Discrimination in the Labour Market (AQA A Level Economics)

• Wage discrimination occurs when there is a difference in wages between workers with comparable skills in the same job

 

Conditions Necessary for Wage Discrimination

Condition	Explanation
Bias	Discriminatory attitudes towards particular groups, such as gender or ethnic minorities, can lead to wage discrimination   Women and men may not receive equal pay for the same work based on gender
Information asymmetry	This occurs when employers have more information about labour productivity, skills or qualifications than employees   Employers may exploit the lack of transparency to justify paying lower wages to certain individuals
Regulation	When government agencies fail to enforce legislation or regulate, employers may feel they can engage in discriminatory practices without fear of repercussions

Gender Discrimination

• The gender pay gap is a form of discrimination that occurs when a women is paid less than a man who is doing exactly the same job
• The gender pay gap for full-time employees in 2023 was 7.7%. This is due to the following:
  • Women are concentrated in lower-paying occupations. They make up 77% of workers in health and social work
  • Fewer women are in senior and leadership positions
    • In 2022, only 1 in 25 of CEOs in Britain's largest publicly listed companies are women

  • Career progression can be interrupted by maternity leave and family responsibilities

Ethnicity Discrimination 

• Ethnic pay gaps show the difference in the average pay between workers from minority ethnic backgrounds in a workforce, compared to white workers 
  • Ethnic minorities in the UK face both wage and employment disparities 

• Minority groups are more likely to work in lower paid sectors such as hospitality and retail. These sectors also tend to offer fewer opportunities for career advancement
  • E.g In 2023, UK-born black employees had a pay gap of 5.6% less than white employees
    • Non-UK-born black employees has the highest pay gap, earning 12% less than UK-born white workers

• Ethnic minorities are also underrepresented in leadership positions within businesses
  • E.g Only 4.6% of UK leadership roles are held by minority ethnic groups