Labour Research April 2013


Young, gifted and blocked

Historically, black and minority ethnic people have been at a disadvantage in the labour market — and things don’t appear to be looking up much for today’s minority ethnic youth.

For years, the Stephen Lawrence Charitable Trust has been committed to helping young people from disadvantaged backgrounds break into careers in architecture and urban design.

And the national education charity bearing the name of the black teenager who was murdered in a racist attack is now stepping this up through its “SL20” campaign. The campaign will run throughout 2013 — the year that marks the 20th anniversary of Stephen’s murder — and celebrate Stephen’s legacy.

Access to professions

Building on lessons learned from delivering bursaries to over 100 budding young architects — Stephen’s intended profession — the trust is now extending that to other disciplines.

Its “access to the professions” programme involves a different take on social mobility, helping young people progress into high-flying careers in very specific and detailed ways.

A spokesperson told Labour Research: “It’s not just about bursaries, its about supporting the transition from one world to another, through mentoring, targeting, informal mechanisms — whatever it takes — and helping businesses understand the part they need to play.

“They need to look for talent in places they haven’t thought of looking before, if not for A-star grades, then for ‘A-star brains’.That’s the thinking behind our national scholarship programme with [lawyers] Freshfields Bruckhaus Deringer, and in 10 years we really hope to see a Black partner at the law firm”.

The fact that the kind of work the trust is doing is necessary to allow some young people achieve their potential speaks volumes for the hurdles many young, and particularly black and minority ethnic (BME), people face.

Youth unemployment

For example, youth unemployment is on the rise, with 974,000 or one in five 16- to 24-year-olds, looking for work. It’s a poor record by international standards and, 20 years on from Stephen’s murder, we know unemployment rates for young BME people like him are even worse.

Early last year, the Department for Work and Pensions revealed that the unemployment rate was 44% for young black people and 31% for all ethnic minorities compared with 20% for young white people. The 2012 rate for young black men was 49.2%.

The issue will receive an airing at this month’s TUC Black Workers’ Conference, with a motion by the NASUWT teachers’ union which calls on the conference to condemn “the coalition government’s failure to act to tackle the growing youth unemployment crisis”.

The rate of unemployment is the proportion compared with the economically active population, excluding those in full-time education unless they’re looking, and available, for work. BME young people are more likely to stay on in education (although they are over-represented in lower-status institutions and less likely to emerge with first class degrees.) So if those remaining in education are counted too, BME youth unemployment amounted to 14%, compared with 13% for young white people.


But if these lower figures make the problem appear less serious, a quick look at the statistics for apprenticeships soon dispels that idea.

BME young people apply for around 22% of apprenticeship places but get only 10% of the placements, so something is clearly going wrong.

The TUC wants to see urgent action in this area, with improvements in careers advice, promotion of recruitment best practice and positive apprenticeship images, and improved equality and diversity training.

It acknowledges that different levels of awareness of the apprenticeship programme may account for some of the disparity, but says race discrimination affecting black workers more generally in the labour market is also likely to be a key factor.

Dr Omar Khan, head of policy research at the Runnymede Trust race equality think tank, agrees that there may be specific problems underlying this disappointing trend that either the government or National Apprenticeship Service could address.

He says one possibility is that the apprenticeships on offer are not in the areas BME young people live in, pointing to the need for better targeting to key towns and cities including London. Another factor could be the “benefit trap”, where even small apprenticeship pay packets potentially reduce overall household income, affecting eligibility to benefits in often low-income families.

A third possibility is that “BME young people may be finding their way into apprenticeships less likely to lead to a job — for example in construction, still suffering from the recession; or hairdressing where there are far more apprentices than jobs”.

Access to employment

But standing behind these specifics is the continuing ethnic penalty in access to employment. Khan acknowledges that the ethnic “jobs gap” has narrowed compared with the mid-1990s when the economy was coming out of recession.

But he feels things are not necessarily much better now than they were in the mid-1980s.

“With the increasing proportion of BME young people who are British-born and educated, we’d expect to see some reduction in that employment gap compared with their parents who were at a disadvantage in being less qualified, lacking the social networks, and perhaps having language problems,” he said.

He added that there is still a problem, for example, in the experience of Chinese graduates who do better at school but worse in the labour market than their white counterparts.

Similarly, there is a problem in the unemployment rates affecting British-born young black people, which remain comparable with those faced by their migrant fathers and mothers.

“It would not be fair to say that there has been no improvement, or that some BME young people aren’t finding their way into middle class jobs. But it’s a very mixed picture and the ‘ethnic penalty’ is still a factor,” said Khan.

Looking back to the 1990s, recovery from recession brought an improvement in BME employment rates, the 2001 Census showed.

Employment and BME people

According to the 1991 Census, the employment rate for white men was 76.8%.

For men in specific black and minority ethnic (BME) groups the rate ranged from 45.8% to 69.8%, leaving a gap of at least seven percentage points. The rate was 62.9% for white women and between 12.4% and 63.1% for female BME groups.

By 2001, the Census employment rate for white British men was 77.8% (separate figures were quoted for white Irish and “white Other”). For men in specific BME groups the range of rates had narrowed at the lower end, at between 55.4% and 71.3%. The rate was 69.1% for white British women and between 21.4% and 66.1% for female BME groups.

By 2006-08, around 80% of white and Indian men were in paid work. But the rate was lower for other groups at between 59% and 70%. Differences were larger for women than for men.

