The UK economy is losing £19 billion annually due to limited social mobility, according to a report by the thinktank Demos and the Co-op. Social mobility, defined by the Social Mobility Commission as the connection between a person’s income and their parents’ economic status, remains low in the UK, which ranks 21st on the Global Social Mobility Index.
The Co-op/Demos report highlights that individuals from lower socioeconomic backgrounds struggle to achieve high incomes even with similar education levels, representing a “systemic failure” in promoting social mobility. Researchers surveyed 531 senior business leaders and found a link between social mobility initiatives and increased business turnover, emphasizing the economic benefits of social mobility.
In its commitment to fostering social mobility, the Co-op has eliminated video interviews and CV requirements and launched socioeconomic pay gap reporting. The Co-op’s social mobility taskforce includes individuals like Azra Keely, who advocates for more accessible higher education and affordable housing as critical factors in improving social mobility.
The report, The Opportunity Effect, outlines key recommendations for government and business. It suggests that Skills England should be granted statutory responsibility to enhance social mobility and calls on large employers to invest in employee skills at the EU average of £3,000 per employee. Additional recommendations include introducing a “Better Opportunities Fund” to support social mobility initiatives and providing lower business rates for social enterprises and cooperatives.
The report stresses the societal value of expanding opportunities, linking social mobility to increased productivity, innovation, and growth. It references international examples, noting that countries with higher social mobility, such as Sweden and Denmark, enjoy greater productivity.
Sarah Atkinson, CEO of the Social Mobility Foundation, highlighted the significant pay gap faced by professionals from working-class backgrounds, who earn £6,000 less than peers from privileged backgrounds. Atkinson calls for businesses to eliminate unpaid internships and offer mentoring programs for first-generation professionals, noting that individuals from marginalized ethnic groups or lower socioeconomic backgrounds often face “double disadvantages.”
