Black and Excluded
Embargo: 00.01 Monday 6 December
black and asian workers in the 1990s
black and excluded
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1.1 In spite of an expanding jobs market since the end of the recession in 1993, a disproportionate number of black people continue to find themselves at an unfair disadvantage in the labour market. Using the latest labour market statistics, this report looks at how black workers have fared in the 1990s and the overriding conclusion is that discrimination remains widespread. The statistics show that, as we approach the millennium, ILO unemployment among black people is two percentage points higher (at 13 per cent) than at the beginning of the decade while unemployment among white people has dropped back to the low point (6 per cent) reached in 1990.
1.2 The report also highlights how discrimination in the labour market in the 1990s has been further reinforced by geographical factors, with the vast majority of black people in the UK residing in urban areas and a disproportionate number of them living in inner city areas with very high levels of unemployment. Nearly three quarters of all black unemployed people in the UK now reside in just three major urban conurbations - London, the West Midlands conurbation, and the Greater Manchester conurbation. With the exception of Outer London, black unemployment in these areas is now running close to 20 per cent and the rate has increased in the latest 12-month period in both Inner London and the West Midlands conurbation. In the case of Inner London, this increase among black residents has occurred against a backdrop of falling unemployment among white residents and a very buoyant jobs market.
1.3 The report also looks at the average earnings of black employees and how this has been affected by the introduction of the minimum wage. This analysis shows that, overall, black workers have seen a greater proportional increase in their average pay in the latest 12-month period. This is not too surprising considering that a greater proportion of them are employed in those industries with a tradition of low pay. Furthermore, the analysis shows that the average pay of black employees still lags behind that of white employees.
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2.1 Most of the data in this report comes from the Labour Force Survey, a large sample household survey carried out each quarter by the Government. The LFS uses International Labour Organisation (ILO) definitions of unemployment and employment and provides detailed data on the labour market position of black workers. Much of the data in the report has been accessed direct from the LFS database and this has been supplemented by additional LFS data drawn from recent analyses by the Office for National Statistics published in the monthly journal, Labour Market Trends.
2.2 Unless otherwise stated, the statistics refer to Great Britain (GB) and are not seasonally adjusted. It should be taken into account that there is a greater degree of sampling variability in LFS statistics on black workers because of the smaller sample size involved and in the case of regional analyses this means that reliable figures cannot be provided for certain parts of the country. The most recent data is drawn from the LFS summer quarter (i.e. June to August 1999) database. However, some time comparisons have to use the Spring quarter as prior to 1993 the LFS was only carried out once a year in that quarter. Furthermore, some of the analyses in this report use 1992 as the starting point because of some significant changes introduced in that year (e.g. changes to ethnic minority classifications used in the LFS).
2.3 Currently the LFS provides information on ethnic minority groups using the following classifications - white, black (Afro-Caribbean); Indian; Pakistani/Bangladeshi; Chinese (when the sample size is big enough); and "Other" (including those of mixed origin). Throughout this report the term "black workers" (and "black people") refers to the total number of individuals from all the non-white ethnic minority groups.
Labour Market Exclusion
3.1 This part of the report looks at the three main measures of labour market exclusion measured by the LFS:
ILO unemployment - those aged over 16 who have been looking for work in the past 4 weeks and who are available to start work within 2 weeks; | |
employment rate - percentage of working age population in employment (including employees, self-employed, government-supported trainees and unpaid family workers); and | |
economic inactivity rate - percentage of the working age population who are jobless but who are not defined as ILO unemployed because they have not been actively seeking work. |
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3.2 As shown in the chart below, the ILO unemployment rate for black people, at 13 per cent, is now (i.e. Spring 1999) two percentage points higher than it was at the equivalent point in the economic cycle (i.e. Spring 1990, when ILO unemployment reached its lowest point before the onset of the last recession). In the same period the ILO unemployment rate for white people has returned to its 1990 level - 6 per cent - and this means that the gap between the two unemployment rates has widened during the 1990s. This trend suggests that black workers were hit harder by the last recession than white workers and that they have not benefited to the same degree from the subsequent recovery in the jobs market. There is a strong regional dimension to this trend, e.g., the fact that the last recession hit the south of England as much as the rest of the country, and especially London, with its very high concentration of ethnic minority residents (for a more detailed regional analysis, see page 5).
