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Joe Biden in the White House: which world leaders stand to lose out?

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The president of the US does a lot to set the tone of global politics. The themes and language used by the occupant of the Oval Office are usually swiftly picked up by politicians all over the globe. Most nations want friendly relations with the world’s most powerful country. 

Even a president as unorthodox as Donald Trump has gathered acolytes and emulators outside America. Mr Trump’s favourite phrases — such as “fake news” — were picked up by leaders as diverse as Brazil’s Jair Bolsonaro and Israel’s Benjamin Netanyahu. The fashion for denouncing “liberal elites” has also gone global in the Trump years — including by supporters of Narendra Modi, the Indian prime minister, and by Britain’s Brexiters.

But while rightwing populists will be scrambling to adapt to a Joe Biden presidency, more liberal leaders will be relieved by the change of leadership in America. Angela Merkel of Germany and Justin Trudeau of Canada had difficult relationships with Mr Trump. Many European leaders were worried that a second Trump administration could see the US withdraw from Nato and attempt to undermine the EU. There will be delight in Brussels and Berlin that Mr Trump is on his way out.

The attitude of Asian democracies may be more equivocal. Mr Trump has proved to be a fickle and sometimes abusive ally. But the governments of Japan, Australia and Taiwan have appreciated his tougher line on China. They may be apprehensive about what happens under a Biden administration.

THE LOSERS:


Benjamin Netanyahu

Israel

Israel’s prime minister enjoyed close relations with Donald Trump and his son-in-law and senior adviser, Jared Kushner. In last year’s parliamentary elections, Benjamin Netanyahu campaigned on his close ties with the US president.

Washington made decisions regarded as beneficial to Israel, including recognising Jerusalem as Israel’s capital and Israeli sovereignty over the Golan Heights. Its Middle East peace plan was rejected by the Palestinians.

On Sunday Mr Netanyahu congratulated Joe Biden, a supporter of close Israel-US relations, underlining his “long and warm personal relationship” with the president-elect. However, Mr Biden is expected to take a more even-handed approach than his predecessor.

Mohammed bin Salman

Saudi Arabia

The Saudi crown prince has cemented his grip on power during Donald Trump’s presidency. As he purged rivals at home, Prince Mohammed’s direct line to the Trump family damped pushback against his regional adventurism, from the war in Yemen to the embargo of US ally Qatar.

Saudi Arabia, which cheered when Mr Trump tore up the Iran nuclear deal, now fears the revival of its arch-rival Tehran if the president-elect rejoins the accord.

Joe Biden has also vowed the 2018 murder of Saudi dissident journalist Jamal Khashoggi would not be “in vain”, pledging to reassess relations with the kingdom, to end support for the Yemen war and make sure “America does not check its values at the door to sell arms or buy oil”. 

Recep Tayyip Erdogan

Turkey

The Turkish president and Donald Trump enjoy a natural rapport and a shared taste for transactional politics. The US president shielded Turkey from facing financial sanctions for purchasing an air defence system from Russia. He also intervened in a criminal investigation against the Turkish state-owned lender Halkbank at Recep Tayyip Erdogan’s request.

Mr Biden — who has previously described Mr Erdogan as an “autocrat”— will need to balance a desire to take a stand against Turkish policies he considers wrong with the need to avoid alienating a strategically important Nato member that borders Syria, Iraq and Iran. But analysts say that, unlike Mr Trump, he will be unlikely to do personal favours for the Turkish president.

Viktor Orban

Hungary

The Hungarian prime minister, who has consolidated control over the country’s institutions during his decade in power, was the first European leader to endorse Trump in 2016. While the race was under way, Viktor Orban lambasted what he said was the “moral imperialism” of Democrats.

“Since Trump became president, Hungarian-American relations are better than ever,” Mr Orban said in his Friday radio address.

Peter Szijjarto, Mr Orban’s foreign minister, attacked Mr Biden at the end of October after the former vice-president critiqued Poland and Hungary as being part of “a rise in totalitarian regimes in the world”. Mr Orban had clashed fiercely with Barack Obama, who Mr Biden served as vice-president. 

