There is little relationship between merit and reward

Whether you define merit in terms of talent, effort, or contribution, there is little discernible link between merit and reward. Instead, the structure of the labour market channels disproportionate rewards to particular professions, while failing to adequately reward other forms of work. As a result, many people doing critical work, including but not limited to key workers, are underpaid, while millions of people, most of them women, carry out crucial care work for no money at all. Even if we were able to construct a perfect meritocracy where no one was disadvantaged by the impact of their circumstances at birth on their wealth, education and so on, the system would still not be fair because of the impact of luck (in terms of the genetic lottery of talents and skills, how much our talents and skills are valued and remunerated, and the fact that unequal outcomes in one generation produce unequal opportunities in the next, leading inescapably to a hierarchical society defined by hubris for those at the top and humiliation for those at the bottom).

Ethnic minority workers earn on average 2% less than similarly qualified white employees, although after controlling for differences like age and education, the gap is about 10%. The gap can’t simply be explained by ethnic minority workers being employed by firms that pay lower wages, because this pay gap also exists within organisations. The only apparent explanation for this gap is that ethnic minority workers are being treated and paid unfairly. [Another report found that the ethnicity pay gap has not changed much in 25 years, and that for black, Pakistani and Bangladeshi men and women, pay gaps with white men and women have widened. The government has recently backtracked on an earlier promise to require large companies to report on their ethnicity pay gap. There are also significant pay gaps for women and disabled people (statistics). Pay gaps are usually reported on in terms of hourly pay, which is a simpler way of assessing fairness in terms of reward for effort, but in structural terms it is more illuminating to compare weekly pay, which takes into account differences in individuals’ or groups’ ability to work and the availability of work; gaps in terms of weekly pay are generally much higher than gaps in terms of hourly pay.]

Will Hutton set out principles for public sector pay over a decade ago that could equally apply to the private sector: Fairness in pay [is] the due desert for discretionary effort which delivers desired results; reward should match the employee’s actions and contribution. Embedded in this notion is proportionality: due desert should rise proportionally as individuals make more of a contribution. It should not rise limitlessly; there are boundaries not least because no one individual in any organisation can argue that every improvement is due to his or her actions alone – thus the case for some multiple of top to bottom pay. But fair pay also involves an attitude towards luck and process. Individuals should be paid for their effort and contribution, not for the luck of being in the right place at the right time. And pay should be determined by an impartially fair process.

Institutional racism is common in all sectors and organisations. A majority of women of colour have been forced to change some aspect of their appearance or language to conform, and have experienced discrimination during the recruitment process. Large minorities have experienced lack of progression or promotion compared to colleagues, and have had their wellbeing impacted as a result. These issues affect women of colour at every stage in their careers.