The Class Pay Gap

Magic circle law firm Clifford Chance made public their ‘class pay gap’ for the first time this month. This showed a 44.1% average difference in pay between staff from a ‘working class’* background compared to those with a more privileged upbringing.

While it is now a legal requirement for employers with more than 250 employees to report on their gender pay gap, it is not a requirement for companies to report on ethnicity and social class. It is therefore fantastic to see companies such as Clifford Chance and PWC taking a lead in both collecting and reporting on this data. Indeed, this overlaps with one of the key actions we called on employers to take as part of The Brokerage’s ‘Opening Doors’ manifesto for a fair and inclusive recovery, published last year. In that report we called on companies to collect data and map how inclusive their culture currently is and commit to tracking this with clear KPIs.

However, these snippets of data only present half the picture and I hope that in the near future we will also see companies looking at this data in more detail. Society is complex and people do not just have a class background, separate from their gender and ethnicity. We know for example that a black woman from a working class background will have an even larger combined pay gap on average than a black woman from a more privileged background. These different factors intersect with each other and it is not always helpful to think of them as separate.

On any article related to pay data you’ll also often find a similar theme to the arguments happening below the line, in the comment section. I know one should never read the comments, but on this occasion I have and I wanted to address a line of argument that often appears — which is to say that it is not a surprise that these gaps exist because of course there are more white men from privileged backgrounds in senior professional roles (and in receipt of the higher remuneration that is attached to those positions). The implication here is that these pay gaps are fine, because either people who are not white men whose parents also worked in professional jobs choose not to take on senior roles or, rather more unpleasantly, that they are not fit to do them.

I am sure I do not need to waste time making arguments about whether having a particular class background, gender or ethnicity would make someone more or less suited to succeed in a senior professional role. However, as to the idea that people from particular backgrounds choose not to follow these career paths, I would be happy to introduce anyone to any one of our Candidates here at The Brokerage (currently we have 2,000 young people registered with us). They are all what might be termed ‘working class’ (whether measured by parental job, parental educational level or eligibility for free school meals), the vast majority are from black or ethnic minority backgrounds and a slight majority are women. On average they achieve the equivalent of ABB at A level, and 54% of The Brokerage Candidates go on to attend a Russell Group university, (compared to just 25% of all state school candidates). All of them have chosen to work with The Brokerage specifically because they aim to access professional fields, and with 25 years of experience we can say for certain that they have both the desire and ability to do so.

The reality is that evidence of pay gaps tell us nothing about employees. Instead, it tells us a lot about companies, industries and wider society. If a company’s pay is not roughly equal across factors like class, gender and ethnicity it means something is amiss, something is stopping everyone from having an opportunity to access these higher paid roles. What is happening is, in effect, tacit positive discrimination in favour of one group rather than recruitment, promotion and remuneration based on merit. Taken holistically, if remuneration were purely based on merit, you would expect class, gender and ethnicity not to be factors.

This is where the actions you take as a result of collecting and reporting on the data comes in. In the full Clifford Chance pay gap report they present the data, acknowledge that they will have to work hard to improve things, and talk about the many initiatives they are running to do this. Although Clifford Chance is not currently one of our corporate partners, we work with a number of businesses to look at and tackle precisely these issues; by working together to open doors for working class young people and challenge the corporate norms that are unfairly disadvantaging them.

We know that a lot of corporates are keen to improve diversity and inclusion at every level of their business, some even have internal targets around this, but often they don’t always know where to start. One important step they need to take is to identify future leaders from working class and racially minoritised backgrounds. To this end, The Brokerage has recently established a Leadership Development Fund, that aims to grow a pipeline of talented young people that are on the path to take on senior leadership roles. We’re currently seeking corporate donations for this fund so we can extend the number of future leaders we can reach, please get in touch with our Senior Partnerships Manager, Susheel Padda, susheel.padda@thebrokerage.org.uk to find out more about the fund and how you can support.

In ten years I hope to see that as a result of this fund and our wider work with corporates and young people, pay gaps will start to significantly shrink, as organisations become more inclusive. But in the short term, my hope is that more companies will follow the lead of Clifford Chance and it will start to become the norm to both publish class pay gap data and more importantly, to make use of it, to ensure they are not accidentally underpaying or excluding the best talent, just because of their background.

*According to Legal Cheek, the online trade publication, Clifford Chance made use of the Social Mobility Commissions recommended question on social mobility, asking their staff what job their highest earning parent did when they were 14. I’ve previously written about this question, which The Brokerage uses as one of our eligibility criteria when recruiting candidates. It isn’t a perfect measure — there’s no such thing — but it is the best and most practical one we have to determine if someone is or is not from a working class background.