Boris Johnson

UK

Whether on Brexit, race or trade, the UK prime minister has found himself on the wrong side of the incoming US president. Joe Biden warned Mr Johnson during the campaign not to undermine the Good Friday Agreement — a core part of the president-elect’s Irish identity — while his aides have not forgiven the prime minister’s unfortunate reference to Barack Obama’s “part-Kenyan” heritage.

Mr Biden regards the UK’s departure from the EU as a historic error and will be in no rush to push through a free-trade deal with Brexit Britain. While policy means the two countries are bound together, it is difficult to imagine the transatlantic bonding that typically forms between the UK and the US.

Jair Bolsonaro

Brazil

The Brazilian president is one of Donald Trump’s closest political and ideological allies. In the two years since his election, Mr Bolsonaro has followed the US lead on foreign policy issues from climate change to relations with China and Venezuela — a big change for a country which has historically prided itself on a more neutral, nonaligned foreign policy.

As the outcome of the US election began to emerge last week, Mr Bolsonaro started hedging his rhetoric, telling supporters that “Trump is not the most important person in the world.” The change in tone reflects a stark reality facing Mr Bolsonaro under a Biden presidency: Brazil will need to overhaul its foreign policy or face isolation.

Vladimir Putin

Russia

The Russian president, accused of meddling in the 2016 election to help elect Donald Trump, has so far declined to recognise Joe Biden’s victory, while Kremlin-controlled media and senior Russian officials have regurgitated his rival’s claims of a “stolen election”.

Moscow has reason to feel glum: while Mr Trump has praised Mr Putin’s leadership, Mr Biden has vowed to step up pressure on the Kremlin as part of a pledge to target autocracies and promote human rights under his incoming administration’s foreign policy. Beefed-up sanctions, renewed backing of Nato and stronger support for Ukraine are all likely.

Kim Jong Un

North Korea

Donald Trump’s defeat draws to a close a volatile chapter of US-North Korea relations, characterised by dangerous weapons tests and unusual American overtures to Mr Kim. Joe Biden has signalled an end to the theatrical summitry favoured by his predecessor, who met the North Korean dictator three times.

The Biden administration’s deprioritisation of North Korea will deliver a blow to Mr Kim, whose legitimacy on the world stage was bolstered by his personal dealings with Mr Trump. But cooling ties risks sparking military provocations by Pyongyang as it seeks to resume talks over crippling sanctions. 

Narendra Modi

India

The good rapport between the Indian and US leaders was on display in a joint mass rally last year in Houston — where Mr Modi appeared to endorse Donald Trump’s re-election — and in Ahmedabad.

Strategic ties have deepened, as Washington offered New Delhi more advanced military equipment and sided with India in the Himalayan border stand-off with China. Mr Trump turned a blind eye on policies seen as eroding India’s secular foundations, marginalising Muslims and cracking down on dissent.

The relationship could grow more fractious as Joe Biden has pledged a values-based foreign policy, which could put the spotlight on India’s record on human rights and religious freedoms. However, Indian officials note the bilateral relationship has steadily improved as the US looks to India to counter China. 

Andrés Manuel López Obrador

Mexico

The leftist populist Mexican president and Donald Trump co-operated on Washington’s tough immigration policies — many of which Joe Biden plans to reverse. Because of Mexico’s economic dependence on the US and their long common border, Mr López Obrador has the most to lose from a poor relationship with his new neighbour.

The Mexican leader refused to congratulate Mr Biden until Mr Trump’s legal challenges were resolved. Joaquín Castro, a Democratic congressman from Texas who is chair of the Hispanic caucus, called the decision to hold off congratulations “a stunning diplomatic failure”. Mexico can expect more pressure on labour relations, the environment, human rights and anti-corruption, said Verónica Ortiz, head of Comexi, a foreign affairs think-tank.

THE WINNERS:


Hassan Rouhani

Iran

The Iranian president — who gambled on the 2015 nuclear agreement as his signature achievement — suffered a huge blow after Donald Trump pulled the US out of the deal in 2018 and reimposed crippling sanctions.

Before he steps down next summer, Mr Rouhani hopes Joe Biden will return to the historic deal. “Now, there is an opportunity for the next US administration . . . to return to its international commitments,” Mr Rouhani said following Mr Biden’s win. “The Islamic republic . . . considers constructive interaction with the world as its strategy.” 

