Saturday, June 20, 2020

Racial Inequality

Data shows that people of colour are worse off than white counterparts and black households face the biggest deficit.

The ethnicity gap does not stop at pay – the inequality that begins there runs through everything involving money. Almost across the board people of colour are worse off than their white counterparts and, typically, black households face the biggest deficit. Compared with white households they have lower earnings and less cash in private pensions, investments or other assets to draw on.

Data shows that in the last year for which figures are available, black people had the highest unemployment rate of all groups; were most likely to have a household income below £400 a week; and, after Bangladeshi households, were most likely to claim income-related benefits. Only 8% of black pensioner families drew any income from a personal pension.

Research from the Runnymede Trust shows the vast differences in wealth and assets between households of different ethnicity. The figures show that that for every £1 a white British family has, black Caribbean households have about 20p and black African and Bangladeshi households approximately 10p. Accumulated assets offer a safety net when things go wrong and can be passed down through generations.

Some of the issues are explained by the demographics of the community: black people are generally younger and live in cities, so may have higher living costs and have had less time to build up wealth. Plus, some pay gap figures reflect inequalities around education and opportunity.
However, two years ago, the Resolution Foundation thinktank found black male graduates were being paid 17% less than white male graduates – the equivalent of £3.90 an hour or £7,000 over a year. For black women, the “pay penalty” was 9%, or £3,000 over a year.
Otegha Uwagba is a writer and the founder of Women Who. She is working on a book called We Need To Talk About Money, which will be published next year. She says people often make the argument that the pay difference is a result of people clustering around low-paid industries. “But even when you compare people with identical qualifications doing identical jobs in the same geographical area, there is still a difference in pay,” she says. “It’s hard to find any other reason for that beyond racism.” She adds: “Why aren’t we doing the same thing with mandatory disclosures around the ethnicity pay gap as we have around the gender pay gap? Racism is a really ugly part of British history that people just don’t want to face up to.”
Most people’s biggest asset is their home and Uwagba says she was shocked when she saw figures showing the low level of property ownership among black Africans. While 63% of families across England own homes, the figure is only 20% among black Africans. “When you think about how people are buying homes, especially in London, and how many are relying on the bank of Mum and Dad, you can see how income disparities are perpetuated through the generations,” she says. “Money begets more money. Discrimination compounds things and wealth and income gaps are passed on to the next generation.” Even when the inequalities in pay are ironed out, it will be some time before all the other gaps are closed. With fewer assets to pass down, the problem grows. It is not only the wealth that accumulates, but also the knowledge about how to make the most of your money.
Among FTSE 100 companies, 62.% of board members are white males and they occupy 84% of executive directorships, according to the DiversityQ FTSE 100 board diversity report 2020. Fewer than one in 10 directors is black, Asian or minority ethnicity.
Cheryl Cole, the editor of DiversityQ says, “People continue to hire in their likeness – they recruit from the same small pool of candidates who went to the same small pool of universities and have the same background.” 
Things are “dire” in fund management, says Cole. Of 100,000 employees, 10% identify as Asian and only 1% as black, and the industry has only 13 black portfolio managers, according to a Diversity Project report.

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