Mind the gap: financial London and the regional class pay gap

Abstract

The hidden barriers, or 'gender pay gap', preventing women from earning equivalent incomes to men is well documented. Yet recent research has uncovered that, in Britain, there is also a comparable class-origin pay gap in higher professional and managerial occupations. So far this analysis has only been conducted at the national level and it is not known whether there are regional differences within the UK. This paper uses pooled data from the 2014 and 2015 Labour Force Survey (N 5 7,534) to stage a more spatially sensitive analysis that examines regional variation in the class pay gap. We find that this 'class ceiling' is not evenly spatially distributed. Instead it is particularly marked in Central London, where those in high-status occupations who are from working-class backgrounds earn, on average, £10,660 less per year than those whose parents were in higher professional and managerial employment. Finally, we inspect the Capital further to reveal that the class pay gap is largest within Central London's banking and finance sector. Challenging policy conceptions of London as the 'engine room' of social mobility, these findings suggest that class disadvantage within high-status occupations is particularly acute in the Capital. The findings also underline the value of investigating regional differences in social mobility, and demonstrate how such analysis can unravel important and previously unrecognized spatial dimensions of class inequality.

Privileges and penalties in the legal profession: an intersectional analysis of career progression

“…Our results lend some support for the tournament thesis in corporate firms – despite increasing diversity at entry level, the up‐or‐out system results in a white, male socio‐economic elite maintaining their privilege in the most lucrative segments of law and in the most senior positions in large corporate law firms (Wilkins and Gulati : Gorman and Kmec ). Our findings support Friedman and Laurison's () argument that central London may not be the ‘engine room’ for social mobility within elite professional service firms, but rather remains a stronghold of existing inequalities, occupations operating socially and culturally based closure regimes that privilege white men of middle‐ and upper‐class background. However, the tournament thesis is more relevant to those who enter and compete for commercial practice areas and promotion to partnership.…”

The field of graduate recruitment: leading financial and consultancy firms and elite class formation

“…Client‐facing positions are still seen as better suited to middle and upper‐class graduates from elite private schools while the trading floor is more accommodating to working‐class students and/or those with particular technical or mathematical ability (Moore et al : 84–7). This fits Friedman and Laurison’s () analysis of the ‘class ceiling’ within particular professions in the UK, with upwardly mobile working‐class professionals in finance earning considerably less than their middle‐class colleagues. Their analysis also confirms a regional element to this with the pay gap being considerably larger for those working in finance in Central London than elsewhere (Friedman and Laurison ).…”

Socio‐spatial mobilities and narratives of class identity in Britain

“…In contrast to studies pointing to the domination of service-class privilege and the relative impenetrability of the capital's 'class ceiling' (Friedman and Laurison 2017;Friedman and Macmillan 2017), this suggests that London and the South East are not simply a source of rising and accentuated inequalities. The fact that migration from the North and Midlands was needed to enhance the prospects of both those moving up the ladder and those seeking to maintain their middle-class status is certainly a powerful demonstration of the capital's 'vortex' effect in draining other parts of the country of talent.…”

“…Friedman and Laurison’s recent study () takes issue with the escalator idea, specifically calling into question the SMC’s depiction of London as the national ‘engine room’ of social mobility (SMCPC ). They use data from the 2014 Labour Force Survey (LFS) to analyse regional intergenerational mobility rates in the UK, linking these to class pay gaps in recruitment to elite occupations.…”

“…Issues of place and class have reverberated through the subsequent debate about why the Leave campaign won, with one particularly prominent strand of commentary arguing that it harnessed a provincial revolt of the ‘left behind’ against the metropolitan liberal elite (Goodwin and Heath ; Harris ; Moody ). Yet while the SMC’s concerns have sparked a renewal of academic interest in the spatial distribution and regional dimensions of social mobility, most notably in Friedman’s recent contributions with Laurison (Friedman and Laurison ) on elite mobility and the regional class pay gap, and with Macmillan (Friedman and Macmillan ) on migration and opportunity hoarding, this work provides limited perspective on the crucial interplay between movement in social and physical space.…”