His hardline opponents might hamper these efforts. They hope to win the presidential election after which they — rather than Mr Rouhani — could receive the credit.

Angela Merkel

Germany

Germany is one of the countries that stands to gain the most from a Biden presidency. Under Donald Trump, relations between the two countries dropped to historic lows. He routinely castigated Berlin for its relatively low defence spending, high current account surplus and backing for the Nord Stream 2 pipeline that will bring Russian gas directly to Europe.

On the day Joe Biden won, Heiko Maas, Germany’s foreign minister, offered Washington a “new deal” — a fresh start in transatlantic relations. He said Berlin would offer the new administration “concrete proposals” on how to deal with China, climate change and the pandemic. Ms Merkel, who had a notoriously testy relationship with Mr Trump, noted she remembered “good meetings and conversations” with Mr Biden.

Justin Trudeau

Canada

The Canadian prime minister can look forward to a significant decrease in trade tensions, with the Biden administration unlikely to continue the tariff war over Canadian aluminium imports to the US. As recently as this summer, the Trump administration slapped fresh tariffs on certain kinds of Canadian aluminium, which it argued undermined US production and therefore presented a national security threat to the US.

Mr Trudeau will also welcome the Biden administration’s renewed focus on climate change and environmental protections. While investing in green energy and reducing carbon emissions have been key policies for Mr Trudeau’s Liberal party, the Trump administration withdrew from the Paris climate agreement and has not supported any multilateral efforts to combat climate change. 

Emmanuel Macron

France

The French president earned his nickname of the “Trump-whisperer” by trying harder than most western European leaders to forge a good relationship with the president. He courted Donald Trump and pointed out to his EU colleagues that most of the US president’s more outrageous decisions — such as pulling of the Paris climate accord — were fulfilling campaign promises and unlikely to be reversed.

Mr Macron came close to organising a negotiation between Mr Trump and Iran’s Hassan Rouhani. In the end, hemmed in by hardliners in Tehran, Mr Rouhani backed out. But even Mr Macron has found it impossible to overcome Mr Trump’s unpredictability. He will welcome the arrival of the more multilateral-minded Joe Biden, whom he has never met in person but who has promised to rejoin the Paris climate accord. 

Nicolás Maduro

Venezuela

Venezuela’s leftwing president looks set to outlast Mr Trump, despite vigorous US efforts over the past four years to dislodge him. Mr Maduro’s revolutionary socialist government hopes Joe Biden will ease sweeping US sanctions that have exacerbated a humanitarian crisis brought about by years of misrule.

Within hours of the US election result being declared, Mr Maduro said in a tweet that Venezuela “will always be ready for dialogue and understanding with the people and government of the United States”. However, Mr Biden has been critical of the Maduro regime and described Venezuela’s leader as a dictator. 

Former senior US officials believe Mr Biden’s administration will offer Mr Maduro some concessions to ease the humanitarian suffering exacerbated by the sanctions. They also think there will be a renewed effort to find a negotiated solution to the crisis, rather than simply trying to force Mr Maduro out by choking the economy. 

Alberto Fernández

Argentina

The country could be one of Latin America’s biggest beneficiaries, given Joe Biden’s need for diplomatic partners to promote US interests in regional stability and prosperity, especially in Venezuela. However, tensions could soon emerge if Washington fails to support a new IMF programme desperately needed to stabilise Argentina’s struggling economy.

Donald Trump’s top adviser on Latin America had boycotted the leftwing Mr Fernández’s inauguration, and Argentina had opposed the Trump administration’s nominee to lead the Inter-American Development Bank.

“A Biden victory [will] turn the page on Argentina’s complicated relationship with the Trump White House,” said Benjamin Gedan, who leads the Argentina project at the Wilson Center, a think-tank. But he warned that old tensions, including over Argentina’s close ties to China, would remain. 

WAIT AND SEE:


Xi Jinping

China

The Chinese president probably won’t have to worry about sudden US tariff increases on his country’s exports or sanctions being slapped on Chinese companies with little or no warning once Joe Biden is in the White House.

The vicissitudes of dealing with Donald Trump will soon give way to more predictable diplomatic communication between the world’s two largest economies.

