Black, Asian and minority ethnic (BAME) people are much more likely than white people to work in hospitality, one of the sectors hardest hit by the economic fallout of the pandemic as restaurants, bars and other venues have been shut for months during the lockdowns.
About one in 12 (8%) workers from BAME backgrounds are employed in hospitality roles. That compares with about one in 20 (5%) white British workers, research from the Resolution Foundation shows. Overall, 300,000 people from BAME backgrounds work in hospitality.
The thinktank’s report found that even before the pandemic hit, hospitality was one of the lowest paying sectors in the economy, with a typical hourly pay of £8.72. It said that 23% of hospitality workers were paid at or below the national living wage.
The research found that BAME workers in the sector also faced “pay penalties” – pay gaps that account for workers’ age, qualifications, experience, and the kinds of jobs they do – relative to white British workers. “Crucially, these pay penalties are bigger than the raw pay gaps found in official earnings data – suggesting that the extent of disadvantage is bigger than previously thought,” the report said.
BAME men were paid 65p an hour less than white British men on average, the report found. BAME women were also underpaid compared with white British women but the gap was less severe.
The report found that while hospitality as a whole disproportionately employed young people – over a third of its workforce were aged 16-24 – this was not always the case for BAME workers. For example, the typical age of a Bangladeshi worker in hospitality was 42 – higher than the typical age for Bangladeshi workers across the whole economy (35), and higher than white British workers in hospitality (28).
Indian workers in hospitality were among the highest paid ethnic group per hour (£8.96) and among the most likely to be in high-paying occupations (28%) such as hotel and restaurant managers. This corresponds with 41% of Indian hospitality workers holding a degree.
In comparison, one in four Bangladeshi hospitality workers had no qualifications and typically earned 12% less than Indian hospitality workers, at £7.85 an hour.
Nye Cominetti, the senior economist at the Resolution Foundation, said: “As workers from BAME backgrounds are disproportionately likely to work in hospitality, a significant number of workers risk moving into unemployment when the furlough scheme ends in the spring.
“The government should bear that in mind for the jobs support programmes it is providing.”
A report by the British Beer & Pubs Association and the consultancy Oxford Economics has previously warned that 291,000 jobs in the hospitality trade could be lost as a result of coronavirus restrictions.
The forecast was based on industry data suggesting that 25% of pubs could close, with the remainder barely breaking even as they struggle to cope with reduced custom and limited opening hours.
Oxford Economics said the worst-case scenario would reduce the sector’s economic output by £7.4bn and cut wages by £3.9bn.