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Reporting and responding to ethnic pay gaps

The Race Equity Series

The Race Equity Series (RES) is part of the Home Truths 2 programme and its work to stimulate mainstream civil society to take serious practical action on anti-racism and race equity.

In part two of the series, we focus on ethnicity pay gap reporting and how civil society’s racism problem can manifest in terms of unjust and harmful pay arrangements for Black and Minoritised Ethnic staff.

The ethnicity pay gap measures the difference in the average pay between Black and Minoritised Ethnic staff compared to white British staff and can be calculated for an organisation, industry or society.

Ethnicity pay gap reporting is one way to understand how Black and Minoritised Ethnic people are situated in an organisation and society more generally.

Low levels of reporting but high gaps

In 2020, the first Home Truths report recommended that civil society organisations calculate and report on their ethnicity pay gap. But by September 2023, just 11% (27) of the top 250 charities by income were doing so.

One possible reason for the relatively low levels of ethnic pay gap reporting is that it exposes organisations to criticism. However, transparency is part of having an honest conversation on how racist practice can impact pay disparities. Data out in the open can ensure scrutiny and accountability and can create institutional and sector-wide impetus for change.

For the 27 top charities by income who did report, there was a median ethnicity pay gap of 22% in favour of white staff. This unfolds as follows: a median salary for white staff of £25,000 would translate into a figure of £19,500 for Black and Minoritised Ethnic staff. A stark difference.

Behind the gaps

The immediate cause of ethnic pay gaps in organisations and across society is an over-representation of Black and Minoritised Ethnic people in relatively low-paid roles and occupations. This distribution is in turn driven by a web of overlapping institutionalised and structural factors. These include recruitment and progression practices, educational attainment, previous work experience, family wealth, nationality and widely-held perceptions of what excellence looks like.

These factors are in different ways themselves informed by ‘race’ and racism. And the challenge for institutions seeking to contribute to anti-racist efforts is to rise above these drivers to end disparities and embed equity.

A bigger picture

The ethnicity pay gap calculation can be a gateway to addressing broader issues.

It can emphasise the need to build solidarity across populations and experiences. For example, women and people who are disabled face pay gaps. And Black and Minoritised Ethnic people who fall into another marginalised category may find their pay problems multiply.

Exploring and reporting pay gaps can increase pay transparency and worker rights. It can help to ensure that workplaces can play their part in pursuing equity rather than reproducing and amplifying inequity.

To learn more about reporting ethnicity pay gaps and what this means for you and your organisation, please join our second Race Equity Session event from 2pm-3pm on 11 July 2024 to continue the conversation.

You will find a friendly and stimulating setting to consider anti-racism and race equity and what it can mean in practice for civil society and your organisation. We’ll explore the topic with input from Sanjiv Lingayah, Home Truths 2 race equity lead, wise words from a knowledgeable guest speaker and a guilt-free, curiosity-driven and practical discussion with participants.

We look forward to seeing you.

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