What is the Class Pay Gap? Social mobility statistics for 2024

We explain what the Class Pay Gap is, what’s causing it, and how your business can lead the charge to address it.

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Written and reviewed by:
Helena Young

Most of us are clued into the gender pay gap and its impact on women earners. But another, largely unacknowledged pay difference that persists in workplaces is the Class Pay Gap.

To quote George Orwell, “England is the most class-ridden country under the sun”. Brits are obsessed with defining a person by their social background, and that bias has led to working class people receiving lower salaries and fewer opportunities than more privileged peers.

Below, we’ll combine payroll data and official statistics to paint the full picture of the Class Pay Gap, including its causes and impact on social mobility. We’ll also provide actionable steps for employers looking to close their own pay gap and create an equitable workplace.

The Class Pay Gap in 2024

Unlike the gender pay gap, employers are not obliged to report on how much average earnings differ between employees from different social backgrounds.

However, various third-parties have published their own reports into the issue; the most compelling of which is the State of the Nation 2023 report, published by the Social Mobility Commission. The study offers an annual insight into the UK’s social mobility rate (defined as a person’s ability to change their socio-economic status).

According to the findings, those from higher professional backgrounds earn 18% more than those from a lower working class background, even with the same level of education. This is considerably higher than the current gender pay gap, which stands at 9.1% in 2024.

Likely, this figure is skewed by the inclusion of upper class employees. This group includes aristocrats with inherited income, and is not an accurate representation of the UK workforce.

Instead, the 2023 Social Mobility Employer Index, published by the Social Mobility Foundation (SMF), compares the difference in pay between employees from working class and middle class (referred to as professional-managerial) groups* from 2014 to 2022.

Using data from the Labour Force Survey, it puts the Class Pay Gap at 12%, with those from poorer backgrounds earning, on average, £6,291 less than professional-managerial workers.

*Class groups are based on household occupation, as recommended by the Social Mobility Commission.

The Class Pay Gap by gender and ethnicity

The Social Mobility Employer Index also explores how gender and race biases intersect with social background to impact employability.

The findings suggest that working class women are at a double disadvantage, as they earn 16.1% below the average for all social grades.

On average, women from a professional-managerial origin outearn poorer women by £7,042. This is compared to a Class Pay Gap of £6,350 among male employees (or 11.9%).

GenderAvg salary of all workers in Class 1 occupations*Class Pay Gap in group% below average

Source: https://www.socialmobility.org.uk/campaign/the-class-pay-gap-2023

Ethnicity and the Class Pay Gap

Data has shown that an ethnicity pay gap persists across the UK workforce. White staff members typically earn more than Black British workers, but less than Asian employees.

When it comes to different ethnic groups, the Class Pay Gap is most pronounced among White workers, where working class employees will earn 13.01% below the average for all social grades. Chinese employees had the smallest Class Pay Gap.

However, regardless of socio-economic standing, average earnings for White employees remain higher overall than for Black Caribbean and African, Pakistani, and Bangladeshi workers. This reflects the wider ethnicity pay gap evident in the UK workforce.

EthnicityAvg salary of Class 1 occupations*Class Pay Gap% below average
Black Caribbean£41,148-£3,935-9.56%
Black African£45,618£2,797-6.13%

Source: https://www.socialmobility.org.uk/campaign/the-class-pay-gap-2023

*Class 1 occupations are defined as office-type work

Which industries and jobs have the widest Class Pay Gaps?

In the UK, the Class Pay Gap is noticeably more pronounced within the private sector, which employs roughly 82% of the UK workforce.

According to the Social Mobility Index 2023, company employees from working class backgrounds are paid £7,575 less per year than those from professional-managerial origins. In the public sector, the pay gap falls to £4,750 per year.

Let’s dig into the data and find out which industries in the private sector exhibit the widest Class Pay Gaps:

  • Marketing

Marketing Week’s 2024 Salary survey found working class employees in the sector earn 15.9% less, on average, than privileged peers. The figure has dropped by 2.3 percentage points since 2022, but is 3.9% above the 12% overall pay gap identified in the Social Mobility Index.

