Ethnicity and Labour Market Disparity - Essay Example

RUNNING HEAD: ETHNI AND LABOUR DISPARITY Ethni and Labour Market Disparity School Ethni and Labour Market Disparity Discrimination in the work place is a sad reality. Too often capable applicants are not considered for employment merely because of their gender, race, ethnicity, age, sexual orientation or a host of other factors. Although governments can dictate via law that discrimination is illegal, but that alone will not help solve the problem. It will require a greater understanding of and appreciation, by all of us, of the uniqueness of each individual, as well. The practice of discrimination is not sporadic or limited to specific areas. It is a global problem as no country is free from it, well including the UK. Unfortunately, as this issue has increasingly come under the scrutiny of lawmakers and the public, instead of finding ways to educate and increase tolerance for our differences, "subtle, less visible and more insidious forms" ("Discrimination at work" 2003) of discrimination have surfaced. Although instances of blatant acts of discrimination still occurring, the more discreet forms of discrimination make it all the more difficult to detect, substantiate, remedy and eliminate. Introduction As the world 'shrinks' with the ever increasing mobility of people, more and more frequently we find ourselves encountering people with rich, diverse cultures and backgrounds unfamiliar to us. It is the responsibility of each of us, personally and collectively as a country, to ensure that every person is afforded the same opportunities and rights we all enjoy. In this paper, the issue of racial and ethnic discrimination will be explored as well as the additional challenges faced by immigrant minorities. All too often racial and ethnic discrimination occurs in the workplace. Through stereotyping people based on race or culture frequently immigrant minorities face, in addition to becoming acclimated to a new culture and environment, the additional challenge of a distinct disadvantage in the labour market sector. Often unable to find sustainable employment, many immigrants find themselves being led towards jobs that tend to be low paying positions, often with minimal benefits. Additionally, employment of this type tends to be unstable and insecure as union organisation is rarely found in this sector. This further places burden on those employed. Also, within the ethnic and racial immigrant minorities there are further levels of disparity which will be examined and discussed. However, before analysing the empirical evidence, an examination of the theoretical issues surrounding this disparity will be addressed. Economic Theory Before beginning to discuss discrimination in the work place, it is important to understand what it is and what it entails. First, however, it needs to be defined. Economist Kenneth Arrow defines labour market discrimination as "the valuation in the market place of personal characteristics of the worker that are unrelated to productivity" ("Discrimination in labour" 2005). In other words, labour market discrimination is the importance we place on physical appearance, ethnicity, and a host of other attributes that have no bearing on the individual's ability to perform the specific job and how that influences hiring practices and treatment of employees in the workforce. There are a variety of theories as to why discrimination in the labour market exists. One of the most interesting comes from economist Gary Becker who in his book Accounting for Tastes offered a unique theory that combines economics with the social science to arrive at his hypothesis. According to Becker people arrive at preconceived ideas based on an internal mechanism that causes them to place value on people, not based on their actions or abilities, but rather on how they are perceived to be. Outward appearance and personal taste on how some feel other groups of people are or should be sets the course for discrimination. Based on the value they place on certain physical traits or attributes, their 'tastes' cause them to avoid or want to avoid contact with those they consider of less 'value', often those of different ethnic or racial background. So as not to devalue themselves this avoidance tends to make them only wish to associate with people of the same 'value' as themselves and they do whatever they deem necessary to avoid this contact. As an example, while dining in a restaurant they want the waiter of identical race to serve them, or when purchasing something in a store prefer the clerk that assists them to be the same 'value' as they are. (1998) Although somewhat unorthodox, Becker does have a unique perspective on stereotyping and discrimination. It is not always overt or even intentional but these preconceived notions or 'values' place importance on our perceptions of how a group of people are in general instead of considering each individual for their own merit. When this thinking and rationale, whether done consciously or not, spills into the workplace, it becomes discrimination. Although this is but one theory as to why discrimination occurs, it does offer a perspective that discrimination is not always a premeditated choice among employers; rather it offers us the possibility of understanding the complexity of human nature. This leads to the understanding that although we can enact laws regarding discrimination, it will never fully be removed from society until the value we place on others possessing appearance, ethnicity and cultural backgrounds divergent from ours are not valued less based on our preconceived notions and belief systems. Another area that leads to labour market disparity is "employer ignorance" ("Discrimination in labour" 2005). This theory surmises that in the busy work sector, supervisors