Compulsory ethnic pay gap reporting is “first rate virtue-signalling”, says IEA expert


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Responding to calls for mandatory ethnic pay gap reporting, Professor Len Shackleton, Editorial and Research Fellow at free market think tank the Institute of Economic Affairs, said:

“This is first rate virtue-signalling.

“It could impose substantial monitoring costs on businesses and other organisations, increase ill-feeling among workforces, and end up offering very little guidance to employers. It might even be counter-productive.

“Inevitably people would be lumped together under broad categories such as ‘Black’, ‘Asian’ or the even worse ‘BAME’, to make some sort of comparison possible. But we know that with differing make-ups of these groups you can tell any story you want.

“For example, an ‘Asian’ group consisting mostly of those of Indian heritage could have a pay gap in their favour, not as a result of their employer’s policies but rather the types of roles they occupy. Similarly, apparently ‘bad’ pay gaps may exist despite an employer’s best efforts.

“Publication could lead to firms trying to manipulate these indicators by, for instance, outsourcing low-paid jobs, which would likely worsen the position of low-paid minorities.

“We could even end up with a situation where pay gaps within firms were reduced, but economy-wide pay gaps increased. The Commission on Race and Ethnic Disparities was quite right to advise against requiring businesses to publish ethnic pay gaps, and the government should listen to them rather than to those noisily pushing for compulsion.”

ENDS

Notes to editors

Contact: Emily Carver, Head of Media, 07715942731

IEA spokespeople are available for interview or further comment.



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