People from working-class families earn several thousands of pounds a year less on average for doing the same jobs as their more privileged peers, according to a landmark study of the class pay gap.
Professionals from working-class backgrounds earn £6,718 less on average, while women and most ethnic minorities face a double disadvantage, according to the Social Mobility Foundation (SMF), which conducted the research. Working-class professional women earn £9,450 less than men, while working-class Bangladeshi professionals earn £10,432 less than their white counterparts in the same jobs.
Alan Milburn, the former health secretary and now chair of the SMF, called on ministers to legally require companies to measure and report their class pay gaps. Only three companies do, according to the foundation: the accountants PwC and KPMG and the law firm Clifford Chance.
“Those on the receiving end of this class pay gap are being hit by a double whammy as the cost-of-living crisis also eats into their incomes,” Milburn told the Observer. “Employers and the government need to take urgent action to stop hundreds of thousands of workers from being undervalued and underpaid. Creating a legally based register for class pay gap reporting is morally right and economically savvy. At a time when incomes are being squeezed, such a legal change can be a part of the solution to combat the cost-of-living crisis.”
The 13% class pay gap affects hundreds of thousands of people and means that tomorrow marks the day when working-class professionals will effectively start working for free, according to the SMF.
The analysis of pay used data from the Office for National Statistics’ Labor Force Survey from 2014 to 2021 across professional and managerial occupations, which account for more than a third of the UK workforce. Since 2014, the survey has asked half a million people a year about their parents’ jobs, one indicator of socio-economic class.
Working-class chief executives earn £16,749 less than their peers. Finance managers are paid £11,427 less, and accountants and solicitors have a gap of more than £8,000.
Class pay gaps are smaller in less well-paid professions, but still substantial. Police officers, firefighters and army officers earn £5,229 less than their middle or upper-class peers. Academics face a £5,807 penalty, with £5,123 for IT workers. Teachers and social workers also earn about £2,000 less.
The class pay gap was identified by Prof. Sam Friedman and Dr. Daniel Laurison in their book The Class Ceiling in 2019.
“People tend to expect differences but think that perhaps a privileged background can buy an expensive education, or perhaps it’s to do with how hard people work,” Friedman said. “But when you adjust for all of those you can see that there is a persistent gap that is essentially unfair. It’s a stark rejoinder to any celebratory notions of meritocracy that people might hold.”
The “brute force of parental wealth” is the major factor, allowing children to get on the housing ladder or insulate them from risk, he said. “People often have to walk this incredibly precarious tightrope of short-term roles that lead to really lucrative end-of-career roles.”
He added that class had been “completely absent from equality and diversity agendas. It’s now something that is key to discussions.”
PwC began publishing data about its pay gaps for class and disability last year, showing a 12.1% class pay gap in its UK workforce, alongside its existing gender and ethnicity pay-gap reporting.
Kevin Ellis, PwC’s UK chair, said addressing the class pay gap was vital for the company’s bottom line. “We’ve got 46,000 clients from all kinds of backgrounds, geographies, and unless we represent our clients we’re irrelevant,” he said. “So it’s really important that we have a diverse workforce. Besides that, if you’re trying to be a magnet for talent, you’ve got to make sure that you don’t exclude the talent you’re trying to attract. Unemployment is virtually zero, particularly for young talent and for different backgrounds.” The company also no longer asks candidates for their Ucas points and has dropped a requirement for a minimum 2:1 university degree.
Ellis said there had been resistance to measuring class, both from partners who felt that it would unnecessarily make PwC a target for criticism and from employees who were suspicious of why they were being asked to reveal their background. Initially fewer than 30% of employees were happy to share the data, but that has risen to 88% as Ellis and other executives have explained why, he said.
Steven Barrett is a commercial barrister who grew up in Birkenhead, the son of an electrician. “It sounds ridiculous to my upper-middle-class friends but I always have Kellogg’s cereal and Fairy Liquid in this house, because growing up, those were two things we could not afford,” he said.
Barrett, who mentors young people for the SMF and chairs the legal social mobility charity BVL, said he believed he would have earned more if he came from a different background, and felt success relied on changing his accent and appearance. “I tell my mentees I’ve been ‘posh washed’,” he said. “I became posh performatively. There are these endless controlling rules which seem to be there to expose the person who is being performatively posh but isn’t genuine – there’s a cat-and-mouse game where you’re constantly worrying you’re going to be exposed.”