and others in authority over others do not always have time to actually observe each worker's performance. Further, they do not fully understand and appreciate their workers abilities and various levels of productivity. In an attempt to compensate for their actual knowledge of each employees contribution to the workplace, employers tend to generalize and group employees together based on preconceived notions on how they feel certain groups of people behave and act. These assumptions are based on easily apparent outward characteristics. This generalisation leads to assumptions that certain groups of employees are less productive which makes them not want to employ people within these groups. It may even cause them to not base salary on ability necessarily as they tend to classify people as groups and not base promotions or pay increases on merit, experience and ability. Another form of labour market disparity takes the form of what has been classified as the occupational crowding effect. All things tend to want to come to some form of equilibrium. This is true in the labour market at well. If certain job sectors are very over crowded and other sectors are in high demand for employees, the natural tendency would be that workers in the overcrowded sectors would gravitate to those occupations with openings. However the crowding effect comes into play. Certain minorities may be categorised in certain ways based on societal perceptions and channelled into certain work sectors based on these generalised preconceived notions. Even this labour sector becomes overcrowded as they are cannot freely move between various sectors because of these barriers placed in their paths. This is, in effect, another example of discrimination. Having discussed some of the theories as to why discrimination occurs within the labour market, examining specific data concerning the disparity amongst different ethnic minorities will offer a better understanding of the disparity that actually exists and the possible causes for it. Although primarily we have focused on discrimination, that is but a part of a larger problem. Ethnic and racial diverse immigrants often face multiple barriers in the labour market and through analysis of the empirical evidence presented; we will examine the extent of this disparity found in the UK today. Presentation of Data There has been a great deal of research done in the area of racial disparity. Once consider mainly a black/white issue, through years of research and data gathering it has been shown that the problems are much more complex than such a simple description once implied. There is an ever widening gap in the opportunities afforded to ethnic minorities within the UK. This is further complicated by the fact that within the various ethnic immigration populations itself, there is further disparity as well. Before examining empirical data specific to various ethnic groups, some general facts and figures will introduce us to the severity of the problem. "Research has shown, for many years now that compared to white's ethnic minority people occupy a less favourable position in the labour market" (Barnes, Hudson, Parry, Sahin-Dikmen, Taylor & Wilkinson 2005, p.8). In general, Barnes et al found that within the various ethnic groups there was a great amount of disparity. "Overall, Chinese and African Asians seem to have achieved parity with their white counterparts, while Pakistani and Bangladeshi women remain the most disadvantaged. Indians and Black Caribbean, meanwhile, appear to occupy a middle ground with the former being closer to the top end of the scale" (2005, pp. 8-9). In general research has shown that ethnic minorities are two times as likely to be unemployed as their white counterparts. Further, through examining statistical data this trend as been unchanged in the last 20 years. According to Barnes et al. in 1999 alone, the unemployment rate for white males was 6% while for male ethnic minorities the rate was 13%. The statistics were even worse for the female ethnic minorities. The white female unemployment rate that same year was 5% while females who were ethnic minorities had an unemployment rate of 13% as well. Other general information uncovered in this study showed: "Pakistanis, Bangladeshis and Black Africans are over three times more likely to be unemployed than whites. Black Caribbean are around twice as likely. Indians and other Asians are slightly more successful, but are still around one and a half times more likely to be unemployed than whites. Among women, at around 24 per cent, Pakistani and Bangladeshi women had the highest unemployment rate" (2005, p. 9). Further research compiled by the Centre for Research Equality has shown the actual extent of the disparity amongst the ethnic immigrant population within the UK. Not only are unemployment rates greater for this group in general, but of those employed their standard of living is much lower than their white counterparts due to lower paying employment. Further, they generally hold jobs in the lower levels of the work force limiting their chances of upward progression within their occupational fields. Having briefly summarised the overall situation, examination of specific data will illustrate the points mentioned. Table 1 below lists the employment rates during 2002. As evidenced by Table 1, several trends become apparent. Across all age groups, ethnic minorities have lower employment rates than their white contemporaries. In particular, Pakistani and Bangladeshi people regardless of age have the lowest percentage of employment and the disparity is great even amongst other minority groups. The one exception is the 16-24 year group where the employment rate is 38%. In this category only Black or Black British have a lower employment rate of 35%. Further, the age group 16-24 years have