Class pay gap: Working-class professionals paid 12% less

by Personnel Today

That means Class Pay Gap Day – the date when working-class professionals effectively stop being paid – falls on 17 November this year. Millions of people from working-class backgrounds continue to work the equivalent of one in every eight days without pay.

The Social Mobility Foundation is urging the Government to introduce mandatory class pay gap reporting in a bid to unlock growth and break down barriers to entering the workforce.

Firms of more than 250 employees are already required to publish their gender pay gap and the draft Equality (Race and Disability) Bill, announced earlier this year, will introduce mandatory ethnicity and disability pay gap reporting.

Under the Social Mobility Foundation’s proposals, large employers would also be required to collect and report data on the socioeconomic background of their staff.

Of the organisations in the Social Mobility Foundation’s 2024 Employer Index, 26 already measure their class pay gaps, including Co-op, the first retailer to do so, and PwC.

The Social Mobility Foundation’s research, completed in partnership with Co-op, found that professional women from working-class backgrounds are hit with a double disadvantage. There is a Class Pay Gap of £6,855 between women from working-class and professional-managerial origins in the same occupation.

The class pay gap is even more pronounced in the private sector, which currently employs 82% of the UK workforce.

Professionals from working-class backgrounds in these roles are paid £7,774 less annually than those from professional-managerial origins.

Separate polling conducted for the Social Mobility Foundation revealed that three in four young people believe employers should report on their class pay gap.

Nearly half of those from lower socioeconomic backgrounds said the pay gap has put them off applying for jobs in ‘elite’ professions such as law and finance, while four in 10 young people from lower socioeconomic backgrounds said they had felt discriminated against for their class or background.

Sarah Atkinson, CEO of the Social Mobility Foundation, said: “In 2024 it still pays to be privileged. Even when people from working-class backgrounds break into professional occupations, they’re paid some £6,000 less a year than their more privileged counterparts. Failing to reward working-class staff properly isn’t just unfair; it’s bad for business. Employers risk missing out on top talent with diverse perspectives, leading to weaker decision-making and lower productivity.

“We’ve seen the positive impact gender pay gap reporting has had. Now we need the same commitment to tackling class barriers in the workplace.”

Claire Costello, chief people and inclusion officer at Co-op, said: “At Co-op, we know that socioeconomic background still has a big impact on pay and career progression, yet it’s often an overlooked issue. We’re proud to be the first retailer to publish our socioeconomic pay gap this year – it gave us a real picture of where we stand as a business and where we need to do better, and we’re committed to making that change.

“Making sure that everyone can succeed, no matter their background, is simply the right thing to do for our communities and our members. The Government’s steps toward activating the socioeconomic duty in the Equality Act are promising, and we encourage them, alongside other businesses, to go further by making socioeconomic pay gap reporting the norm. This is how we create real, lasting change.”

Each year, the Social Mobility Foundation releases its Social Mobility Employer Index, a benchmarking tool that ranks Britain’s employers based on their efforts to enhance social mobility in the workplace. Professional services firm PwC topped the ranking for the second year running in 2024, sharing the top spot with law firm Browne Jacobson.

Marco Amitrano, senior partner of PwC UK, said: “We know that talent is everywhere, but opportunity is not. Too many people are at a disadvantage because of where they grew up, where they went to school or what their parents did for a living. That’s not right, and as a leading employer in the UK, we have a responsibility to do something about it.