A lack of social mobility is costing the UK £19bn a year, a report produced by the cross-party thinktank Demos and the Co-op has found.
The Social Mobility Commission, which advises the government, defines social mobility as “the link between a person’s occupation or income and the occupation or income of their parents”.
The Co-op/Demos report details how in the UK, people from “lower socioeconomic backgrounds” are “far less likely to earn good incomes, even after accounting for levels of education”, with the World Economic Forum’s Global Social Mobility Index 2020 ranking the UK 21st out of 82 economies.
The researchers said the UK was missing out on £19bn a year in GDP growth as a result of this “systemic failure” to promote social mobility, and found, having surveyed 531 senior business leaders, that promotion of social mobility was linked to higher turnover.
Co-op, whose businesses include retail, insurance and funerals, has removed video interviews and the requirement for CVs as part of its social mobility policies, and began reporting its socioeconomic pay gap earlier this year. The business has a social mobility taskforce, whose members include Azra Keely, from Manchester, who came to the UK as a three-year-old refugee from Bosnia.
She told the Guardian: “I don’t believe social mobility in the UK is improving, in some ways, it feels like we are moving backwards. The cost of university education is higher than ever, meaning it’s becoming less accessible for those from lower-income backgrounds.
“Additionally, while there have been efforts to improve vocational training and apprenticeships, these are still underfunded and undervalued compared to university.
“Housing is another key issue. Unequal access to property ownership is a significant barrier to social mobility,” she said.
The Co-op/Demos report, The Opportunity Effect, makes a series of recommendations to government and business, including giving the new body Skills England, which is intended to drive growth by helping people get better jobs, a “statutory responsibility” to increase social mobility.
The report urges the government to consult large employers on increasing their minimum skills and training expenditure to meet the EU average of £3,000 per employee and consult on expanding pay gap reporting to socioeconomic as well as ethnic minority and disability gaps.
It also calls for the government to create a “Better Opportunities Fund” to fund social mobility projects, offer lower business rates for social enterprises and cooperatives, and ensure social mobility is “factored into public sector procurement”.
“New ideas, useful innovations, technological advances, artistic movements, scientific discoveries, high-quality infrastructure, strong support systems for the vulnerable – these all rest on our ability to nurture the talents of the population and give people and communities opportunities to thrive,” the report said.
“Where people’s career pathways are limited by socioeconomic background, we miss out on potential gains to productivity and growth.”
The report says international evidence suggests countries with more social mobility, such as Sweden, Austria and Denmark have greater productivity, and that apprenticeships could be a “a great vehicle” for improving social mobility in the UK, but “this potential is not being realised”.
Sarah Atkinson, chief executive of the Social Mobility Foundation, said the situation was so acute that “professionals from working-class backgrounds were earning £6,000 a year less” than more privileged peers. She said “simple things” businesses could do included scrapping unpaid internships and mentoring “first generation professionals”.
She said: “There’s quite well-established research that says class has the biggest impact on its own, but if you are from a minoritised ethnic group and a lower socioeconomic background, or if you are a woman and from a lower socioeconomic background, there’s a double disadvantage.”