the lowest employment rates across all races. Table 1: Employment rates 2002 ("Statistics" 2003) Table 1: Employment rates by ethnic origin and age, Great Britain, Summer 2002 (%) 16-24 25-44 45-59/64 All ages All ethnic groups 64 81 73 75 White 67 83 74 77 Total mixed 49 67 57 60 Asian or Asian British 42 69 55 59 Indian 51 80 66 70 Pakistani/Bangladeshi 38 54 30 45 Black or Black British 35 69 63 60 Chinese 41 76 72 67 Other 35 58 72 57 Source: Labour Force Survey Note: Base is the working age population In Addition to the above chart, I have included as Figure 2 at the back of this paper a breakdown of employment rates by region within Great Britain. Although it will not be discussed in depth during here, the information is interesting to peruse. Major findings from Table 2 reveal that to a large extent the gap of disparity between ethnic groups and white is lessened in more prosperous areas where the difference is approximately 10%. In areas where that are less prosperous the disparity increases up to 20%. This difference can be accounted for due to employment type and educational attainment. As expressed in the above chart ethnic groups suffer higher unemployment than do whites. During the year 2002, a Labour Force Survey presented to the Centre for Racial Equality stated that the unemployment rate for ethnic minorities was 8% during that year while the white population saw an unemployment rate of only 4%. Interesting the survey found that the highest rate of unemployment was found in the mixed ethnicity group, at 12%. "Unemployment rates for the Black Caribbean and Black African population were 10 and 11%, respectively. For the overall Asian population it was 5%, but for the Pakistani group it was 8% and for the Bangladeshi group, 11%" ("Statistics 2003). For white males the unemployment rate was 4% and for white women the rate was 3% while "Black Caribbean and Black African women, unemployment rates stood at 8% and 9% respectively. 6% each of Indian and Bangladeshi women and 7% of Pakistani women were unemployed" ("Statistics" 2003). Results further reflected that although in 1992 ethnic minorities were unemployed 15 - 20% more frequently than whites, the unemployment levels have decreased somewhat but a great disparity still exists. There have been some improvements in the disparity however. Statistics report that there has been a slight increase of ethnic minority groups holding professional positions, particularly in the Chinese and Indian groups. Generally, the disparity between ethnic groups and whites is quite large. For example, of the male population of Bangladesh in the UK, 52% work in the food service sector while only 1% of white males are employed similarly. Also for every eight taxi cab drivers or chauffeurs one will be a Pakistani male while on a national average only one white male in a hundred is. ("Statistics" 2003). The consequence of high unemployment and poorer paying jobs leads to lower income levels. Ethnic minority groups because of the above factors generally account for some the lower income families. Table 3 below depicts this rather pointedly. As evidenced in the table ethnic minorities have a far greater likelihood of earning below the 40% the national average. As seen in the table Pakistani and Bangladeshi people are four times more likely to fall into this category than their counterparts earning 45 and 52% less than whites. The one exception to this disparity is found when examining the Indian population in the UK. The Indian male population is about on the overall national average. ("Statistics" 2003). Ritchie, Casbourne and Rick in 2005 prepared a paper for the Department of Work and Pensions and collected data further exemplifying the ethnic disparity. Their research found that the rates of self employment among ethnic minorities are only half of that of the white population. Also, almost of this population has at least one house hold member with a long term illness with limits their employment options (p.13). Lastly, the research revealed that "differences between first and subsequent generations, between men and women, and between geographical locations for different minority ethnic groups" (Ritchie, Casbourne & Rick 2005, p. 16). Reasons for Disparity Having demonstrated the severity of the disparity in the labour market between immigrant ethnic minority groups and the white population, root causes of this disparity needs to be examined if this gap is to be bridged. Unfortunately, there are multiple barriers that minority groups face which makes achieving a balance more difficult. However, it is possible to eliminate this disparity. Several major areas have been identified as root causes for the disparity in the labour market. The first cause has been termed "human capital" which is "the sum of skill, knowledge, experience and educational qualifications a person possesses" ("Statistics" 2003). This is, as can be seen by its very definition, one of the most critical areas which determine employment success. In general, females are slightly higher in attainment than males within the general category of ethnic minority while, in particular, children of Pakistani, Bangladeshi and Black Caribbean decent, regardless of gender, tend to fair poorly. Lack of education, training and apprentice program opportunities hinder the ability to break the cycle of poverty. Although strides have been made to increase inclusion there still remains resistance. These barriers need to be removed to end the cyclic nature of this problem. Another area discovered that aids in the disparity is the geographic location of ethnic groups and relates to spatial division. In general, research has found that ethnic minority groups reside in more economically deprived areas. In such cases, employment opportunities are reduced and jobs located in