But the short-term headaches Mr Trump gave Mr Xi were regarded as worth the longer-term “strategic opportunities” that China reaped over the past four years as the US withdrew from global leadership roles in areas ranging from climate change to world health. Mr Trump also did much to alienate European allies eager to work with Washington in confronting Mr Xi’s administration. In some ways Mr Trump will be missed in Beijing.

Yoshihide Suga

Japan

Japan’s new prime minister is a winner from Joe Biden’s victory. Mr Suga, who is less keen on golfing and taking selfies than Shinzo Abe, would have struggled to match the personal rapport his predecessor had established with Donald Trump.

On substance, however, it is too soon to tell whether Japan will benefit from the change in the White House. Some Trump irritants will go away, such as demands Japan pay more for US bases, but Mr Biden’s stance on core Japanese interests such as China and a US return to the Trans-Pacific Partnership trade deal is less clear.

Economically, Japanese companies rely on healthy demand from the US. The Tokyo stock market hit new highs as the US election result became clear on hopes of an American coronavirus stimulus package.

Reporting by Ilan Ben Zion in Jerusalem, Simeon Kerr in Dubai, Laura Pitel in Ankara, Valerie Hopkins in Budapest, Sebastian Payne and Michael Stott in London, Jude Webber in Mexico City, Henry Foy in Warsaw, Edward White in Seoul, Amy Kazmin in New Delhi, Najmeh Bozorgmehr in Tehran, Guy Chazan in Berlin, Victor Mallet in Paris, Tom Mitchell in Singapore, Aime Williams in Washington and Robin Harding in Tokyo

Produced by Adrienne Klasa



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Analysis

Taiwan seizes chance to host foreign reporters kicked out of China

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Taiwan is courting journalists fleeing China, spotting an opportunity to boost its visibility and build international support as concerns mount that Beijing is flirting with the idea of invading the country.

Last year, more than 20 journalists made the journey across the Taiwan Strait from China. Many had published articles critical of human rights abuses against the Uyghur Muslim minority in Xinjiang and the government’s early handling of the coronavirus outbreak in Wuhan.

They came at the invitation of the Taiwanese government, a move that has infuriated China, which claims the island as part of its territory.

Jojje Olsson, a freelance journalist living in Taipei since being denied re-entry to Beijing in 2016, said that Beijing’s reaction to critical reporting carried risks for the regime.

“China is shooting itself in the foot by expelling lots of journalists,” he said. When reporters come to Taiwan, he argued, “they are exposed to views that don’t reflect well on China”.

Steven Butler, the Asian head at the New York-based Committee to Protect Journalists, said that “Beijing is surely very unhappy about journalists moving to Taiwan”.

China, he added, was sensitive to the foreign media being in Taiwan, citing a case two years ago involving a prominent newspaper that was warned against setting up a regional headquarters in Taipei. 

Beijing said the newspaper’s offices in the Chinese capital would be forced to close if it went ahead with its expansion plans.

Michael Smith of the Australian Financial Review, who was forced to leave China in September after being questioned by state security officials, said Taiwan’s consulate officials in Sydney “made it very clear that we [journalists] were welcome”.

He declined the invitation but many others accepted.

Last year, journalists from The New York Times, The Wall Street Journal and The Washington Post arrived in Taiwan after being expelled from China, which Beijing said was a response to Washington’s blacklisting of its state media reporters.

They were joined three weeks ago by RTÉ’s Yvonne Murray and her husband John Sudworth of the BBC following threats of legal actions over his reporting on Xinjiang. 

Taiwan’s Ministry of Foreign Affairs and China’s Ministry of Foreign Affairs did not respond to requests for comment from the Financial Times.

Hong Kong had been the city of choice for journalists covering the Chinese state from afar. Western journalists booted out of China after Mao Zedong came to power in 1949 decamped to the British colony, leaving behind reporters from the Soviet bloc.

Veteran BBC correspondent John Sudworth left China late last month after facing an ‘intensifying propaganda campaign’ targeting the broadcaster and him personally © BBC

Seventy years later, Olsson said Taiwan was assuming Hong Kong’s former role. The introduction of China’s sweeping national security law on Hong Kong last year meant that the territory no longer afforded protection from Beijing. 

“There is no other place in the world that follows developments in China as closely as Taiwan,” argued Olsson, adding that finding out what the Chinese Communist party was up to was a matter of existential concern for the Taiwanese.

