Details of how people from lower socioeconomic backgrounds are far less likely to earn good incomes are explained in a recent Co-op/Demos report.
A report produced by the Demos and Co-op has revealed that the UK loses £19bn a year due to a lack of social mobility.
The Social Mobility Commission, a government advisory agency, 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 explains how people from “lower socioeconomic backgrounds” in the United Kingdom are “far less likely to earn good incomes, even after accounting for levels of education”. Out of 82 countries, the World Economic Forum’s Global Social Mobility Index 2020 ranks the UK 21st.
The researchers stated that the UK was losing a GDP growth of £19bn a year because of a “systematic failure” to promote social mobility. A survey of 531 senior business leaders revealed that promoting social mobility was linked to higher turnover.
The co-op, in charge of retail, insurance, and funeral businesses, has removed the requirements for CV and video interviews from social mobilities policies. It also began reporting its socioeconomic status earlier this year. The business social mobility taskforce includes Azra Keely, from Manchester, a refugee from Bosnia, who came to the UK 3 years ago.
She told the media: “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, making it less accessible for those from lower-income backgrounds.
The report by Co-op and Demos titled The Opportunity Effect makes a series of suggestions to the government and business. Some suggestions include giving the new body Skills England, which intends to boost growth by assisting people get better jobs, a “statutory responsibility” to increase social mobility.
The report calls on the government to consult large employers on increasing their minimum skills and training expenditure to meet the EU average of £3,000 per worker. It advocates for the government to consult on expanding the pay gap reporting to socio-economic as well as ethnic minority and disability gaps.
It also urges the government to create a “Better Opportunities Fund” to fund social mobility projects, provide lower business rates for social enterprises and cooperatives, and ensure social mobility is “factored into public sector procurement”.
The report states: “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.”
“Where people’s career pathways are limited by socioeconomic background, we miss out on potential gains to productivity and growth.”
According to the report, international evidence suggests that countries with more social mobility, like Denmark, Austria, and Sweden, have greater productivity. It also states that apprenticeship could be “a great vehicle” for improving social mobility in the United Kingdom; however, “this potential is not being realised”.
The Social Mobility Foundation chief executive, Sarah Atkinson, stated that the situation was so acute that “professionals from working-class backgrounds were earning £6,000 a year less” than their privileged colleagues. Atkinson said “simple things” businesses could do included scrapping unpaid internships and mentoring “first generation professionals”.
She added: “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.”