In 2012, the Labour Force Survey employment rate for white men was 77.9%, very similar to the 2001 rate (although from a completely different source).

For men in specific BME groups it ranged from 52.3% to 78.7% (the upper figure, for Indian men, was the only BME rate that was higher than for white men).

The rate for white women was 68.8%, and ranged between 30.7% and 64.0% for female BME groups.

The Joseph Rowntree Foundation (JRF) concluded that some BME groups such as Chinese and Indians had fared “relatively well”. Others such as Pakistanis and Bangladeshis had not and the JRF said it would be “misleading” to suggest that progress had eliminated ethnic minority disadvantage.

A 2008 National Audit Office report confirmed that the overall employment gap was 14.2 percentage points.

While Indian and Chinese groups had similar employment rates to those of white people, Caribbeans, Africans, Pakistanis and Bangladeshis were “faring much worse”.

The latest 2012 figures suggest that the employment rate for Indian workers is now a little above that for white workers, but it is lower — in one case by as much as 25 percentage points — for other BME groups. Cutbacks in the public sector where many BME workers are employed could see a deterioration in their employment rate.

The employment rates include self-employment, traditionally seen as an important route into work for Asian men. In fact, BME workers born in the UK were less likely to be self-employed than white workers and, by 2010, only Pakistani men had higher self-employment rates than white men or women.

Pay gap

Tracking trends in occupations and pay over time is more complex because data sources vary and factors like education, training, industrial sector, location and hours are important. Most sources indicate a continuing gap between white workers and most BME groups although in a report by the National Equality Panel, An anatomy of economic inequality in the UK, the gap is reversed for white British women whose median gross hourly wages were below those of most BME groups (based on 2006-2008 Labour Force Survey data). Rates of part-time working may have been a factor in this.

One recent report managed to calculate changes between 1993 and 2008, concluding that the overall pay gap between white people and non-whites has increased, mainly because of non-whites finding it harder to get into well-paid jobs.

But even where the two groups worked in the same trade or profession there was still a pay gap of 18p an hour.

Pay gap continues despite some progress

Over the decade to 2001, black and minority ethnic (BME) groups made progress into professional/managerial jobs (mainly among Black Caribbean men).

But men from most minority groups also moved into unskilled/partly-skilled occupations.

However, graduates — especially women — found it increasingly difficult to obtain top-level jobs.

Despite some progress into professional jobs, in 2002-2005 BME male earnings were lower than for white men after controlling for personal and other factors including occupation, according to data from the Joseph Rowntree Foundation and the Labour Force Survey. The gap ranged from around 10% for Chinese, Black Caribbean and Indian workers to about 15% for Pakistani and Black African workers, and 20% for Bangladeshi workers.

Equivalent female earnings gaps were generally smaller: just over 3% for Black Caribbean workers, around 7% for Indian and Pakistani workers, 8% for Bangladeshis and nearly 10% for Black Africans.

By 2004-2007, Muslim men, whether Bangladeshi or Pakistani, earned less than might be expected given their qualifications, age and occupation, according to the Equality and Human Rights Commission.

This was by 13% for Bangladeshi men and 21% for Pakistani men. Black African Christian and Chinese men also experienced pay penalties of 13% and 11% respectively.

By 2006-2008, (apart from the small Mixed white and Asian group), the median wage was highest for Chinese men, at £12.67 an hour, followed by white British men at £11.35.

The “Other Mixed” group male median was £11.25; for Indian men £11.15; and for Black Caribbean men £10.34.

Further down the spectrum it was £7.74 for Pakistani men and £6.90 for Bangladeshi men.

In a change from other data sources, the National Equality Panel found that the wage gap for women was reversed: Black Caribbean women had the joint highest wage at £10.51 an hour and white British women were in the lower third of rates on a median of £8.83.

Between 1993-2008, the average earnings gap between white and non-white people increased from 18p an hour to 43p, according to research by the Institute for Social and Economic Research at the University of Essex.

Statistics tend to highlight the “diverse” experience of different ethnic minorities, with the categories becoming increasingly complex. Consistently low employment rates among Pakistani, Bangladeshi and Muslim women have attracted comment, and religion, education and neighbourhood deprivation have been put forward as possible influences.

But Wilf Sullivan, TUC race equality policy officer, cautions against trying to “over-culturalise” differences, pointing out that there has always been a problem with labour market segmentation.

For “ethnic penalty” he reads “discrimination”, insisting that it’s about “access to the labour market”. His comments are backed by research which includes a 2012 report by the All Party Parliamentary Group on Race and Community. This focused on Black, Pakistani and Bangladeshi women and found discrimination “present at every stage of the recruitment process”.

Over the last 20 years, the overall strength of the BME population in England and Wales has doubled, rising from 7% in 1991 to 14% in 2011. And it has more than doubled numerically, from three million to seven million, as well as becoming more diverse. This can only increase pressure for apprenticeship and labour market improvements.

By 2011, workers belonging to a non-white ethnic group already made up 9% of all employees, according to the latest Workplace Employment Relations Study, and more are coming up through the education system.

Sandra Kerr, national campaign director of the business campaign Race for Opportunity talks of an “emerging” workforce with one in six UK-domiciled students from a BME background, one in five secondary school students and one in four primary school children.

The TUC’s Wilf Sullivan wants more government action to change the behaviour of private sector employers. “If we regulate to change behaviour, a change in thinking will follow,” he said.

If things are to improve for BME youth, the government will need to decide which way to jump on these and a range of other practical issues affecting young people, as well as on its general approach to race equality.