Was Benjamin Disraeli Britain’s first BAME Prime Minister? Or, why it is good that the BAME term has been scrapped.

by Sanghamitra Bandyopadhyay*

Was Benjamin Disraeli Britain’s first BAME (Black, Asian and Minority Ethnic) Prime Minister? Clearly not. British Jews are not understood to be BAMEs, in spite of being ethnic minorities and comprising less than 0.5% of the British population. British Jews are some of the largest individual contributors to UK’s GDP, having become prominent in law, politics, business, entertainment and academe.

This paradox is also evident when one identifies Rishi Sunak, Priti Patel, and Suella Braverman as BAMEs. As British Indians, they too are ethnic minorities, constituting just over 2% of the British population, but they don’t exactly constitute a portrait of economic or social deprivation. Neither do Britons such as Cush Jumbo, Konnie Huq, Kazuo Ishiguro, Vanessa Mae, David Oyelowo, Jasminder Singh or Gok Wan conjure images of disadvantagedness.

Of course, the term BAME is all about describing economic and social disadvantage. We all knew that, but of recent public discourse in Britain has comfortably used this poorly defined classification to identify Britain’s disadvantaged individuals. Yet a cursory look at the current statistics for UK’s income distribution by ethnic group has some interesting findings. By recent statistics, British Chinese have the highest incomes, followed by Indians and whites. By contrast, British Bangladeshis, Pakistanis and Black/Caribbean/African and Black British are least represented in the top earning quintile. The findings are reversed when we examine the bottom two quintiles, where British Bangladeshis, Pakistanis and Black/Caribbean/African and Black British occupy much of the bottom of the UK income distribution. Thus all British ethnic minorities are not disadvantaged as the term BAME would suggest.

Source: UK Parliament document ‘Income inequality by ethnic group’, 2020, Commons Library, https://commonslibrary.parliament.uk/income-inequality-by-ethnic-group/

UK’s wealth inequality has yet another harsh story to tell. While the median white British and Indian household in the last decade was worth £282,000 and £266,000, respectively, the median black Caribbean household was only worth £89,000. Black African and Bangladeshi households had the lowest household net worth of just £24,000 and £22,000, respectively. These wealth inequality statistics are partly explained by age (as the white British and Indian households are older), but they are also indicative of historical deprivation in education and access to good jobs. Lower incomes mean lower saving rates and thus fewer assets.

The incidence of Britain’s socially disadvantaged also varies greatly by region. The majority of ethnic minority poverty in the UK is concentrated in inner city London. Three-fifths of black Britons live in London.  Outside London, the distribution of the ethnically disadvantaged is similar to that of disadvantaged whites across the UK. Ethnic variation in poverty is remarkably less pronounced outside London.

All said, Britain’s disadvantaged ethnic groups deserve outstanding attention due to these stark disadvantages. But how should we identify these groups of individuals?

There are tried and tested means of identifying people who are disadvantaged and poor. Indeed, Frederick Engels in his 1845 treatise, the Conditions of the Working Class in England in 1844 succinctly sums up what it means to be economically vulnerable: ‘He knows that, though he may have the means of living to-day, it is very uncertain whether he shall to-morrow.’ Economic and social disadvantage has no regard for ethnic or national borders if the preconditions for precariousness are met – namely, low levels of education, poor access to jobs and regional poverty.

When media commentators, organisations and policy makers wish to identify groups of Britons who are subject to economic and social deprivation, they can turn to a rich body of economic literature which describes how to count the disadvantaged, identifies specific groups by demographic characteristics and explains mechanisms that allow for the persistence of poverty amongst these identified groups. The recent Deaton Review (2020) measuring the unequal impact of Covid-19 on ethnic minorities in the UK sets a fine example of how policy makers can identify specific ethnic minority groups disadvantaged by economic downturns, and thus can devise policies that mitigate the effects of the shock.

