Typical Bangladeshi household incomes are £8,900 a year lower than the White British medianby Adam Corlett / August 10, 2017 / Leave a comment
We talk a lot about certain types of income inequality—the recent outcry over unequal pay at the BBC springs to mind—but the specifics of ethnic economic inequalities rarely get enough air time. Though only scratching the surface of such a complex topic, my recent Resolution Foundation briefing on the gaps in household incomes for different ethnicities sought to explore how different groups are faring and how that’s changed over time. The results, while encouraging in places, were striking in their disparity.
The headline figures showed us that large living standards gaps between different ethnicities persist in Britain. Typical Bangladeshi household incomes were £8,900 a year lower than the White British median; Pakistani households £8,700 less and typical Black African households £5,600 less.
These gaps become even larger when housing costs are taken into account. Whereas over half of White British families own their home, only one in four Bangladeshi, Black and Other White (primarily European) families do. As a result, the disposable income gap between White British households and Bangladeshi households increases to £9,800 (44 per cent) when housing costs are considered.
But some progress has been made over the long-term, with the gap between ethnic groups narrowing in places. Bangladeshi households experienced the fastest income growth of all between 2001-03 and 2014-16—38 per cent in real terms, nearly three times the 13 per cent for the White British group. Pakistani households have also seen catch-up growth of 28 per cent over the same period.
“Pakistani and Bangladeshi women have seen their employment rate soar by 10 and 18 percentage points respectively between 2001-03 and 2015-17”
Of course, employment gaps are a big factor in explaining household income differences, as well as in explaining how these have changed. Pakistani and Bangladeshi female employment is very low relative to White female employment (37 and 35 per cent compared to 72 per cent), but Pakistani and Bangladeshi women have seen their employment rate soar by 10 and 18 percentage points respectively between 2001-03 and 2015-17, partially closing the gap. Employment rates for Pakistani, Bangladeshi and Black men have also increased substantially, with growth of 10, 17 and 6 percentage points respectively since 2001-03, while the rate among white men has been flat.
In addition to employment growth, changes in earnings are feeding through into strong income growth…