Taipei’s early detection of the pandemic is a case in point. Taiwanese officials were alerted to the novel coronavirus circulating in Wuhan through close monitoring of Chinese social media and introduced containment measures before any other foreign government. 

Taiwan boasts expertise in China across its government and private sector, and shares a language and timezone. But reporting from across the Taiwan Strait has its limitations. Journalists have experienced difficulties securing interviews and personal stories that present a more nuanced picture of China.

Their jobs have been additionally complicated by the absence of news assistants — China-based journalists and researchers employed by international media — who face more severe legal consequences and lack the privileges of a foreign passport.

Reporters have also been forced to operate without the support of a bureau, as media executives are wary of provoking China by opening offices in Taiwan. Deutsche Welle, the German broadcaster, was the last foreign media outlet to do so in 2018. Tokyo and Seoul are viewed as alternative east Asian headquarters, industry insiders said. 

The size of Taiwan’s economy is another factor that has given foreign outlets pause. Despite being home to some of the world’s most important technology companies, only a handful of news organisations provide consistent coverage of the Taiwanese market, which is often overlooked by foreign investors.

But China’s escalating military posturing towards Taiwan has kept the island in global headlines, as the two sides battle to dominate the international narrative around its contested status.

Beijing has used its economic and political might to entice Taipei’s few remaining diplomatic allies to switch recognition, undermining Taiwan’s sovereignty with promises of investment deals.

But by welcoming foreign journalists, the Taiwanese government has also exposed itself to critical coverage of the marginalisation of its aboriginal communities and migrant workers as well as a sluggish vaccination rollout. Journalists, after all, as one Taiwanese politician joked to the FT, “are hard to control”.



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Analysis

Defund the police: how a protest slogan triggered a policy debate

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Eleven months ago “Defund the police” was a slogan that appeared on placards at protests; now it is being debated by American city councils.

Polls show only a small portion of Americans support the idea of defunding the police, a flexible phrase that can mean redirecting funds to social services or outright elimination of the department. Yet as lawyers prepare to deliver closing arguments on Monday in the trial of the officer accused of murdering George Floyd in Minneapolis, and in the wake of yet more deaths at the hands of police, what was previously a fringe concept has become part of mainstream US political discussion.

Minneapolis has three proposals to diminish the police department’s power that supporters are attempting to place on the ballot in November. Two would replace the police department with a department of public safety, with the police as one division of it. The third would place the police department under the control of a 13-member civilian commission, with the power to hire the police chief and discipline officers for misconduct.

Austin, Texas cut its police budget in August by 35 per cent, with 5 per cent taking immediate effect. Seattle cut the police budget by 20 per cent in December. City councils have cut police budgets in nearly two dozen other cities, although mostly because the pandemic has battered municipal finances.

“People will look back at this year and say this was a real turning point,” said Alexander Weiss, a consultant who has advised police departments in Chicago and New Orleans, in reference to police accountability.

People march near the Colorado State Capitol to protest the deaths of Daunte Wright and Adam Toledo © Michael Ciaglo/Getty Images

Floyd’s death last May set off protests around the world at the disproportionate number of people of colour killed by police. A key demand for many activists was to abolish police departments entirely, or cut their funding and redirect it to social services. In Minneapolis, nine city council members stood on a stage and pledged to defund the police. When Washington, DC Mayor Muriel Bowser ordered that the words “Black Lives Matter” be painted on a city street blocks from the White House, demonstrators used the same yellow paint to add: “Defund the Police”.

With more people killed by police in the past three weeks, the demands to defund have escalated. Chicago community organiser Rey Wences told non-profit news outlet Democracy Now! that following the killing of 13-year-old Adam Toledo last month by a Chicago police officer: “What we’re asking for is the same thing we’ve been asking for years . . . Defund the police and invest in our communities.”

In 2017, state and local governments around the US spent $115bn on police — some 4 per cent of state and local direct general expenditures — according to the Urban Institute. That share has stayed constant for the past four decades, even as the rising cost of healthcare means other big-ticket items, such as elementary education, now constitute a smaller portion of municipal budgets.

Most of the money is used to pay salaries and benefits to police officers, so cutting more than 15 per cent of a department’s budget often means cutting the size of the force, Weiss said.

