Almost 2 million Black, Asian and minority ethnic workers are paid £3.2 billion less each year than white employees, a think tank has found.
BAME employees have over time earned less than white male workers, the Resolution Foundation said.
It added that the pay gap is in part down to “differences in workers’ qualification levels and the type of jobs they do”.
But analysis by the think tank, even when accounting for differences such as industry, education and contract type, found that black, Indian, Pakistani and Bangladeshi workers face significantly lower pay than white workers.
This is despite a rapid rise BAME graduates entering the labour market in recent decades.
Research found that having a degree does not end the loss in pay facing BAME workers. In fact, black male graduates face the biggest pay penalties of all groups in the analysis, losing out on an average of £3.90 an hour, or 17% lower pay.
Pakistani and Bangladeshi male graduates are paid £2.67 an hour less than white workers, or 12%. Among female graduate workers, black women face the biggest pay penalty of £1.62 an hour, or 9%.
“After the successful steps taken to expose and tackle the gender pay gap in 2018, we now need greater accountability on the ethnic pay gap in 2019”
- Kathleen Henehan
Among non-graduates, Pakistani and Bangladeshi men faced the biggest pay penalties with 14% lower pay, or £1.91 less per hour, while black men are paid 9% less than white men, or £1.31.
The pay gap among female non-graduates stands at 61p for black women, or 6%, 55p for Bangladeshi and Pakistani women, 5%, and 44p for Indian women, which is 4% lower than white women.
The Foundation is urging “prompt government action” in response to the figures, starting with making large firms report on their BAME pay gaps in the same way they are made to report on their gender pay gap figures.
Kathleen Henehan, of the Resolution Foundation, said that despite the progress, firms should be given “greater incentive” to tackle the ethnic pay gap.
“Many of Britain’s 1.6 million black, Asian and ethnic minority workers face significant disadvantages in the workplace,” the research and policy analyst said.
“Black and ethnic minority workers still suffer significant pay penalties compared to white men and women doing the same types of jobs, and are collectively losing out on £3.2bn a year.
“After the successful steps taken to expose and tackle the gender pay gap in 2018, we now need greater accountability on the ethnic pay gap in 2019. The government can make this happen by requiring large firms to report their BAME pay gaps alongside the reporting they’re already doing on gender.”