David Green

What should we make of the ethnic ‘pay gap’?

What should we make of the ethnic 'pay gap'?
A protester at an equal pay demo (Getty images)
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If one group earns more and enjoys better workplace success than another, does that mean the less successful group is being discriminated against? There might be individual examples of discrimination but I’m not convinced this is proof of institutional discrimination.

Take career success: the underlying assumption is that a given ethnic group will have all the qualities that make for success in occupations such as medicine, law, the civil service, and more. If we focus on one narrow criterion, university attendance, then in the absence of discrimination we should expect an equal proportion of whites and non-whites to go to university. Universities whose racial composition is not equal find themselves accused of institutional racism, structural racism and even racism pure and simple.

Thomas Sowell, a black American economist, has done more than anyone to show the flaws in this type of reasoning. Here are two striking examples from the many that he offers. He looks at the success of people who scored in the top one per cent in IQ tests, and he studies the achievements of first-born children compared with their later siblings. These results have been in the public domain for decades but are nonetheless disregarded by many campaigners.

Most people would predict that having an exceptionally high IQ would lead to occupational success. And yet a famous study by professor Terman of Stanford University, found that outcomes were extremely varied. His team followed a group of 730 American men who scored 140 or more in IQ tests and their life outcomes when they were aged 25 or more were examined in 1940.

Scoring in the top one per cent in intelligence tests would lead most people to expect that this group would all go to university and do well in their chosen career. Some were indeed very successful but many had mundane occupations and about half a dozen had been chronically unemployed. Not all got graduate degrees. Some only had high school diplomas. A number were in relatively humble vocations as a matter of deliberate choice. Some liked to work with their hands, some enjoyed marketing, bookkeeping, and outdoor work like farming. Others preferred civil service jobs that left them free of responsibility outside working hours. They often spent their leisure hours on hobbies. Among those classified by researchers as successful, several had met someone like a teacher or relative who had inspired them to make a life-transforming choice.

To take only the most obvious difference, not all families or individuals strive to move up economically. Not all define success in the same way. The top one per cent of Americans in IQ tests contained many people who had no wish to be top lawyers, surgeons or political leaders. They lived fulfilled lives in the open air, preferring the feel of the sun and the wind on their cheeks to the stimulus of the committee meeting, or by making things with their hands, taking satisfaction from their mastery of a craft rather than the size of their bank balance.

Second, in his book Discrimination and Disparities, Sowell appraised the numerous studies that compare first-born children with subsequent siblings. Many studies comparing first-born children have been published in several countries and it turns out that being the first child is an advantage.

Before looking at outcomes, consider how much first-born and later-born children have in common. They have the same parents and are raised under the same roof and so they have the same race, genes, economic level, cultural values, and educational opportunities. Their parents’ educational levels are the same, as were their relatives, neighbours and friends. And yet studies find that being born first is an advantage. Researchers have speculated that it is probably because they receive undivided attention in their early years, as does an only child.

The difference has been detected on numerous measures. America has a system of National Merit Scholarships to help students with university fees, which are awarded annually based on tests. Beneficiaries have included Joseph Stiglitz, Paul Krugman, Bill Gates, and Jeff Bezos. When five-child families were studied, the first-born was the finalist more often than the other four siblings combined. There was also a marked advantage in two-child, three-child and four-child families.

Studies of Britain, Germany and the USA found that the average IQ score of first-born children was higher. A British study found in 2003 that 22 per cent of first-born got a degree compared to 11 per cent for fourth children. American studies have found that average earnings were higher for first-born children.

What do these results tell us? In many walks of life success depends on factors peculiar to each situation and small differences can make a large difference to outcomes. To compare whites and non-whites in the UK and to assume that there should be a random (equal) distribution of police officers, magistrates, high court judges, FTSE 100 chief executives, and prison inmates is a profound mistake. When there are multiple causes of success and numerous personal characteristics that make for success or failure, we should not expect outcomes to be evenly distributed between groups.

It is the grossest of errors to explain all life outcomes as the result of external impositions made because of biased judgements or the hostility of members of another group. At the deepest level, the mistake is to attribute causal significance to membership of an ethnic group. It explains very little about us and is nothing compared with our common humanity and citizenship.

Our society should not be seen as comprising mutually antagonistic racial groups. We are individuals, living in awareness of the judgments of others, but in practice responsible for making personal judgements and taking responsibility for them. Emphasising racial identity entails a denial that we are individuals with a personality that we shape over the course of our lives. Race is trivial; character is everything.

David Green is CEO of Civitas

Written byDavid Green

David Green is Director of Civitas

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