MNone of Britain’s professional workplaces share a shameful secret. Working class employees earn an average of £6,718 a year less than those from well-to-do backgrounds even when they do the same job.
Those on the receiving end of this wage gap take a double whammy as the cost of living crisis eats away at their income as well. Employers and government alike need to take urgent action to prevent hundreds of thousands of workers from being undervalued and underpaid.
The data couldn’t be more clear. Research sponsored by the Social Mobility Foundation, which I chair, re-examined the work of academics Sam Friedman and Daniel Lorrison to calculate the class wage gap at 13%. In other words, people from disadvantaged backgrounds who landed professional jobs 13% of the year might work for nothing. That’s roughly one day for each of the seven days.
In other words, this means that starting tomorrow, the day of the class wage gap, professionals from working-class backgrounds will virtually stop earning for the rest of the year. The gap is wider – more than £8,000 – for CEOs, CFOs, management consultants and lawyers.
Frustratingly, the research found that when gender and ethnic differences are taken into account, those from a working-class background experience a “double disadvantage”. Working class women are paid £9,450 less than their male colleagues, even when both work in higher professional-management positions. The study also found that people of Bangladeshi and black Caribbean descent were paid £10,432 and £8,770 less, respectively, than their white peers in the same jobs.
This pay gap isn’t just an indictment for professional employers. It is morally unfair and economically illiterate. British occupations are a cornerstone of the modern economy. In 2021, service industries contributed 1.7 trillion pounds of gross value added (GVA) to the British economy, 80% of the total figure. Britain’s success in the global economy depends on the best people, regardless of their background, being attracted, not deterred, by careers.
A fair day’s pay for a fair day’s work is the least anyone should expect. When this progressive principle is undermined, people feel that their efforts are not rewarded, and resentment grows and with it the risk of further social division.
Fortunately, some employers are taking preventative measures. The likes of Clifford Chance, KPMG and PwC are now publishing class pay gap data. Some set goals to drive their progress, realizing the positive impact that reducing class inequality can have on a company’s culture and, ultimately, its business performance. But at the moment, they are in the minority. Many companies should follow suit. This is where the government can help.
The introduction of recognition of the gender pay gap into UK law was a historic and powerful moment in women’s struggle for gender equality. Since April 2017, organizations with 250 or more employees in England, Scotland and Wales are required to publish gender pay gap figures annually.
The publication of this data has highlighted the worrying and unacceptable gap between the average income of men and women. He has highlighted the issue on the agenda of the worst performing companies and employers. The legislation appears to be having a positive effect. Among all employees, the gender pay gap decreased to 14.9% in 2021 from 17.4% in 2019.
It is time to take the same approach to closing the wage gap in the classroom. Just as it has done for the gender pay gap, the government should launch a consultation on creating a legal registry for the preparation of class wage gap reporting. The fact that gender and race inequality remain significant problems should not blind employers or government to the need to take action to close the class wage gap.
At a time when income is shrinking, such a legal change could be part of the solution to combating the cost of living crisis. It will be an important step towards creating more equal opportunities for those from disadvantaged backgrounds. The class wage gap is a major barrier to inequality and social mobility. It’s time to close it.