There is thus no a priori reason for a poorly conceived definition of disadvantagedness such as BAME. It neither serves the purpose for accurately counting the disadvantaged, nor is it able to correctly identify ethnic groups who are truly disadvantaged, and it certainly serves no purpose to devise policies that support these individuals. A further downside of using broad acronyms such as BAME is that Britain’s disadvantaged ethnic groups are likely to change over time. Afro-Caribbean/African, Pakistani and Bangladeshi communities may cease to be economically disadvantaged in the near future, and others may take their place.

The ill-defined categorisation of disadvantaged Britons as BAMEs has unfortunately imposed an unwanted, meaningless and incorrect identity on a large group of very different people. It has wedged a divide between whites and non-whites, and the haves and have-nots. It is sufficient to identify economically and socially disadvantaged Britons as ‘vulnerable’ or ‘disadvantaged’ or just ‘the poor’, as is usual practice in other countries.  For these reasons, it is good that the Commission on Race and Ethnic Disparities yesterday has announced the scrapping of the BAME term from public discourse in the UK.

*Sanghamitra Bandyopadhyay is Deputy Director of the Centre for Globalisation Research and Reader in Economics. She is also the lead for the UK-wide research group, Research Circle for the Study of Inequality and Poverty.

Measuring the representativeness of social partners in Europe

By Marta Martínez and Pedro Martins

Are workers and firms well represented in social dialogue? In many countries, affiliation rates to social partners (employer associations and trade unions) have been decreasing for decades. However, social dialogue still regulates labour conditions of a significant part of firms and workers through collective agreements and, in some cases, their extensions. The result of this social dialogue generally includes conditions over wages, working time, training, and many other issues, with important effects on the labour market and the economy.

Creator: Hilch Credit: Getty Images/iStockphoto

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What drives social returns to education?

By Ying Cui and Pedro Martins

Schooling typically delivers significant private returns, with better educated individuals generally receiving higher earnings. However, the schooling of one person has also the potential to generate significant positive effects on other individuals, through formal and informal social interactions between them. Economists refer to these spillovers as ‘externalities’. These third-party effects also explain the wedge between private and social returns to education: while the former are typically estimated at 5% to 10%, the latter can be as high as 10% to 20%.

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Corporate social responsibility and cross-border M&A by Chinese firms

By Xianmin Liu
What is CGR PhD's research about? 
Introducing research projects of CGR PhD members

My research aims to explore the relationship between corporate social responsibility (CSR) and the success of cross-border M&As by Chinese A-share listed firms to extend our understanding of why and how Chinese firms pay more attention to CSR performance in initiating cross-border M&A and going global.

In the last three decades, both the value and number of cross-border mergers and acquisitions (M&A) have soared in waves (Xu, 2017). As a majority of foreign direct investment (FDI) (Albuquerque et al., 2019), cross-border M&As have become more prevalent to gain such as strategic assets, natural resources, market power and synergistic effect. Accordingly, the extant researches in cross-border M&A are also rapidly increasing, especially in emerging market countries like China (Karolyi and Liao, 2017; Li, Li and Wang, 2019; Schweizer, Walker and Zhang, 2019), which is the biggest developing country and overtook Japan as the second-largest economy in the world since 2010. In addition, China is still a transitional nation and has a transformational and proactive government, promoting studies in cross-border M&A under the institutional environment with Chinese characteristics as well.

Source: Thomson Reuters Eikon M&A database, compiled by the author.
Note: Completion rate of cross-border M&A is the ratio of the number of completed cross-border M&A deals recorded by Eikon to the total number of announced cross-border M&A deals. Dotted line of China2 excluded the targets in Hong Kong, Macau and Taiwan, because they are special administrative region (SAR) of China.Read More »

Coronavirus recovery – lessons from the eurozone crisis

By Stella Ladi, Angie Gago, Catherine Moury and Daniel Cardoso

As governments around the world grapple with the public health and economic effects of the COVID-19 pandemic, there are striking similarities with the eurozone crisis that followed the 2008 financial crisis. Having researched this crisis, it is clear to us that there are some important lessons to apply to today’s recovery. The early signs indicate that the EU is responding much more effectively to this crisis than it did in 2008.