3.3 As shown in the table below, the rise in ILO unemployment among black people since 1990 has been fairly uniform from a gender perspective, with the rate increasing from 11 to 13 per cent for both sexes. In contrast the unemployment rate for white women in the same period fell from 6 per cent to 5 per cent and this means that the gap between the unemployment rates for black and white women has widened considerably in the 1990s, from 5 percentage points in 1990 to 8 percentage points in 1999. The detailed data in the table show that the main reason for this has been the substantial increase in unemployment among Afro-Caribbean women in this period (up from 10 per cent to 14 per cent).
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ILO Unemployment Rates - by Ethnicity & Gender Spring 1990 and Spring 1999 (GB, not seasonally adjusted) | ||||||
All | Men | Women | ||||
1990 | 1999 | 1990 | 1999 | 1990 | 1999 | |
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White People | 6% | 6% | 7% | 6% | 6% | 5% |
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Black People | 11% | 13% | 11% | 13% | 11% | 13% |
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(Afro-Caribbean) | 12% | 15% | 14% | 16% | 10% | 14% |
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(Indian) | 10% | 9% | 9% | 9% | 11% | 9% |
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(Pakistani/Bangladeshi) | 17% | 18% | 15% | 16% | 25% | 21% |
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(Other) | 9% | 14% | 11% | 13% | 8% | 14% |
3.4 This table also highlights the wide variation in unemployment rates among different ethnic groups and the extent to which gender is a key factor in the equation. It also emphasises how the change in unemployment during the decade has not been uniform across all ethnic groups, and how in some cases there have been contrasting trends for men and women from the same ethnic group.
3.5 People from the Pakistani and Bangladeshi communities continue to have the highest rate of unemployment, at 18 per cent, and this has increased by one per cent since 1990. Women from these two ethnic groups have a very high unemployment rate - 21 per cent - although there has been some decline since 1990, when it was 25 per cent. In contrast unemployment among men from these two communities has increased from 15 per cent to 16 per cent and this means that the gap between the respective unemployment rates for men and women halved over the decade (a gap of 5 percentage points now compared to 10 percentage points in 1990).
3.6 The largest increases in unemployment during the decade have occurred among people from the Afro-Caribbean community and the unclassified ethnic groups grouped together in the LFS under the "Other" classification. Overall, the unemployment rate for Afro-Caribbean people increased from 12 per cent in 1990 to 15 per cent in 1999 and the latter group recorded an even larger increase (up from 9 per cent to 14 per cent). While unemployment rose for both men and women from these two groups, there was a greater proportional increase in female unemployment rates.
3.7 Afro-Caribbean women recorded an increase of 4 percentage points (compared to an increase of 2 percentage points for Afro-Caribbean men). The rate for women from the "Other" category increased by even more, up by 6 percentage points (compared to an increase of 2 percentage points among men). Only people from the Indian community recorded an overall fall in unemployment during the decade, with the rate falling from 10 per cent to 9 per cent. This was largely triggered by a fall in unemployment among women (down from 11 per cent to 9 per cent) while the rate for Indian men is now the same as in 1990, standing at 9 per cent.
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3.8 Due to small sample sizes it is not possible to provide a breakdown of the unemployment rates of black people in all parts of the UK. Having said that, there is reliable data for around half the regions in the UK and this data is set out in the chart below. This shows that the highest unemployment rates for black people are to be found in the West Midlands (17 per cent), the North West (16 per cent), and London (14 per cent). In these areas the disparity between the unemployment rate for white people (6 per cent in all these 3 regions) and black people is much greater than at the national level.
3.9 The higher rates of unemployment among black people in these three regions is crucial because the LFS shows that around 70 per cent of all black people in the workforce (i.e. either employed or ILO unemployed) reside in them. In addition, the LFS statistics show that three quarters of all black unemployed people in GB are to be found in these 3 regions alone - London (51 per cent); West Midlands (16 per cent); and, North West (8 per cent). A sub-regional analysis (see table below) shows that the vast majority of unemployed black people in GB reside in London and two other major conurbations - Greater Manchester in the North West region and the West Midlands Metropolitan County (i.e. the conurbation centred on Birmingham) in the West Midlands region.
