UNEMPLOYMENT / MAR. 25, 2014
version 3, draft 3

UK Prejudice and Inequality Rise by 16% in Recession

New research by the London School of Economics and Social Policy (LSE) has found that economic recessions have a significant impact on the employment of people from an ethnic background. 

Periods of high unemployment in the UK see a rise in people who admit to holding racially prejudiced views and this leads to ethnic minorities disproportionately suffering within the job market.   

Study

Researchers came to their findings after analysis of changes in self-reported racial prejudice reported over a 27 year period.  

The proportion of people who reported that they were at least 'a little prejudiced' towards those from other races was seen to increase slightly whenever the economy dipped and unemployment rose. 

Educated 

Researchers found a significant increase in self-reported prejudice in highly-educated people. The highest rise was seen in full-time employed, middle-aged white men - the group most likely to be employers or managers in the workplace.  

In a buoyant economy, highly-educated individuals are normally less likely to express racial prejudice compared to their lesser educated counterparts. Researchers found, however, that a 1% increase in unemployment - as was seen in the recent Great Recession - matches a 16% increase in the proportion of educated, employed white men who admitted to some racial prejudice.  

In females, the largest increase in self-reported racial prejudice was found in highly-educated, full-time employed women aged between 35-64. Economists estimate that a 4% increase in unemployment will increase this group's racial prejudice by as much as 8%. 

Dr Grace Lordan, the paper’s co-author and lecturer in health economics at LSE, explained the figures:  

“During a recession people who are normally in secure, well-paid jobs suddenly find their position under threat. Our study suggests that this increased insecurity may turn into an increase in prejudice towards ‘others’ who could be perceived as competitors.”  

Inequality 

Economists fear that the rise in racial prejudice during a recession may translate into greater inequality for workers from ethnic minorities. The study found through the analysis of regional employment and wage data for native-born British workers that non-white individuals have lower wages and poorer job prospects in times of recession. 

Based on labour force data over the past 20 years, researchers estimate that when the rate of unemployment increases by 4%, the already existing wage gap between highly-educated black and white men increases by as much as 10%.   

Similarly, a 4% rise in the overall UK unemployment rate leads to highly-skilled black men being 5% more likely to be unemployed than highly-skilled White men.  

Dr Lordan comments on the findings, "As well as lowering the standards of living and wellbeing generally, recessions disproportionately harm black and other ethnic minority communities, who are less likely to be employed or fairly paid at the baseline."  

Adding, “Policy makers need to be mindful of how recessions can disproportionately penalise minority individuals and should develop policies to avoid these harmful effects in the future.”   

 

Notes  
 
Source: When Work Disappears: Racial Prejudice and Recession Labour Market Penalties

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