People from working class backgrounds earn on average £6,718 per year less than those doing the same jobs from a more privileged background, the Social Mobility Foundation has found.
According to the SMF, today is Class Pay Gap Day; the day in the year when those from working class origins in higher managerial or professional roles stop earning relative to their peers who hail from professional-managerial backgrounds.
The SMF calculates socio-economic background based on an employee’s parents’ occupation at age of 14, a measure recommended by the Social Mobility Commission. If an individual’s parents were considered to have a professional or managerial role at this point, the individual is deemed to come from a professional and more privileged background.
Class pay gap
Those from privileged backgrounds in the most prestigious jobs are paid over £51,000 a year, but those from working class origins in the same jobs are paid less than £45,000 per year, the SMF found.
People from working-class backgrounds earn 13.05% less than their most advantaged peers, meaning they work almost one day in seven, per year, for free.
Adding gender or ethnicity into the calculation shows even deeper divisions. Working class women are paid £9,450 less than their male colleagues, while people of Bangladeshi and Black Caribbean heritage from working class backgrounds are paid £10,432 and £8,770 less respectively than their White peers in the same jobs.
The class pay gap is most defined if you are a CEO, according to the SMF. CEOs from working class origins earn £16,749 less per year than their privileged counterparts, followed by finance managers, who face a class gap of £11,427.
The gap is markedly smaller in science roles, social work, engineering, journalism and academia. Scientists from working-class origins do not face any pay penalty at all.
The SMF found that the class pay gap is highest in Northern Ireland, where employees from working-class backgrounds earnt more than £8,500 less than their peers from professional households.
Chair of the SMF, Alan Milburn, said that people on the receiving end of the class pay gap were being “hit by a double whammy as the cost of living crisis also eats into their incomes”. He added that the class pay gap was an “indictment of professional employers”, “morally unjust” and “economically illiterate”.
Milburn pointed to employers that have already committed to publishing pay data on employees’ socio-economic backgrounds, including PwC, KPMG and Clifford Chance. He urged the government to introduce measures to require employers to publish their class pay gap in the same way they publish their gender pay gaps.
“Some are setting targets to drive their progress, recognising the positive impact that reducing class inequality can have on a company’s culture and, ultimately, its business performance. But for now, they are in a minority,” he added.
“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. It would be an important step towards creating more of a level playing field for those from disadvantaged backgrounds.”
The Social Mobility Foundation publishes a list of employers performing well on improving access and career progression for people from a wider range socio-economic backgrounds. Last year law firm Browne Jacobson topped the list.