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ILO Unemployment - London, West Midlands conurbation and Greater Manchester Summer 1999 (not seasonally adjusted) | ||
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ILO Unemployment Rate |
% of all Unemployed People | |
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Black people White people |
Black people White People | |
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Inner London | 19% 7% | 30% 5% |
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Outer London | 10% 5% | 22% 6% |
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West Midlands Metropolitan County | 18% 8% | 15% 5% |
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Greater Manchester | 19% 6% | 6% 5% |
3.10 The ILO unemployment rates in these highly urbanised areas are especially high - just falling short of 20 per cent in three of them - and these conurbations alone account for nearly three quarters (72 per cent) of the black unemployed population in GB. The ILO unemployment rates for black people in these conurbations are also much higher than for white residents, e.g., in Greater Manchester it is more than three times greater (respectively 19 per cent and 6 per cent). These very high rates of black unemployment in these conurbations reflect both the concentration of black people in the most deprived areas, especially inner city wards, and the increasing degree to which the black population is excluded from the wider jobs market in these cities.
3.11 It is also very worrying that in spite of overall falls in ILO unemployment in the past year, two of these conurbations have recorded an increase in black unemployment compared to a year ago (i.e. summer 1998). The LFS shows that the black unemployment rate increased from 17 per cent to 18 per cent in the West Midlands conurbation and from 18 per cent to 19 per cent in Inner London (Greater Manchester showed no change and Outer London fell from 11 per cent to 10 per cent). While the increasing rate of black unemployment in the West Midlands can partially be explained by the heavy job losses in manufacturing suffered by this region in the past year, which has also led to an increase in unemployment among the white population, this is certainly not the case in Inner London. ILO unemployment among white residents in Inner London has fallen in the same period (down from 8 per cent to 7 per cent) during this period of strong jobs growth across the capital (75,000 additional new jobs).
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3.12 Changing trends in the employment rate of working age people during the 1990s (as shown in the chart below) also confirms how the recession of the early 1990s has had a longer-term adverse impact on the job prospects of the black population. The dip in the employment rate for black people was much deeper and although it recovered some of this lost ground, it has dipped down again recently. This most recent fall - a 1 per cent decline between 1998 and 1999 - is very depressing considering that this was a period of strong jobs growth during which the employment rate for the white population increased (up by 1 per cent). Overall, the gap between the employment rates of black and white people has widened in the 1990s, from 15 percentage points in 1990 to 19 percentage points in 1999. While the white employment rate has largely recovered from the recession (down slightly from 76 per cent in 1990 to 75 per cent in 1999), the black employment rate has fallen by 5 percentage points (down from 61 per cent to 56 per cent).
3.13 As shown in the table below, changing trends in the proportion of the working age population in employment during the 1990s varies considerably once the data is broken down in more detail by ethnicity and gender. In general this shows that:
the employment rate of black men fell by twice as much as white men - down by 6 percentage points - compared to a 3 percentage points fall for white men; and | |
the employment rate of black women fell by 2 percentage points compared to a 2 percentage points increase recorded for white women. |
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Employment Rates - by Ethnicity & Gender Spring 1990 and Spring 1999 (GB, not seasonally adjusted) | ||||||
All | Men | Women | ||||
1990 | 1999 | 1990 | 1999 | 1990 | 1999 | |
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White People | 76% | 75% | 83% | 80% | 68% | 70% |
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Black People | 61% | 56% | 71% | 65% | 50% | 48% |
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(Afro-Caribbean) | 66% | 61% | 70% | 66% | 62% | 57% |
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(Indian) | 66% | 65% | 77% | 74% | 54% | 56% |
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(Pakistani/Bangladeshi) | 43% | 40% | 63% | 57% | 20% | 21% |
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(Chinese) | 58% | 50% | 64% | 50% | 53% | 50% |
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(Other) | 66% | 59% | 73% | 66% | 58% | 52% |
3.14 However, these general trends are not replicated among all the ethnic groups. For example, the employment rate of Indian women increased by two percentage points while Chinese men saw a huge fall in their employment rate (down by 14 percentage points). The table also highlights how certain groups with very low employment rates, such as Pakistani and Bangladeshi women, saw little advance during the 1990s with still only a fifth of working age women from these communities in employment in 1999.
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3.15 Not surprisingly, a greater proportion of the working age black population is classified as being economically inactive compared to working age white people. According to the LFS, in Spring 1999 around 20 per cent of white people were inactive compared to around 35 per cent of black people. Economic inactivity rates refer to those jobless people of working age who are not classified as ILO unemployed in the LFS because they say they have not been actively looking for work. However, this group includes many people often referred to as the "hidden unemployed" (i.e. jobless people who are not technically classified as unemployed) and one element of this will be economically inactive black people who have simply stopped looking for work because of their experiences of discrimination in the labour market.
