Economics, politics and the reality of the 'squeezed middle'


Want to earn your way up?

Fine – just don’t be a woman, live outside of London, or work part-time.

Who earns their way up in today's Britain? Recent work suggests the story of mobility is not all doom and gloom. It showed a significant rise in overall earnings mobility in the 2000s compared to the 1990s, admittedly starting from a low base. More people are now climbing the earnings ladder in their own lifetime, which of course means that more people are falling down too.

But who benefited from this from increased mobility - who went up, who slid down and who got stuck? Given the constant preoccupation of the entire political class with the notion of social mobility, it's rather surprising that until now none of them could answer these questions. Now new research allows us to fill this gap, and in doing so it tells us some important things about the character of contemporary Britain.

The study tracks a large number of people who were in their thirties through the 1990s and examines what happened to their earnings compared to another group who were in their thirties during the 2000s. It allows us to consider how people have fared according to their gender, occupation, working patterns, region, and education levels. The results are telling not least because the thirties tend to be a decisive decade in determining someone's career prospects and lifetime earnings.

So what are the findings? Some jump off the page. Women are almost 40 per cent more likely than men to fall down the earnings ladder; and that's after taking account of their education levels, occupation, and whether they work full or part-time (though note this is a slight improvement compared to the 1990s). This finding holds up even for women who didn't have children during the decade in question. It tells a rather different story to that recently offered by David Willetts, who suggested that Britain needs to grapple with the consequences of women hoarding greater opportunity in society at the expense of working class men.

Those who worked part-time for the whole decade are much more likely to fall down the earnings ladder - nearly 90 per cent more so - compared to full-timers, a finding that had strengthened in the 2000s compared to the 1990s. That said, the penalty for moving from full-time work to part-time work appears to have diminished, perhaps suggesting the gradual growth of higher quality part-time jobs.

Perhaps most strikingly, given the current concern with 'rebalancing' our economy, where you live matters greatly for your chances of getting on - more so it seems in the 2000s than in the 1990s. In part this is likely to be because the recession of the early 1990s was a great leveller, afflicting London and the South East at least as much as other regions. In the 2000s regional inequality has bitten back with a vengeance, with those living in London being far more likely to get on (again, after taking account of factors like regional skill levels, and occupational mix).

Finally, it will be no surprise to anyone that education levels are crucial in determining earnings patterns. But not everyone would have guessed that the penalty for not holding a degree in the 2000s (when there were far more graduates around) has become much bigger, with non-graduates facing a growing chance of sliding backwards.

So the story on social mobility is not straightforward. Though headlines often tell a simple tale of doom and gloom, the national story is less negative. Yet dig down into the data and dark strands emerge. If you want to earn your way up in modern Britain, your chances overall have improved. But not for everyone. It helps if you are a man with a degree, working full-time in London.