The Government has recently launched its industrial strategy. A bold vision for a Britain ready to embrace the challenge of unprecedented technological change and support new industries that bridge the digital, biological and physical worlds. Admirable as this vision is, it is one that looks increasingly alien to many in Britain’s ethnic minority communities. Investing in the future is welcome but many ethnic minority individuals work in sectors that are already in existence and are largely bypassed by the winds of innovation and digital advancement. Sectors such as retail and hospitality, which are characterised by low pay, limited progression and poor productivity. If the Government is serious about putting equality and diversity at the heart of its industrial strategy, it is these areas it must tackle.

Wages and Skills

Ethnic minority individuals make up a disproportionate number of the low paid. This is primarily due to their overrepresentation in low wage occupations such as sales, catering and textiles. These sectors suffer from low levels of productivity with the IPPR finding that a third of the productivity gap between the UK and other EU nations is as result of these industries. Strong productivity growth underpins good wages. With weak productivity growth, real wages have risen slowly in these sectors, contributing to the high levels of in-work poverty that minority communities suffer.

To tackle this, the Government must have a strong focus on skills. As the Rowntree Foundation explains, minority ethnic workers need an opportunity to progress out of low paid employment through vocational and functional skills training. One area of particular need is ‘English as a Second Language’ (ESOL) provision. Under the Coalition Government funding was cut by 50% between 2008 and 2015 with damaging results. The Casey Review points to the failure of ESOL provision in preventing ethnic minority workers, particularly women from fully accessing the labour market. Efforts to invest in ESOL have been met with minimal results with Dame Louise Casey herself expressing anger at “absolutely nothing” being done about the recommendations of her report. Even recently, the Government’s own industrial strategy White Paper is silent on the issue of ESOL.

Apprenticeships

Extending ESOL provision on its own won’t empower BAME communities in the labour market. Equally important is technical and vocational training, to ‘up-skill’ the ethnic minority workforce. The Government has made a step in the right direction with an ambitious target of increasing BAME apprenticeship take-up by 20% by 2020. However, as the recent Racial Disparity Audit highlighted, minority ethnic young people continue to struggle to apply successfully for and begin apprenticeships. Although apprenticeship starts have tripled between 2002 and 2016, white people were disproportionately more likely to work as apprentices. More worryingly, ethnic minority applicants are applying in high numbers but this is not corresponding to the equivalent levels of apprenticeship starts – in 2015/16 28% of apprenticeship applicants were ethnic minority yet they made up only 10% of apprenticeship starts. With ethnic minority young people twice as likely to be unemployed as their white counterparts, it’s essential that these numbers are increased.


Capegmini is one company leading the way in this area. The French multinational consulting company pursued a ‘three-pronged’ approach to attract a more diverse apprentice workforce. Firstly, targeting a greater range of universities, particularly post-1992 universities that have a more multicultural student body. Secondly, running an unconscious bias and inclusion training for recruiters and hiring managers, to ensure that implicit bias against minority ethnic applicants is minimised. Finally, making ethnic minority role models more visible to applicants, for instance choosing a female, ethnic minority apprentice to be interviewed on Radio 4’s Woman’s Hour. These measures have had great success with the company increasing its proportion of minority ethnic apprentices by 7% between 2015 and 2016.

Business Responsibility

A key part of empowering ethnic minority employees in the workplace is about progression. It is not enough for the Government’s industrial strategy to simply create jobs. Minority ethnic workers need to be supported in progressing out of low-paid, routine occupations into higher and managerial positions. This will not just benefit the individual employee but the economy as a whole. The McGregor-Smith Review estimates the economy would gain £24 billion a year if BME workers progressed as fast their white counterparts and fully participated in the labour market.

In April of this year, large firms will be required to publish their gender pay gap statistics. The Government should extend this provision by requiring larger firms to publish their BAME pay gap. The publishing of pay gap data on its own is not a ‘silver bullet’ but it can shine a spotlight on an organization, forcing it to take action. Accounting giant PricewaterhouseCoopers (PwC) has begun publishing its pay and bonus gap data for BAME staff and as Chairman Kevin Ellis explains, “it adds a level of accountability that starts conversations and drivers change”. As a result of the publication, PwC has developed a new strategy to retain and increase the progression rates of BME staff. Other firms should take note and follow PwC’s lead.

Supporting Cities

In order to create an industrial strategy that works for minority communities, a strong focus on ‘place’ is needed. Ethnic minority communities are overwhelmingly concentrated in urban centres with 50% of the entire minority population living in just three cities – London, Birmingham and Manchester. Cities are therefore key to tackling the disproportionate unemployment and in-work poverty of BAME workers.

New Metro Mayors have been introduced in Manchester, Liverpool and the West Midlands. This offers an exciting opportunity to develop policy initiatives that specifically target ethnic minority communities, away from the shackles of central government. New devolved decision-making powers allow Metro Mayors to improve access to further education (FE) and adult skills training, which are essential to ‘up-skilling’ ethnic minority workers. Additionally, Metro Mayors play an important role in fostering a culture of ‘inclusive growth’ in British cities. As the Rowntree foundation explains, a cities’ success has in the past, been measured too heavily by factors like overall economic growth and employment rates, with less attention paid to the quality of employment and wage levels. As ethnic minority workers are far more likely to be employed in lower wage and less skilled occupations, a focus on this wider definition of success will bring substantial benefit.


Economic growth in many northern, post-industrial cities has also fallen behind national trends. The Rowntree Foundation found in its ranking of the UK’s ‘struggling cities’ that 10 of the 12 were located in the north of England and many of these had an ethnic minority population substantially higher than the national average. Rochdale and Blackburn ranked first and fourth in the ranking have a BAME population of 20% and 30% respectively, compared to the national average of 12%. The UK has one of the highest levels of regional disparity in the OECD and therefore a firm focus on tackling productivity and improving the labour market in areas outside the Southeast is desperately needed.

Conclusion

The Government has pledged to put equality and diversity at the heart of its industrial strategy. However, warm words are not enough. To overcome the unique set of barriers that face ethnic minority employees in the workforce, a proactive and persistent strategy is needed. Tackling the cycle of low wages and in-work poverty must be the Government’s first priority. The low productivity of our hospitality, retail and clothing sectors needs to be addressed through skills training and employing technological advances. The ethnic minority workforce must then be ‘up-skilled’ through providing essential ESOL provision and boosting apprenticeship take-up. Firms have a responsibility to target BAME applicants and to ensure that measures are in place to mentor and progress talented ethnic minority staff. This is set against a backdrop of tackling regional inequality. Utilising the power of new Metro Mayors and reversing the economic decline of our northern post-industrial cities would prove substantial in improving the employment prospects of their disproportionately ethnic minority populations. There is no easy fix for these issues but with the right policies, significant progress in advancing racial equality in the workforce can be achieved.