Earlier this week, the government’s Social Mobility Commission released its annual State of the Nation report, the pessimistic conclusions of which have already drawn the attention of the press. Positing that Britain’s already deeply entrenched social mobility problem has only been getting worse following the financial crisis, the report questions whether the expectation that children would do better than their parents is a dated, or a little bit too ‘20th century’.
While there has been no shortage of analysis in recent months around the underlying causes of particular voting patterns or national divisions along socio-economic and attitudinal lines, looking at the evolution of social mobility is perhaps a more solid indicator of how the conditions of widening inequality were created in the first place.
According to OECD calculations in 2015, Britain had one of the worst social mobility scores in the Western world: 0.50. This means that for every British adult earning 10,000€ less income than average, their children will earn 5,000€ less than average (while in countries like Denmark, the number will be about 1,500€ less than average, and in Germany around 2,800€ less than the average).
Trajectory’s work on the topic of domestic fragmentation has previously highlighted the increasingly multi-speed nature of economic growth across different pockets of the country, with factors from the availability of superfast broadband to life expectancy differing widely.
But replace tech and life expectancy with just about anything else, and the picture looks pretty similar for the whole nation – clusters of prosperity in urban areas (concentrated in London and the South-East) with many rural towns and villages left behind (not just in the North).
For instance, there just under 17 million people who aren’t able to put money away each month, but while the proportion is as high as 57% in Northern Ireland or 55% in the West Midlands, in the South-East it is less than a third of the population.
Similarly, the share of professional/managerial jobs in each UK region also paints a picture of a fragmented nation.
However, while growth in the service sector following the decline of traditional industry has indeed provided many people with employment, this has also acted as a catalyst for locking some into a lifetime of low pay. Add to this the proliferation of ‘gig economy’ workers and continued use of zero hour contracts, and it is easy to see why for many (especially young) people, the experience of precarious, low-paid employment is not a temporary one.
While a million more people have become self-employed since the global economic downturn, a study carried out by the McKinsey Global Institute showed that independent workers in the UK were fragmented too – there are the free agents (those who choose to work independently) and the casual earners (those who use freelance/’gig economy’ work to make money on the side), who make up about three quarters of this segment. The remaining four million however, are split between the ‘reluctants’ (those who work independently but would rather not) and those who are financially strapped and have no choice but to accept insecure employment. It is unlikely this type of employment will simply fade into the background in the near future – in fact, a report on flexible working suggests that the number of UK workers engaged in the ‘gig economy’ could easily overtake the number of public sector employees before the end of the decade. This is the unmistakable rise of the Precariat – an insecure class of often highly qualified workers who find themselves with no economic security and limited opportunities for progress.
Then there are the matters of housing and education, where one’s geographical location, in addition to their parental background, may well determine how they do in life.
While almost a million more families with children rent privately than a decade ago, they also have to cover significantly higher housing costs than those who own their own homes.
What might this mean for social mobility? For those of us who have worse career prospects than our parents, the chart of average housing costs as a share of income for those born in the 1940s and 50s almost seems like science fiction:
Although the report focuses on five key areas, the factors that contribute to shaping the socio-economic positions of individuals are much more diverse and will also be dependent on factors like labour markets or welfare and health policies.
However, given the uncertain economic climate at the moment, unless acute areas of need aren’t tackled in a way that goes beyond already existing targets, limited social mobility will likely be accelerated in the near future. The impacts of this will extend far beyond any short-term economic cycles, causing profound impacts for individuals, organisations and policy makers for generations.