Sam Wait: Charities must stop ignoring class when reporting pay inequality

29 Sep 2023 Voices

The lack of charities reporting their class pay gap is making the class ceiling harder to break, says Sam Wait…

By TimeShops / Adobe

Over the summer, Civil Society looked at how or whether large charities voluntarily monitor pay disparities across the diversity of their workforce.

We found that 27 of the largest 250 charities in the country have begun voluntarily reporting pay gaps between workers based on their ethnicity, some 11 based on their disability and just three based on sexual orientation.

Meanwhile, since 2017 all large employers have been required to report on their gender pay gap. 

However, none of the 250 charities in our sample reported their class pay gap in 2022, with one beginning to do so.

Why are charities ignoring class?

Social class appears to have slipped through the net as a characteristic that could disadvantage an employee’s wage slip in the charity sector.

This could be because class background is not a protected characteristic under the Equality Act 2010, unlike race, gender, disability and sexual orientation.

Charities might also see class, and boundaries between different socio-economic groups, as less simple to define and therefore monitor than other characteristics.

For example, modern academics argue that terminology such as upper, middle and working class seem outdated in the 21st century. 

A study conducted in 2013 by sociologists and the BBC defined seven social classes in modern Britain. These groups were determined by examining respondent’s economic, social and cultural capital.

When socio-economic class can be determined by something as nuanced as the cultural experiences a person enjoys to who they surround themselves with, measuring it can appear complicated and daunting.

However, the Social Mobility Commission (SMC) has published guidance on how employers can assess the class backgrounds of their staff.

The questions it recommends employers to measure socio-economic diversity include the occupation of an individual’s main household earner at the age of 14, the type of school they attended from 11 - 16 and whether they were eligible for free school meals.

Teach First reported its class pay gap for the first time this year. The charity consulted SMC’s guidance and decided to ask staff what their highest-earning parent’s occupation was at the age of 14.

It is not a perfect method but the fact that Teach First has managed to produce robust data – as have private firms such as PwC, KPMG and Clifford Chance – shows that measuring class pay inequalities is possible.

Why it is important to measure

Teach First reported a class pay gap of 4.6%, meaning working-class employees made 95p for every £1 colleagues from higher socio-economic backgrounds did.

The charity also found an underrepresentation of working-class staff in its highest pay grade, which it intends to improve upon.

Kate Wiggins, Teach First’s head of people, partnering and development, said the charity takes the view that “what gets measured gets managed”.

“That gives us a level of accountability in our work, and it gives us the baseline to be working from to really understand what representation looks like in the charity.”

Meanwhile, Social Mobility Foundation (SMF) chief executive Sarah Atkinson, said: “Too many people from working-class backgrounds face barriers getting in and getting on in their professional careers.

“All the evidence, and the experience of people working in charities, tells us that these barriers exist as powerfully in the voluntary sector as they do in the private sector.

“Collecting socioeconomic background data is an important step in identifying and tackling these barriers, and ultimately to measuring and committing to close the class pay gap.”

Class pay inequalities in wider society

A study by SMF estimated that there is a wage gap of 13% in favour of non-working-class staff in “professional occupations” across the UK.

This means on average that professionals from working-class backgrounds were paid £6,718 less per year than their colleagues from professional-managerial backgrounds.

SMF’s report also showed that class intersected with race and gender to create larger wage biases. For example, people of Indian heritage from a working-class background were on average paid £7,181 less than people of the same heritage from professional-managerial backgrounds.

Charities have a class diversity problem 

When people from working-class backgrounds enter the charity sector, they report seeing class diversity issues, as shown in a recent report by the Reclaim Project

Its study of 227 people from working-class backgrounds working in think tanks and charities found 94% believe the sectors have a class diversity problem. 

Most respondents said they do not talk about their background at work, or do so only partially. 

This lack of transparency in an organisation on who is from a working-class background is part of the problem. If charities do not survey their staff to find out who is from a working-class background, wage discrepancies could go unnoticed. 

Working-class staff lack a professional network

Transparency on all accounts can help reduce wage gaps. 

People from working-class backgrounds in professional-managerial roles are less likely to have a network of people in the same career as them. 

This could make it harder for them to ensure they are being paid a fair wage, as they are less likely to have a human point of reference and more likely that employers could be underpaying them. 

Indeed, SMF’s research suggests that class pay inequalities increase with more senior positions.

It found the largest class pay gap was amongst CEOs, with an average £16,748 difference in annual earnings between those from professional-managerial and working-class backgrounds. 

This was followed by finance managers from working-class backgrounds, who were paid £11,427 less than their more socio-economically privileged counterparts. 

Holding charities to account

When charities report on wage gaps, they can begin to address pay inequalities and be held to account.

In 2017, after gender pay gap reporting became mandatory, Civil Society found an average pay gap of 11.2% in favour of men from a sample of 100 charities. By 2022, this fell to 10.3%

Despite this only being a marginal improvement, it equates to hundreds of pounds for employees and makes for a more equal workplace. 

Besides potentially improving pay equality, a charity reporting on its class pay gap could be looked upon positively by prospective employees from working-class backgrounds. 

It demonstrates that an organisation is taking working-class inclusion, representation and fair pay seriously.

In a sector dedicated to doing good, it is imperative that it is not inadvertently causing harm by failing to measure and address class pay gaps.

Editor's note: This article has been edited to reflect that Teach First reported on its socio-economic pay gap in 2023, not 2022. This means none of the charities in Civil Society's sample reported on their class pay gap for 2022. 

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