In this piece, Dr Marcos González Hernando, UCL, and Dr Gerry Mitchell, independent consultant, discuss the social mobility challenges the UK faces and potential solutions for addressing them.
The complaints and insecurities of the relatively well-off should not be taken lightly
The idea that children should be better off than their parents has stopped sounding convincing, even to the well off. While in the US almost all those born in the 1940s earned more than their parents at the same age, those who turned 30 in 2010 only had a 50/50 chance. This decline is true across the distribution, but largest for the middle class.
The UK is no different. Over half those in elite occupations have parents who also had elite occupations. However, it’s also true that many children of the professional-managerial class don’t end up at the same level in the socioeconomic ladder.
Moreover, while few agree on where a ‘riches line’ is, the disparities at the top are extreme. Given that, those just below the unambiguously well off are interesting to observe. Those earning a top 5% income (£82,200), or even 3% (£104,000), are further away from someone on a top 1% income (£183,000) than they are from the median earner (around £30,000). Hence why many high earners, while admitting they are privileged, claim they feel “miles away from the very rich.”
The high earners we interviewed for our book Uncomfortably Off were anxious that work is paying less and that middle class jobs are disappearing. They were frustrated they still had mortgage payments at an age their parents had paid off theirs. Yet, despite their struggles maintaining the extrinsic markers of a ‘successful’ life, they still told us that education and hard work are the predominant route to ‘success’.
Working with colleagues with similar incomes and living in highly segregated areas, few high earners knew where they stood in the income distribution. From their vantage point, Britain looks much less unequal than it is. Most believe any achievements are mostly down to the individual. It follows that if they don’t achieve them, they have only themselves to blame. Paradoxically, their decision to use private schooling makes sense from their mostly meritocratic ethos, which values education as a route to ‘good jobs’ and money as a marker of effort and worth. This is the origin of the recent petition by struggling ‘hard working parents’ against the proposal to add VAT to private school fees.
The responses to this petition are also understandable. Its supporters “chime in to protest just how wealthy they aren’t” while people on lower incomes resent it, pointing out that they couldn’t even entertain the thought of sending their children to a private school (only 6-7% of the population do).
When asked, most high earners we interviewed talked about their concerns over healthcare, crime, declining social cohesion, and poor educational outcomes – all of which are worse in more unequal countries. Yet, they rarely questioned their causes or support redistributive policies that would start addressing these issues. As the truism goes, the British have long expected European quality public services for American rates of taxation.
This is partly because high earners rarely think of themselves as beneficiaries of public services. Therefore, to them tax is mostly a burden. After over a decade of austerity, they’ll increasingly go private if they can afford it. Some acknowledge that university grants and other public policies supported their upward trajectory, yet believe they were mostly secondary compared to their hard work and talent.
High earners are politically significant: they are more likely to vote and the policies they support tend to be implemented. Focused on trying to secure their own position, most of them have no bandwidth to ponder why our economic structures are not working. Rather, they double down on strategies that have worked for them until now.
Polling suggests that Gens Y and Z have no memory of the post-war welfare state, to the point that they no longer consider relying on public goods, such as social housing, a viable alternative. They have experienced little other than the inflationary, low-welfare, asset-bubble prone context of the last decades. It’s therefore unsurprising that the promise that our children will do better than ourselves sounds unconvincing.
Providing the electorate the facts is not enough. They can be found everywhere, whether on downward mobility, extreme inequality, stagnating wages, low productivity, declining living standards, lowered life expectancy and relatively low investment in public goods. Multiple authorities, including the IMF, have said the UK needs much more investment.
Addressing the common sense seems unlikely to work in the short term either, hardwired as it is. It is best described as rooted in a fear of falling, loss aversion, and a worldview that simply doesn’t pan out anymore. Nevertheless, aspects of that common sense can be redirected. The Resolution Foundation has shown that “household wealth has risen from three to over seven times national income since the 1980s, while poorly designed wealth taxes have not risen at all as a share of GDP.” Ahead of GE24, there’s a consensus that the tax burden cannot continue to fall on employees and overwhelming support for taxing wealth.
The fears of high-income earners are legitimate. We have, after all, created a society in which even they feel insecure. The answer, however, shouldn’t be to help them seek private solutions but to invest in public goods. They benefit from a welfare system that maintains the social fabric and a system that doesn’t prioritise owning over working. The top 1% may be ok in highly unequal societies, but not necessarily the top 10%.
As things stand, the meritocracy myth has run its course. Not even the children of high earners are doing better than their parents did, and if they do it’s unlikely to be because of how hard they work. It has been replaced by inheritocracy. Our economy is even making an increasing number near the top of the income ladder feel insecure. Further mass downward mobility may affect political change. However, in a world of AI, globalised labour markets, and the gig economy, the plummeting power of labour and value of education may come instead with disenfranchisement. If nothing is done, and soon, in the words of Piketty, the future will be completely devoured by capital.
About the authors
Dr Marcos González Hernando is Honorary Research Fellow at UCL Social Research Institute, Postdoctoral Researcher at Universidad Diego Portales and Adjunct Researcher at the Centre for the Study of Conflict and Social Cohesion. He is also a Fellow of the Royal Society of Arts and has a PhD in sociology from the University of Cambridge. Marcos has experience working in universities and think tanks, both in Latin America and Europe. His research interests include think tanks and policy experts, intellectual change, attitudes towards inequality, and economic and political elites. He is also the author of British Think Tanks after the 2008 Global Financial Crisis (Palgrave, 2019). He recently moved to Santiago, Chile, where he lives with his wife, Irina, and his cat, Lily.
Dr Gerry Mitchell is a freelance policy researcher and writer. Experienced in research, political campaigning, community engagement and teaching, she has degrees from Cambridge and the London School of Economics and Political Science where, based in the Centre for Social Exclusion, she completed a PhD in social policy. She has recently worked with the Think-tank for Action on Social Change (Dublin); the Foundation for European Progressive Studies (Brussels); the Edinburgh Voluntary Organisations’ Council; Friedrich-Ebert- Stiftung (Stockholm and London) and Compass (London).
Image credit: Lance Grandahl, Unsplash