Why do UK Chinese out-earn British counterparts?

Chinese and Indian workers in the United Kingdom are earning more than their British counterparts, according to a new report.

Pundits say that the findings may be in doubt because of a small sample size, but suggest the outcome is mainly because families from those ethnic groups tend to invest heavily in higher education.

The study by the UK Office for National Statistics (ONS) reveals that expatriate workers from China and India consistently had the highest median hourly pay of any ethnic group in 2012-18.

The new report is the first of its kind to comprehensively analyse ethnicity pay gaps in the UK, which found that in 2018 employees from the Chinese diaspora on average earned 30.9 per cent more than white British workers.

The Chinese make up the smallest proportion of Britain’s migrant groups at 0.5 per cent

Carol Woodhams, professor of human resource management at the University of Surrey, said: “It is likely that Chinese families prioritise investment in education and tertiary qualifications.

“They may make well-informed choices relative to which subject majors to pursue, that lead to highly paid occupations. The evidence shows that Chinese workers commence their UK careers at a much higher hourly pay rate.”

Hamish Anderson, public policy analyst at the ONS, said: “One of the main reasons the Chinese ethnic group may see higher wages than other ethnic groups could be due to visa restrictions.

“For example, migrants from China are likely to have higher qualifications or skills needed to enable them to get a visa in the first place – although there is a difference between nationality and ethnicity so this obviously wouldn’t apply to everyone.”

The study found three ethnic groups were shown to have a higher median hourly pay than white British people in the UK last year. Those with a Chinese background earned £15.75 ($19.65) an hour, while the average Indian worker earned £13.47 and those from the mixed/multiple ethnicity group were paid £12.33. British workers earned £12.03 an hour.

When looking at the findings, Woodhams said the first point to note is that this reflection was based on a relatively small sample of Chinese employees.

“This makes it statistically unstable,” she said. “Small changes to the fortunes of this limited population could have large implications for the pay gap. There are also other influences that might not be immediately obvious. For example, there will be unequal geographic distribution of Chinese employees – there is likely to be a higher density of Chinese workers in cities where pay is higher, especially in London. This will raise the median Chinese wage.”

Woodhams pointed out there are other possible differences in ways that Chinese women engage in the labour market compared with their UK counterparts, adding: “They may have less time out of the labour market and greater familial support for childcare responsibilities, lowering their incidence of part-time working and keeping careers on track.”

Geraldine Healy, professor of employment relations at Queen Mary University of London, said: “This is certainly an eye-catching headline. However, we do need some caution in taking the figure at face value.”