Police officer pay has increased as police unions have grown in power and unions are some of the defunding movement’s most dedicated opponents. After Austin City Council in August voted to cut the police budget by $150m, the Texas Municipal Police Association put up a billboard outside the city, saying, “Warning!!! Austin Police Defunded Enter at Your Own Risk”.

Critics have warned that crime will rise if police budgets are cut. The number of homicides did rise in most US cities last year. Although the reasons are unclear, that increase seems to be unrelated to police budget cuts, which in most cases had not yet taken effect.

Some Democrats have been critical too. President Joe Biden said in a meeting with civil rights leaders that talk of defunding the police was how Republicans “beat the living hell out of us across the country” in the November elections.

An Ipsos/USA Today poll released last month found that 18 per cent of Americans support defunding the police, and only 11 per cent support abolition. About 57 per cent support fully funding their own local police department, while 43 per cent support redirecting some of that money to social services.

Richard Auxier, a tax and budget expert at the Urban-Brookings Tax Policy Center, said that since police budgets were set by local governments: “there are literally thousands of them across the country, . . . and they all have their own politics”.

The politics have been particularly intense in Minneapolis. Three of the councillors who took the pledge in June backed away from it. The Minneapolis Charter Commission, a previously obscure body, killed an attempt last year by council members to place a proposal on the ballot that would replace the police department with a new public safety agency. The Minneapolis City Council launched a second attempt in January.

Activist Antonio Williams is a canvas director for the Yes 4 Minneapolis coalition, which is trying to land an initiative on the ballot that is similar to the city council’s. (A third group, Twin Cities Coalition for Justice 4 Jamar, also is pursuing a ballot initiative.) So far more than 20,000 residents have signed the Yes 4 Minneapolis petition.

A demonstrator holds Daunte Wright’s portrait during the seventh night of protests over his shooting by a police officer in Brooklyn Center, Minnesota on Saturday © Chandan Khanna/AFP/Getty Images

Williams said some of the residents he had spoken to thought the petition’s language went too far, while others thought it did too little. He sees all those conversations as a first step in the process of persuading someone to sign, then to show up at the polls in November to support the initiative.

For him and other activists, the killings of Daunte Wright by a Brooklyn Center police officer, or of Toledo in Chicago, add no urgency to their cause, because it has always been urgent. But perhaps for some, the fact that Wright’s death occurred while former police officer Derek Chauvin is being tried for Floyd’s death, when the world is watching Minneapolis, underlines “a dire need for some change”.

“It’s going to continue to happen all over the country until policing as we know it and see it is done away with,” said Williams.

Certainly Floyd’s death “galvanised” the city’s residents on the issue of police misconduct, Williams said. He doubts the signature drive could have succeeded 11 months ago. “The conversation could have been had for sure, but the next step, the commitment, the action part of it?” he said. “I don’t see it happening.”





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Analysis

UK business groups call for mandatory reporting of ethnicity pay gap

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A duty for large companies to publish the pay gap between staff of different ethnicities would be a straightforward step to tackle racial inequality in the workplace, according to UK business groups and economists who accuse the government-commissioned race report of downplaying the extent of problems in the labour market.

A storm of criticism greeted the report by the Commission on Race and Ethnic Disparities (Cred), after it concluded last month that the UK was not “rigged” against minorities and that “very few” disparities were linked to racism. But the main complaint from business groups was its failure to recommend a statutory reporting obligation of the kind in place since 2017 for gender pay disclosure.

The report said there had been a “broadly positive story” on ethnic minorities’ place in the labour market over the past 25 years, with “a gradual convergence on the white average in employment, pay and entry into the middle class”.

But Jonathan Portes, professor at King’s College London, said Cred had relied on “crude sleight of hand” in presenting statistics to back up its narrative.

Ethnic pay gaps have not improved over time in the UK, gap in mean wages (%), 9-year rolling average*

A headline gap of 2.3 per cent between the hourly median pay of all minorities and white British employees hides a much bigger gap for certain groups — with those of Bangladeshi and Pakistani ethnicity at particular disadvantage, and black men suffering a far bigger shortfall than black women.

Alan Manning, a professor at the London School of Economics, said that after adjusting the data for personal characteristics such as age, qualifications and family status, there was “no evidence for pay gaps being smaller . . . than they were 25 years ago”, and that while the ethnic penalties for some groups had improved over time, “the overriding impression is of stasis”.

