People’s incomes in Britain are still too dependent on parental wealth

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The UK’s poor track record of social mobility means that people’s life chances are too dependent on their parents’ income, rather than their own education and ability, says the TUC as it publishes a new report on social mobility today (Tuesday).

The TUC report warns that the UK has the joint highest level of earnings persistence – the extent to which people’s incomes are associated with those of their parents – amongst advanced economies, along with Italy.

It also warns that the price poor people pay for a lack of social mobility is getting worse in Britain as the income gap between the richest and poorest households has widened over the last three decades.

Dismantling the Barriers to Social Mobility says that while all mainstream political parties agree on the need to tackle the barriers to social mobility, their proposals to tackle it vary wildly, from deregulation and lower taxes to free school meals and a stronger social security safety net.

The report analyses the UK’s track record on seven key factors influencing social mobility and compares its performance to that of other advanced economies. It highlights four factors – income inequality, childhood poverty, full-time women’s employment and the link between family background and educational performance – where the UK lags behind most other advanced economies and suggests that political parties should prioritise these issues in order to make genuine inroads into encouraging greater social mobility.

In particular, the TUC would like to see more done to increase full-time maternal employment rates through high quality flexible working and affordable childcare. This would also tackle many of the other barriers to social mobility, such as child poverty and pre-tax income inequality.

At the same time, employers and government need to do more to reduce the pay and career penalties associated with part-time work. With over six million part-time workers, the UK has one of the highest rates of part-time employment among advanced economies and research shows that this can limit children’s life chances, says the TUC.

TUC General Secretary Frances O’Grady said: “People’s incomes in Britain are more influenced by their parents’ wealth than in any other advanced country.

“This lack of social mobility holds millions of people back and means that they don’t get a fair share of the benefits of a growing economy, such as decent pay and educational opportunities. Worse still, rising inequality means that the price people pay for a lack of social mobility is getter bigger.

“But while few people in this country would argue against social mobility, successive governments have a poor track record of tackling it. When it comes to income inequality and full-time employment rates for mothers, the UK is ranked well below our global competitors.

“Raising the full-time employment rates for mothers is an important way to boost social mobility and one we’d like all political parties to commit too. But with over six million people working part-time in Britain time we also need to tackle the pay and career penalties faced by those who want – or need – to work shorter hours.”

NOTES TO EDITORS:

Factor influencing social mobility

UK performance

Source

Income inequality

Ranked 29th out of the 34 OECD countries – well below the OECD average

Society at a glance 2011: OECD Social Indicators http://www.oecd.org/els/soc/societyataglance2011-oecdsocialindicators.htm  

Child poverty

Ranked 14th out of 29 countries by Unicef in a chart comparing the proportion of children falling below 50 per cent of median income

UNICEF Report Card 11: Child wellbeing in rich countries (2013) www.unicef.org.uk/Latest/Publications/Report-Card-11-Child-well-being-in-rich-countries/

Educational expenditure

Ranked 9th in terms of per capita spending in OECD countries – well above the OECD average

Society at a glance 2011: OECD Social Indicators

Return to third-level education

Ranked 5th out of 21 OECD nations for gross earnings premiums for third-level qualifications

R Boarini and H Strauss (2007), The Private Internal Rates of Return to Tertiary Education: New estimates for 21 OECD Countries, OECD Economics Department

Working Papers, No 591, OECD Publishing

Women’s full-time employment

Ranked 21st out of 26 wealthy OECD nations

OECD employment database Available here: http://www.oecd.org/employment/emp/onlineoecdemploymentdatabase.htm

Post-tax earnings inequality

Ranked 9th out of 26 wealthy nations

Checchi (2010) plus US data from World Bank Development Group 2013

Educational inequality

Exactly at the average when looking at the proportion of variance in student performance explained by students’ socio-economic background.

PISA 2009 Results: Overcoming Social Background: Equity in Learning Opportunities and Outcomes (Volume II)

Dismantling the Barriers to Social Mobility is available at www.tuc.org.uk/sites/default/files/Social_Mobility_Touchstone_Extra.pdf

- All TUC press releases can be found at www.tuc.org.uk

- Follow the TUC on Twitter: @tucnews

Contacts:

Media enquiries:
Liz Chinchen   T: 020 7467 1248    M: 07778 158175    E: [email protected]
Rob Holdsworth    T: 020 7467 1372    M: 07717 531150     E: [email protected]

Elly Gibson   T: 020 7467 1337    M: 07900 910624     E: [email protected]

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