  • Media

You’ll be hard-pressed to find a regional accent on UK news channels, and there’s a reason why. According to the NCTJ’s 2023 Diversity in Journalism report, 72% of journalists come from professional and upper class backgrounds, compared to 44% in the whole of the UK.

  • Finance

Finance has a reputation for being an elitist sector, and statistics from the SMF reveal that there’s some truth to the theory. In 2022, their report found that finance managers from working class families are paid £11,427 less, while accountants have a gap of more than £8,000.

  • Chief Executives

Even when employers are paying themselves, a significant Class Pay Gap exists – the largest of any role explored by the SMF, in fact. CEO salaries for people from working class backgrounds are shown to be £16,749 less than their peers’.

  • Law

Magic circle law firm Clifford Chance publicly shared its Class Pay Gap statistics in 2022. The report showed a 44.1% pay gap between working class and middle class staff members (although, as this is just one company’s payroll, the findings must be taken with a pinch of salt).

Why does the Class Pay Gap exist?

The Class Pay Gap is not just income inequality. Naturally, some staff members take home more than their colleagues because they have more qualifications or experience.

Instead, the pay gap refers to people facing class-based barriers for entry into top jobs, which results in fewer working class people working in high-paid, authoritative positions.

It is hard to pin down what causes these barriers, as the evidence is rarely effable. Here are seven disadvantages that working class people are more likely to experience, and how they might impact a person’s career progression:

1. University bias

Graduating from university has traditionally been seen as the most important qualification for job listings, above soft skills and relevant work experience. Even today, some companies still require candidates to have attended a Russell Group (the UK’s leading universities).

Working class people are less likely to attend a top university, so stipulating a degree automatically means their CVs are less likely to make it onto a recruiter’s desk.

In a report from social mobility startup Zero Gravity, Russell Group graduates were found to account for 49% of employees in the creative arts and 81% in the legal sector, despite Russell Group institutions only educating 6% of the total population.

2. Home advantage

Because university was once almost exclusively attended by the middle class, many working class people who go on to higher education will be among the first in their family to do so. This could injure their chances of making a successful entry.

Indeed, the Zero Gravity report shows 64% of middle class students say their family has the knowledge to assist them with an application, compared to 43% of working class students.

3. Reduced access to networks

It’s who you know, not what. Many jobs and opportunities come from nepotistic ties, especially in gig economies such as the creative industry. But when certain sectors are dominated by middle class employees, it is harder for working class people to break in.

This leads to the class divide becoming a self-perpetuating cycle. Until one person gets a foot in the door, working class communities aren’t able to give each other job opportunities.

4. Private school

It’s no surprise that very few working class people attend fee-paying schools. Naturally, these institutions have access to greater funds than state schools, which means they tend to offer better-quality resources and a higher standard of teaching.

As a result, private school pupils are twice as likely to achieve top grades as state-educated pupils, according to official figures. This will push their CVs ahead of less privileged candidates’.

Exclusion from private education also means that working class students miss out on connections with elite networks. Zero Gravity’s report shows that privately-educated students are 18% more likely to attend university to ‘improve their professional network of contacts’ than state school students.

5. London living costs

The capital is the most expensive city in the UK to live and work in. For sectors with big Class Pay Gaps, such as media, it’s also where most of the jobs are. It’s no wonder the number of working class people in the film and TV industry is at its lowest level in a decade.

Given that many entry-level jobs pay poorly, students who lack a strong financial safety net and cannot afford to pay for sky-high London living costs will miss out on these and other career building blocks, like internships and work placements.

6. Cultural ‘matching’

Hirers will often judge a new recruit based on how well they ‘fit’ with the organisational culture. But if a profession is dominated by middle class employees, that culture will often be defined by one group’s preferred set of codes and behaviours.

As a result, interviewers often favour applicants who look, sound, and act like them. For example, researchers from the University of Queensland in Brisbane found that interviewers are less likely to hire someone if they don’t recognise their accent.