These persistent pay disparities partly reflect occupational segregation, with many ethnic minorities clustered in low-paid jobs with little chance of progression. Andrea Barry, an analyst at the Joseph Rowntree Foundation, notes Bangladeshi men are three times as likely as white British men to work as chefs and waiters, while Pakistani men are more than 10 times as likely to work as taxi drivers.

But they also reflect the barriers to career progression in professional life. Ethnicity pay gaps are largest in managerial, professional and skilled occupations — and when employers examine pay differentials within their organisations, they generally find ethnic minority employees are concentrated in frontline roles, and under-represented at senior level.

The new rise in youth unemployment has been much worse for those from black and Asian backgrounds,  unemployment rate for those aged 16-24 in the UK (%)

A growing number of employers — from law and accountancy firms to local authorities and large companies such as Sainsbury and Network Rail — now report ethnicity pay gaps on a voluntary basis.

Cred endorsed this voluntary approach, arguing that there were statistical “pitfalls” in trying to impose the framework used for gender pay to report outcomes for many ethnic groups.

However, business groups have repeatedly urged the government to introduce a mandatory reporting requirement, modelled on gender pay disclosure, arguing that practical difficulties can be overcome.

Matthew Fell, CBI chief UK policy director, said pay gap disclosure was “one of the most transformative steps a company can take to address race inequality at work”.

Peter Cheese, chief executive of the Chartered Institute of Personnel and Development, criticised Cred for a “missed opportunity” to press for mandatory disclosure, adding: “Racial equality at work is not just about participation in employment but also about progression into more senior roles. Pay reporting can highlight organisations and sectors where this is not happening.”

Sandra Kerr, of Business in the Community, campaigns for mandatory reporting © S Meddle/ITV/Shutterstock

Sandra Kerr, race director at the charity Business in the Community, which has campaigned for mandatory reporting, said that while disclosure was not a “silver bullet”, it prompted companies to examine where people were sitting in their organisation, and was a way of “ensuring that the conversation is had at the top table”.

BITC has found that barely one in 10 large companies reports on its ethnicity pay gap voluntarily, and points to a sharp drop-off in gender pay reporting last year, when the pandemic led to a suspension of the usual requirement to disclose the pay gap between male and female staff.

The government consulted in 2018 on options to introduce a mandatory requirement, and has tested possible approaches to reporting with various businesses, but it has not yet taken further action. The Department for Business, Energy and Industrial Strategy said that it would respond to the consultation “in due course”.

Ethnicity pay reporting is more complicated than for gender. One issue is disclosure: many companies hold only patchy data because employees do not have to disclose their ethnicity and some are reluctant to do so — or unable to find a box to tick that matches their heritage.

A bigger issue is sample sizes. Ideally, employers would give a detailed breakdown of outcomes for different ethnic groups, but it is not always possible to do this while preserving anonymity. Cred argued that many employers recruiting from predominantly white areas do not have enough ethnic minority staff for a median pay comparison to be meaningful.

But business groups say these issues are manageable, if companies also put the headline figures in context and explain how they plan to close pay gaps.

Network Rail has published figures showing the pay gap for black employees is much bigger than for Asian colleagues © Alamy Stock Photo

Network Rail, for example, has published figures showing the pay gap for black employees is much bigger than for Asian colleagues, based on disclosure by 90 per cent of staff. With more than 100 nationalities among its staff, it collects more granular data to inform internal policy but does not publish figures where the sample size is too small to be reliable.

Sainsbury, meanwhile, has published figures showing that median pay for black employees is higher than for white colleagues — explaining that more black staff work in London stores with a higher pay weighting. Mean pay for black employees, who are under-represented at senior level, still lags.

Without an accompanying narrative of this kind, a pay report is “not worth the paper it’s printed on”, Kerr said.

The complexity of reporting ethnicity pay data is no reason not to report it, as Andy Haldane, the Bank of England’s chief economist, has argued.

“Published pay gaps are a starting point for corporate and national accountability and explanation, not an end point,” he said in 2019. “No single metric can perfectly summarise all dimensions of diversity. But publication of a single metric can, and has, served as the catalyst for an explanation and action.”



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