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Racial Pay Gap

Australia's Racial Pay Gap


2 mins 40 secs read time

Racial disparities and income inequalities have been a problem for people of different ethnicities for decades. Racial Pay Gap is defined as the wage difference between two different ethnic groups. While several laws and government initiatives have been established to close these gaps, progress on this issue is slow. Races are still experiencing unequal pay opportunities today.


Racial Pay Gap in Australia


In Australia, migrants originated primarily from the UK before the Second World War. The country’s immigration policy changed after 1945 to attract skilled migrants to strengthen its economy. As a result of policy shifts, immigrants from countries like Greece and Italy were able to settle here. Because of migration, Australia now has a very diversified population.


Despite this, the pay scale among employees is unequal. Due to their race, skin colour, gender, and origin, people with the same skills and experience still get paid less than others. According to the Australian Bureau of Statistics Survey, non-native English-speaking countries are more likely to receive 24% less pay than major English-speaking countries (17.4%) and Australian-born (19%). Conversely, people born in Australia or other English-speaking countries are more likely to live in the highest 20% income group, at 25% and 22%. 


In 1975, Australia implemented the Racial Discrimination Act to protect people of a different race, colour, or ethnic origin from discrimination. However, despite the legal protection, there are still reports of prejudice and discriminatory treatment of migrant workers in the workplace because of their ethnicity. According to 2019 ABS statistics, it is challenging for both aboriginals and migrant workers to find a first job.


According to Australian Human Rights Commission, it takes almost half (44%) of new migrants three months to land their first job. Friends and relatives endorsed employment for 69% of migrants who had trouble obtaining work. 33% said they have been the target of bias because of the colour of their skin, their ancestry, or their faith. Some challenges experienced by aboriginals and migrants looking for a job include lack of Australian work experiences, lack of local references and networks, language differences, and skills that are not qualified nor recognised. 


Strategies to Bridge Racial Wage Gap


These are strategies that businesses can adopt to foster genuine social change.


  • Build Racial Literacy: It is never too late to build racial literacy in your business. Businesses can kickstart Racial Literacy by identifying the diverse cultures in the business and asking for feedback on strategies to educate other employees to help understand and celebrate everyone’s uniqueness and qualities. Implement race-focused initiatives to mitigate and eliminate racism while building cultural competence and safety.


  • Pay Transparency: Bridging the racial wage gap starts with pay transparency. Conduct market research to gauge the average salary of the role and offer compensation based on skills, experience, and qualifications. Complement this with yearly pay reviews and audits to keep compensation updated and competitive.


  • Remove Racial Bias in Recruitment: Racial bias can be removed during recruitment through training the team to recognise unconscious bias, reviewing job descriptions, and diversifying job advertisement channels, such as JobActivator, instead of the usual channels like SEEK. Implement a structured and consistent evaluation form during recruitment to assess a candidate’s skills and quality of work rather than personal attributes.


  • Collaborative Hiring: Collaborative hiring enables employees with diverse experiences and backgrounds to help with the interview and hiring of candidates. This helps to eliminate cognitive biases such as confirmation, ingroup, projection bias or selective perception.


  • Offer training and development: With the high competition for talent, businesses can turn to hire job seekers without experience with the intention of training and development. This gives non-skilled job seekers the chance to work and promotes internal promotion within the company, which fosters a sense of loyalty and nurturing culture.


If you need help in reviewing your Racial Wage Gap Strategies, Recruitment, or conducting a Pay Review/Audit, our Catalyst Central team could help!


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