7. Lack of self-confidence

All of the above takes a huge psychological toll on people from lower social grades, flattening their self-confidence. This could then mean they feel less welcome and eager to apply for certain professions or promotions; worsening the Class Pay Gap.

Polling by the SMF shows that the Class Pay Gap has put 72% of young people off applying for a job in elite (exclusive) professions, such as law and finance.

How can employers close the Class Pay Gap?

We often think of diversity in the workplace in terms of protected characteristics, like race and gender. But class discrimination is an oft-forgotten issue that can have big repercussions in the workforce – for starters, by unintentionally creating a Class Pay Gap.

To achieve class inclusivity and pay equity, organisations must take steps to close their pay gap and make their workplace more accessible to those from lower socio-economic backgrounds. Here are four small changes you can make to get started right now:

1. Collect payroll data

Understanding the scope of the Class Pay Gap in your organisation is the first step to addressing it. Conduct a pay review, and analyse payroll software data, to produce a pay gap report that records and monitors how the earnings of employees from different social grades might differ.

Sharing this information publicly is not about naming and shaming your own company, but about holding yourself – and rival firms – accountable for change.

2. Expand your hiring drive

When you are hiring for a role, think about how you might be attracting candidates. Do you ask current employees to recommend a friend? This might be inadvertently pushing out people who don’t have existing industry connections to rely on.

Make sure you are advertising your positions in as broad a way as possible. For example, don’t just post an ad on your LinkedIn page for your existing network to see; share it on jobs websites or even TikTok as well.

3. Update your recruitment process

During the recruitment process, think about how your job ads might be discouraging people from applying. Avoid insider jargon, and consider eliminating degree requirements (unless they’re necessary for the role).

Utilise a structured approach to interviews that standardises the process among candidates, eliminating room for bias. Think about using assessment criteria away from the basic Q&A format, such as presentations or skills-based tests.

4. Review employee appraisal processes

According to a well-known business parable, because more businessmen than women play golf (and because more men are in leadership positions), male employees are more easily able to schmooze their boss on the golf course, speeding up promotions and pay rises.

This is an example of how cultural ‘matches’ can translate into unfair rewards for staff who fit in, and empty air for those who don’t. As evidence, studies in the US have found that women are 12% less likely to be represented in the C-Suite when their CEO plays golf.

Having regular and scheduled performance reviews will ensure that all workers are being appropriately rewarded for their efforts, and not just for knowing how to swing a golf club.

Social mobility: are we moving forwards?

About now, I would drum up a rousing conclusion discussing the progress that companies are making to close the Class Pay Gap, and the steps still required to cross the finish line.

Sadly, however, the British class system looks more ingrained than ever. According to the Institute for Fiscal Studies (IFS), UK social mobility is now at its worst in over 50 years. Socio-economic status is still not recognised under the Equality Act 2010, and the number of large employers reporting on the Class Pay Gap hovers at 200 (compared to 10,000 for the gender pay gap).

Plus, in the CIPD’s Inclusion at Work survey, just 9% of employers said they had focused on improving class inclusivity in the past five years.

Still, employers are recognising that social grade is a diversity characteristic, and momentum is beginning to build. Mandatory Class Pay Gap reporting, while not imminent, is becoming more widely discussed; spurred by the impact of the Gender Pay Gap legislation.

This would likely trigger organisations to start taking regular, collective action against the Class Pay Gap. All it needs is for one, bold business to make that crucial first step, and lead the process of levelling up the UK workforce.

Written by:
Helena Young
Helena is Lead Writer at Startups. As resident people and premises expert, she's an authority on topics such as business energy, office and coworking spaces, and project management software. With a background in PR and marketing, Helena also manages the Startups 100 Index and is passionate about giving early-stage startups a platform to boost their brands. From interviewing Wetherspoon's boss Tim Martin to spotting data-led working from home trends, her insight has been featured by major trade publications including the ICAEW, and news outlets like the BBC, ITV News, Daily Express, and HuffPost UK.

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