these areas tend to be low paying positions. Transportation becomes an issue as well. Lacking transportation, it becomes difficult to afford commuting greater distances to work. Also, being associated with certain geographic locations 'known' to be poorer areas can deprive minorities of obtaining higher paying jobs. According to the findings of the Centre for Research Equality 70% of all ethnic minorities live in the top 88 districts shown to be the most deprived. ("Statistics" 2003). Also it has been determined that health factors play a factor in the long term employment options of people. Certain ethnic groups, particularly Pakistani and Bangladeshi groups have far greater health issues than does the rest of the population. Child care also impacts the opportunity for employment. Results of a nationwide study revealed that there were 12-14 childcare places for every 100 children, in severely deprived areas, where most of the ethnic minority population resides, only 6-8 places per 100 children were available. ("Statistics" 2003). Through examining these various barriers to moving to equality, the sum total of them still does not account for the disparity still present. The other factor which we have discussed previously is that of labour discrimination which still accounts for much of the inequality. Educating the public is imperative if we are to move to inclusion. Laws are there to enforce equality but people have to make it happen. Implications As has been shown in the literature and data research, the economy in the UK is on the rise. Unemployment is down in general. However, even though economic trends have improved since the latter part of the 20th century, the ethnic immigrant population has not seen a significant improvement in employment or economic improvement. The government has recognised this problem and in the year 2003 and the Social Exclusion Unit began to focus more on this specific issue. Some of these include extensive job training opportunites for adult learners, increasing funding for employer provided day care, increased minimum wage in 2004 and stringent enforcement of work place discrimination. An abundance of literature has been produced and made available to the public as well concerning the social inclusion of all people within the UK. However, there is still much that needs to be done. Jobs need to be created within the geographic areas where the vast proportions of ethnic minorities reside. This revitalisation will go far in solving some of the disparity. Foremost, we all need to realise it is not someone else's problem. It belongs to us all. Conclusions Throughout this paper we have identified the barriers that lead to an overwhelming disparity within the minority immigrant population with regard to the labour market sector. We have examined root causes including education and training deficits, spatial divides, discrimination, health and other social and cultural barriers. Unfortunately there are frequently multiple barriers present which make achieving parity even more challenging. However, identification of the problems is, in fact, a step towards finding the solutions to eliminate these divides. It will take more than laws however to achieve true equality. The solution lies within us collectively as group. Social inclusion is not just a government policy. Laws can be made and enforced, but it requires more than that; an understanding and acceptance is required from each member of the community. References Barnes, H., Hudson, M., Parry, J., Sahin-Dikmen, M., Taylor, R. & Wilkinson, D. (2005). "Ethnic minority outreach: an evaluation." Department of Work and Pensions, Research Report No. 229. Leeds: Corporate Document Services. Becker, G, (1998). Accounting for Tastes (Reprint). Cambridge: Harvard University Press. "Bridging communities." (2003). Citizens Advice Bureau. Home Office London, UK. "Discrimination at work 'common'." (12 May 2003). BBC News/Europe. Accessed 16 Jan. 2006, from http://news.bbc.co.uk/1/low/world/europe/3019505.stm "Discrimination in the labour market." (2005). Tutor2u Website. Accessed 16 Jan. 2006, from http://www.tutor2u.net/economics/content/topics/labourmarket/labour_discrimination.ht m Green, H., Connolly, H., & Farmer, C. (2004). "2003 home office citizenship survey: people families and communities." Home Office Research. Study No. 289. Crown Publishing. Ritchie, H. Casebourne, J. & Rick, J. (2005). "Understanding workless people and communities a literature review." Department for Work and Pensions. Research Report No. 255. Leeds: Corporate Document Services. "Statistics: labour market." (2003). Commission for Racial Equality. Accessed 16 Jan. 2006, from http://www.cre.gov.uk/research/statistics_labour.html Appendix A Table 2: Employment/Economic Activity by Region ("Statistics" 2003) Table 2: Economic activity status of the working age population, by ethnic group and region, Great Britain, Summer 2002 In employment (%) ILO unemployed (%) Inactive (%) Non-employed (%) Working age population (thousands) Region White Ethnic Minority White Ethnic Minority White Ethnic Minority White Ethnic Minority White Ethnic Minority South East 81 71 3 7 16 22 19 29 4,799 208 South West 80 69 3 6 17 25 20 31 2,939 67 Eastern 80 68 3 5 17 27 20 32 3,221 164 East Midlands 78 63 4 5 18 32 22 37 2,457 155 Wales 71 59 4 5 25 36 29 41 1,726 41 London 76 59 4 9 20 32 24 41 3,429 1,461 Scotland 74 57 5 9 20 34 26 43 3,108 62 West Midlands 77 55 4 10 19 35 23 45 2,891 351 Yorkshire & Humber 76 55 4 8 20 37 24 45 2,899 214 North West 73 50 4 9 22 42 27 50 4,024 200 North East 70 49 5 3 25 49 30 51 1,541 33 Great Britain 77 59 4 8 19 33 23 41 33,034 2,956 Source: Labour Force Survey Notes: ILO unemployed is the International Labour Organisation definition of unemployment. 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