be ironed out by university education, but the gap is 12.8% – which is statistically significant. So why do black graduates earn so much less?

There have been multiple stories in the past few years of race imbalances at Oxbridge. It is a safe assumption that Oxbridge alumni earn more than other graduates, and hardly any of these graduates are BAME. This problem could be attributed to low application numbers from BAME students, rather than any active discrimination. However, we then get a further question – are the low application numbers from BAME students because they achieve less at school, or are they in some way discouraged from applying to these universities?

Lets have a look at A Level performance in response to these questions. In the graph below we see Black students underperforming, especially when it comes to the levels of exceptional results (AAB). So, this is partly why we do not see as many Black students applying to Oxbridge or getting places at the top flight of universities. What is driving this discrepancy?

graph

The blue line shows the number of UCAS points achieved and the red line the percentage of students achieving AAB with at least two facilitating subjects (biology, chemistry, physics, mathematics, further mathematics, geography, history, English literature, modern and classical languages). N.B. Data from FOI request to the Department for Education. https://www.whatdotheyknow.com/request/gce_a_level_outcomes_by_ethnicit

Clearly, A level performance affects the quality of university one can attend. So, the graph above can explain why some BAME students do not attend the best universities. But what about performance once they are accepted? Well, once again the difference is also apparent.

graph2

http://webarchive.nationalarchives.gov.uk/20130401151715/http:/www.education.gov.uk/publications/eOrderingDownload/RW92.pdf

As you can see above, 13% of white students are getting firsts, whereas only 3-5% of black students are achieving the same grade. We also see a significant difference in the academic achievement of black and Asian students; which may go some way to explaining the difference we saw in graduate earnings between these two groups. There is certainly a correlation between degree classification and earning potential (getting a 2:1 earns you an average of 7% more than a 2:2). The reasons why there is this different in achievement between ethnicities is a question to be answered another time.

One’s degree classification however, is only one factor that will contribute to one’s earnings potential. Engineering graduates will, on average, earn more than psychology or arts students. If you do Medicine or Computer Science, you are more likely to get a professional job after university than if you do English. So are there racial imbalances between certain subjects?

graph3

Graph made using 2009/2010 data from the Higher Education Statistics Agency

Well, once again we see a difference. There are fewer black students doing Engineering and more doing humanities.  If the discipline make-up of graduates differs by race, it can be expected that the earnings by race will be affected thus. Now, why the subjects studied differs so much by race is another question in itself that I imagine an entire thesis could be written about.

This post has certainly not disproved that there may be racism on the part of graduate employers, this may certainly still be a factor. Furthermore, we have only started to scratch the surface of this issue. It would be possible to fill up NOTA’s pages on this topic for the next six months, and I think most people would stop reading after week four or five. But the point to be made is this; it is not as simple as looking at these statistics and assuming racism on the part of employers is the complete problem.

But what the numbers do show is that there is a problem that cannot be explained away. As with the gender pay gap, this does show an issue within society, but it is deeper than just the knee-jerk reaction of sexism and racism. There are other factors going on here that it is vital we understand.

As a society, we can’t look at these numbers and pretend that it is OK. It’s been highlighted above that black students are not applying to the best universities, are not choosing the best degrees to maximise their earnings (many choose interest over earning potential), and are not performing as well as white students throughout their academic careers. We need try and understand why.

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