Racial and Ethnic Disparities in the UK: Part 1

After this year’s anti-racism protests in the UK, which spread from the US after George Floyd’s death in police custody, Boris Johnson commissioned a report focused on highlighting racial and ethnic disparities in the UK. The report was initially scheduled for publication at the end of 2020 but has since been delayed and now will be published early in 2021. Racial and ethnic inequality and racism are sources of injustice in society. Given the delay in the UK’s race and ethnic disparities report, we thought it important to highlight some of the key disparities that can be found in the data. These disparities are likely to be discussed in the report and are areas where policymakers should focus to address the problem of racial and ethnic inequality in the UK. We have written two articles on this topic: part 1 focuses on inequalities in the economy and part 2 focuses on inequality in a broader set of social outcomes and experiences.

Note: We used guides on the GOV.UK website on the ONS website to instruct how we wrote about ethnicity and race in this article. For those interested, the GOV.UK guide can be found here and the ONS guide can be found here. Furthermore, as mentioned in the GOV.UK guide, the graphs presented focus on ethnicity rather than race because surveys that collect data usually ask about self-identified ethnicity and not a race.

Income

There are significant disparities between different ethnic groups in income.

Source: ONS – Annual Population Survey, 2019

(Link to source: Click here)

Note: The ethnic groupings are those used by the ONS. White and Black African, Black Other, and Arab ethnic groups had small sample sizes, so their median wages may be inaccurate.

Income inequality can be found in median hourly wages with minority ethnic groups tending to have lower median incomes. However, median hourly wage statistics do not show the full picture. How income is distributed, which can be seen below, is arguably more important.

PERCENTAGE OF INDIVIDUALS FROM A GIVEN ETHNICITY IN EACH INCOME BRACKET, 2016 - 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: GOV.UK

(Link: Click here)

Note: The ethnic groups used are those used by the source, GOV.UK. The groupings are limited because “Multiple Ethnic Group Background” is not divided into different groups, such as White and Black African or White and Asian, and “Black” is not divided into different groups, such as Black Caribbean and Black African. This means that the graphs may overlook some individuals’ experiences. Data is based on the 3-year average between 2016 and 2019.

Minority ethnic groups are clearly over-represented in the low end of the income distribution. This is an important disparity to address since income may contribute to other disparities, such as inequality in health outcomes.

Wealth

Although there are clear disparities in income across ethnicities, inequality in wealth is even more severe.

Source: ONS

(Link to source: Click here)

Notes: The ethnic groups are those used by the ONS. A limitation of the groupings is that “Multiple Ethnic Group Background” is not split up, which may overlook some individuals’ experiences. However, this may be because of a limited sample size. The “Black other” ethnic group was not included by the ONS due to limited sample size. Bangladeshi and Chinese ethnic groups had a limited sample size, so their median wealth may not be representative of Bangladeshi and Chinese ethnic groups in Great Britain.

Households from a White British background have the highest median wealth, which is more than 9X the median wealth of households from a Black African background. Disparities in wealth are especially worrying since wealth tends to accumulate across generations meaning inequalities in wealth may be long lasting unless they are addressed.

Home Ownership

Source: GOV.UK

(Link to Source: Click here)

Notes: GOV.UK did not include the White Gypsy or Irish Traveller ethnic group, which is one of the 18 ethnic groups that the government recommends are used (see here), because of a limited sample size.

Homeownership is linked to wealth since people tend to store a lot of their wealth in their homes. It is, therefore, unsurprising that there are also severe disparities in homeownership between ethnic groups.

Unemployment

Source: GOV.UK

(Link to Source: Click here)

Note: The groups are those used by GOV.UK. One limitation of these groupings is, again, that some of the groups are not divided. For example, Multiple ethnic group backgrounds could be divided into several different groups which may overlook the separate groups’ experiences.

The average unemployment rate for those from a White British background between 2012 and 2018 was 5.3% compared to 12.7% amongst those from a Black background and 12.9% amongst those from a Pakistani or Bangladeshi background. This is a significant disparity that may partially explain the inequalities in wealth and income highlighted above and must be addressed to achieve equality.

Conclusion

This article has highlighted some of the key financial inequalities between different ethnic groups in the UK. Not all inequalities have been highlighted. However, it is clear that members of minority ethnic groups, on average, tend to be worse off, which is unjust and must be addressed. The Runnymede trust released a report in April 2020 focused on the issue of racial inequality in the economy which can be found here. The report analyses inequalities in the UK economy and suggests how inequalities could be addressed by policymakers. Addressing the significant disparities in the economy is especially important because personal finances have a large effect on peoples’ lives.

In part 2 of this series, which can be found here, we highlight some of the inequalities found in broader society.

Assumptions 2020 team, 20th December 2020

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