The UK wants to make all big companies reveal their racial pay gaps

Audit to action.
Audit to action.
Image: Reuters/Henry Nicholls
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The British government has announced a plan to make it mandatory for all large companies to report pay gaps by ethnicity.

During Black History Month in the UK, prime minister Theresa May kicked off a three-month consultation today about whether ethnicity-based pay information should be reported, and which sorts of employers should be expected to report it. (The government recommends that companies over 250 employees should be required to do so.) The hope is to enforce reporting, because the voluntary release of this information is extremely low.

This could follow the system that was introduced to force companies to reveal their gender pay gaps. More than 10,000 employers publicly reported gender pay gaps, with three-quarters of companies paying men more than women.

The plan comes a year after the government’s race disparity audit and the launch of a website dedicated to collecting and tracking data on racial disparities in the country, covering everything from crime and health to education and income. It showed a complicated picture of racial inequality at different stages of life in the UK. For example, students in several ethnic groups outperformed white British pupils in school and were more likely to go on to get more education after turning 18. But data on income showed that most ethnic minorities were paid less than the national average, and were far more likely to be in the bottom income quintile.

Today, the British government also announced a “Race at Work Charter” designed to commit business to reduce racial disparities by, for example, increasing the number of people from ethnic minorities in senior positions. Officials also said efforts would be made to make the public sector more diverse, especially in leadership roles (more than 90% of senior civil servants are white). In London, an audit found that black and ethnic minority public employees were paid up to 37% less, on average, than their white counterparts.

These proposals have been welcomed, but they come from the same government with a history of negative treatment of ethnic minorities and immigrants. The “hostile environment” for immigrants created by Theresa May in her previous role as Home Secretary was linked to the forceful deportation of British citizens and their descendants who moved to the UK from the Caribbean after the Second World War, known as the Windrush generation. Research has shown that austerity measures imposed by governing Conservative party will also lead to a drop in the living standards of the poorest black and Asian households of about 20% from 2010 to 2020.

The Runnymede Trust, a British race equality think tank, said that the focus of today’s announcement on the labor market was positive. “However greater ambition and investment will be necessary to address the extent of inequalities,” said Omar Khan, the trust’s director. He warned there were still reasons to be skeptical, including that the measures are in the consultation phase, which means they are likely to be watered down over time.