3.16 However, a positive reason accounting for some of the difference in the economic inactivity rates is the increasing proportion of young black people staying on in full-time education (most students are classified as "economically inactive" in the LFS) compared to young white people. LFS data for 1998 on the participation rates of young people (aged 16-24) in full-time education show that:
52 per cent of black young men were in full-time education compared to 29 per cent of white young men; and | |
44 per cent of black young women were in full-time education compared to 31 per cent of white young women. |
The Low Pay Trap
4.1 This part of the report looks at changes in the average pay of black and white employees recorded by the LFS over the latest 12-month period (summer 1998 to summer 1999), which covers the introduction of the National Minimum Wage (NMW) in April 1999. The analysis looks at changes in the average gross hourly pay of employees at these two points in time.
4.2 It should be noted that pay analyses of this kind are usually based on two data sources - the LFS and the New Earnings Survey - because both sources have drawbacks which can largely be reconciled from undertaking a dual analysis (in the case of the LFS, the drawback is that gross hourly earnings are known to be underestimated to some extent). However, the NES (unlike the LFS) does not provide earnings data broken down by ethnicity, and in spite of the tendency for the LFS to underestimate average pay, this applies equally in the case of both white and black employees. As a result the LFS is a fairly reliable source for identifying changing trends in average pay broken down by ethnicity.
4.3 The chart below shows the average gross hourly pay of black and white employees in summer 1998 and summer 1999 and this shows that black workers have seen a greater proportional increase during this period. The average gross hourly pay of black employees increased by £0.49 or by nearly 7 per cent, while for white employees the increase was £0.33 or just under 4 per cent. This suggests that the impact of the NMW has been disproportionately beneficial to black employees and that this larger proportional increase in average gross hourly pay has largely been generated by a boost to the pay of low-paid black employees.
4.4 This is supported by related data showing that a higher proportion of black workers are employed in those industries that had the highest percentage of employees earning below the NMW before its implementation in April 1999. For example, an analysis by the Office for National Statistics of LFS data (Labour Market Trends, Dec `1998) showed that the Hotels & Restaurants sector had by far the highest percentage of employees in this position (more than 3 times the UK average) at the beginning of 1998. The latest data from the LFS shows that 7 per cent of all black employees work in this sector compared to only 4 per cent of white employees.
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5.1 The findings of this report highlight that, overall, the 1990s has been a tough decade for black workers - they were hit harder by the recession and they have not had their fair share of the jobs growth in the recovery. The situation is very bleak in those urban conurbations where the majority of black people live and recent trends in the Inner London labour market highlight the extent to which strong jobs growth can completely bypass the black community. On a more positive note, the report does show that the introduction of the National Minimum Wage has benefited black employees to a greater degree, although this is also a reflection of the higher proportion of black workers locked in the "low pay trap".
5.2 The TUC recognises that there is no one policy measure which will instantly turn around the higher incidence of labour market exclusion and low pay currently experienced by many black people. However, achieving progress in the following policy areas is imperative if the beginning of the new millennium is to be remembered as a time when labour market discrimination was tackled head-on:
while the Government's initiative to introduce ethnic minority targets for the police, fire and probationary services are to be welcomed, much more needs to be done in this area, especially in extending this approach to the private sector, e.g., by making ethnic monitoring mandatory for employers; | |
the trade union movement needs to invest more time and resources in negotiating with employers to establish ethnic monitoring schemes for the recruitment, retention and the promotion of black and ethnic minority workers and in ensuring that monitoring statistics result in recruitment which reflects the make-up of the local resident population; | |
government action to reduce discrimination must be a high priority in all areas, but especially so in those deprived areas where a high proportion of the local population are black and may face double discrimination - this should be one of the key priorities of the Social Exclusion's ongoing programme of work; | |
the Welfare-to-Work strategy needs to address the issue of labour market discrimination from all angles, but some immediate priorities are to tackle the lower job outcome rates being achieved by black people participating in the New Deal programme and the need for the programme to maximise job creation targeted on the those who are most disadvantaged in the labour market; | |
targeted public investment measures (especially plans for the next comprehensive spending review) need to be focused on delivering extra investment to those areas where the existence of a "jobs gap" generates double discrimination for black people; | |
the National Minimum Wage needs to be uprated on a regular basis if it is to continue to act as an effective means of ameliorating the current discriminatory "pay divide", with a disproportionate number of black workers unfairly trapped in low paid work. |
Congress House, Great Russell Street, London, UK, WC1B 3LS. Tel: +44 020 7636 4030 Fax: +44 020 7636 0632 E-mail: info@tuc.org.uk Website: http://www.tuc.org.uk
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