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CGR Working Paper | COVID-19 response needs to broaden financial inclusion to curb the rise in poverty

By Mostak Ahamed and Roxana Gutiérrez-Romero
CGR Working Paper 105

The ongoing COVID-19 pandemic risks wiping out years of progress made in reducing global poverty. In this paper, we explore to what extent financial inclusion could help mitigate the increase in poverty using cross-country data across 78 lowand lower-middle-income countries. Unlike other recent cross-country studies, we show that financial inclusion is a key driver of poverty reduction in these countries.

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How Germany flattened the curve

By Georg von Graevenitz

CORE links modern economic methods to pressing policy challenges: mounting inequalities, climate change, concerns about power in the workplace, and financial instability. COVID-19 has highlighted inequalities in new ways, demonstrated the risks of ignoring pollution linked to climate change and underscored the role of governments in stabilising economies, coordinating responses and preparing for adversity. The pandemic also highlighted the role of science and trust in protecting society against adversity. Differences in preparedness, often the result of many years of incremental policy developments, have been particularly significant in this fast moving crisis. This post describes how scientists, preparedness and luck combined to simplify crisis management in Germany. But neglect of the exploitation of workers in the meat-processing industry has created unexpected external effects as new lockdowns are now being declared.

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Making the case for LMIC to be partners in the global solution for COVID-19

By Kaouthar Lbiati

The growing success of efforts to contain the spread of Covid-19, the disease caused by the virus, may present yet another hurdle – How to end lockdown without causing a second wave? There is no modern analog for the shutdown of economic activity. Ending the lockdown needs unparalleled capabilities in testing, tracing and most importantly it needs researchers to deliver a new vaccine!

Source: https://wendyedavis.files.wordpress.com/2020/04/lockdown.jpg

This paper makes the case for low and middle-income countries (LMIC) to be part of the clinical evaluation of the efficacy and safety of the COVID-19 future vaccine, the ramping up of regional manufacturing capabilities for local immunization and underscores the critical importance of reaching an advanced purchase agreement with manufacturers and suppliers as well as building up multilateral financial partnerships with key institutions before even a vaccine is made available in either North America, Asia and/or Europe.

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A study of Indian Born Global Firms

By Amrita Manohar
What is CGR PhD's research about? 
Introducing research projects of CGR PhD members

The survival and success of a company internationally is dependent on a multitude of factors, such as their financial resources, past experience, and familiarity with their own domestic market in order to achieve this international presence. However, certain firms called ‘born global’ firms have been able to establish international operations despite not possessing the resources or experience. According to Knight and Cavusgil (2004), Born global firms (BGs) are companies that begin international operations either at or soon after their establishment, with a notable part of their revenue generated from their activities in foreign markets.

Apart from early internationalization, BGs are characterized by their small size, limited resources, lack of prior experience in the domestic and international markets, and limited knowledge. These characteristics serve to differentiate them from large multinational enterprises, domestic firms, and small and medium-sized enterprises that follow a more gradual internationalization path.

Source: Shutterstock

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Technological platforms in South Korean automotive, electronics and service robotics industries

By Soo Jung Oh
What is CGR PhD's research about? 
Introducing research projects of CGR PhD members

My research aims to explore and compare technological platforms in the South Korean automotive, electronics and service robotics industries to extend our understanding of why and how organisations build and use different types of technological platforms.

A technological platform is a modular architecture consisting of core components and peripheral components. The core components provide a foundation for peripheral components to be developed. For example, Apple’s iPhone is a core, and it gives a basis for application development which is a periphery. Therefore, technological platforms connect companies who can innovate and compete by developing core components as well as peripheral components.

Industrial robotic arms
Image from https://www.manufacturingglobal.com/technology/rise-robotics-manufacturing

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