1 ASSETnet: Assets and ethnicity network Dr Omar Khan, Head of Policy Research
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ASSETnet: Assets and ethnicity network
Dr Omar Khan, Head of Policy Research
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About Runnymede
The Runnymede Trust is an independent policy research organisation fighting for racial justice through:
High quality research and analysisEngaging communitiesInfluencing policy
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About ASSETnet
Aim is to spread awareness and raise interest • About asset-building policies among race equality and other organisations• About ethnicity among those already committed to asset-building
Three elements• Social media site (please join!)• National workshops/events (UK, Germany, Hungary, Spain, Belgium)• Policy conference in Brussels (February 2012)
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Why Assets Matter: Evidence
Assets are far more unevenly distributed in the UK than income• Anywhere from 10–20% of people have no assets at all• Wealthiest 1% owned approximately a fifth of the UK’s marketable wealth... Half
the population shared only 7% of total wealth• Two-thirds of British households in Britain have less than £3000 in non-housing
savings and assets.• Housing:
• 40% of the total wealth in the UK, or £6875 billion, is held in housing.• In 2003, half the UK population owned only 1% of non-housing assets.
• Consequences: less choices, social mobility, ability to provide for children, and social cohesion
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Why Assets Matter: Ethnicity
• 60% of Asian and Black British people have no savings at all, twice the rate for white people. Less diverse too.
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Why Assets Matter: Arguments
• Social mobility: fair life chances as well as efficient markets require more people to have assets
• Behavioural: ‘while income feeds people’s stomachs, assets change their minds’ (Sherraden, 1991)
• Freedom: Expands choices
• Citizenship; people hold a ‘stake’ in their society. Integration/Cohesion
Different arguments for asset-building lead to different policies
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Why Assets Matter: PoliciesPolicies in UK focused on savings and behavioural arguments (start
habit). Not redistributive, citizenship or freedom.• Child Trust Fund, Saving Gateway: scrapped• NEST: auto-enrolled pensions scheme for low-income. Growth and security• Housing: shared ownership, other schemes• Asset inequality and taxation:
• No asset-based tax policies for low-income people; tax incentives on ISAs and pensions as asset-based policies for upper income quintiles
• Inheritance tax and wealth tax?• Council tax or property tax? Revenue used to provide assets for all?
• Shared or collective ownership: a variety of policies for everyone to own in (part-)publicly owned institutions or in public goods. Details important.
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Ethnicity and asset-holding in the UK
• Evidence that 60% have no savings• Bangladeshi and African with less than one tenth White British
asset-holding• Following slides explain labour market experience• However, might expect migrants to have less
• No intergenerational inheritance• Labour market access: social networks, qualifications, (perceived) language
• But evidence that British-born BME men more likely to be unemployed than foreign born fathers (Heath and Li)
Low income and ethnicity
0 10 20 30 40 50 60 70
Bangladeshi
Pakistani
Black African
Black Caribbean
Indian
White Other
White British
Income poverty rate (%)
• Bangladeshi (65%), Pakistani (55%), White British (20%)• Reflects unemployment but also poor quality work
Income poverty rate by ethnicity, 2002-5
Self-employment and ethnicity• Pakistani and Bangladeshi with highest rates• Most British-born groups lower than migrants, except above• Discrimination as cause? In recruitment (DWP survey), and
progression (RfO research)
Proportion of working population in self-employment
by ethnicity, 2007
0 5 10 15 20 25 30
White
All BME
Pakistani
Bangladeshi
Chinese
Mixed
Indian
Other
Black
Black African
Self-employment (%)
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Ethnicity and self-employment by sector
• Chinese (72%) and Bangladeshi (63%) much more likely to be in Catering.
• Pakistani (36%) and Black African (17%) much more likely to work in Transport .
• Higher income volatility, greater chance of business failure, and no employer pensions contribution or other benefits
Industry of self-employment by ethnicity (males), 2001
0% 20% 40% 60% 80% 100%
Chinese
Bangladeshi
Indian
Pakistani
White
Black Caribbean
Black African
DistHotelCater Manufacturing Transport Construction Finance Other
Conclusion: Questions for microfinance• Do we want ‘repeat’ customers? Danger is that lose best clients as they build
up savings or improve credit score or business skills to get ‘mainstream’ loan.
• Why people need microfinance: in part because they have no savings or assets
• Can microfinance institutions develop alternative policies, including short-term AND long-term savings?
• Should all assets be ‘leveraged’• If focus on self-employment and entrepreneurship, how ensure social
protection and rights, in particular pensions?• Are we reaching migrants and ethnic minorities, or are they being channeled
into particular sectors?
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Contact us• To discuss our research and work, please
contact
• Omar Khan• [email protected] • 020 7377 9222
BME people and pensioner povertyRisk of pensioner poverty by ethnicity, 2007-8
0
10
20
30
40
50
60
White Pakistani &
Bangladeshi
Black Caribbean Indian Chinese or other All
Risk
of p
ensio
ner p
over
ty (%
)
• All (18%), Black Caribbean (30%), Pakistani & Bangladeshi (49%)
Why are BME people poor when older?
White Ethnic minorities
% with private pension (in employment) 53 39
All Ethnic minorities
% building entitlement to S2P 75 65
% with no savings
Black or Black British 63
Asian or Asian British 60
All 33
• Less likely to have pensions…
• Less able to compensate with other assets – • Savings• Home ownership
(2005-6)
(2005)