Inequality is seriously bad for the economy’s health
In a recent webinar on the Ethnicity Pay Gap, hosted by the Housing Diversity Network, research from the ONS suggested that black employees under the age of 30 suffered significantly less inequality than those over 30. So the logical conclusion is that too few black employees are progressing to senior positions, in both the public and private sectors.
But other than the obvious point of fairness, why else is this inequality such a problem? Well, studies on both sides of the Atlantic claim it has cost the economies in the US and the UK billions, and perhaps trillions. We know that here in the UK there are societal factors which have caused the spread of unemployment, where generations of families have never had a job, and this cycle of despair often falls hand in hand with ill-health and disability.
This societal inequality should have been addressed decades ago, as should the issue of race inequality in employment, in the housing sector and beyond. Failure to do so has been costly. A 2017 government review, carried out by Baroness Ruby McGregor-Smith, suggested that the UK economy would be up to £24 billion better off if BAME employees were able to progress in the careers at the same pace as their white colleagues.
The report was entitled, ‘The time for talking is over, now is the time to act,’ but progress has been slow. Meanwhile, over in the US, a McKinsey study has reported that if the Ethnicity Pay Gap was closed today it would add up to $5 trillion to the US economy over the next five years.
Diversity in senior positions creates a better economy and, in terms of individual organisations, better profit, morale and staff retention. Now is the time to replace sentimentality with innovation and action, and that is what the HDN Board Diversity Programme was set up to do. The programme helps organisations to identify or find board potential in employees and candidates from diverse backgrounds.
The starting point is to effect meaningful change, and increase the diversity of boards, particularly in the housing sector. The end game will mean the talking has stopped, the action has been taken and every talent is recognised and utilised.
It makes perfect societal and economic sense.