Low graduate salary? Chances are, your parents are poor too

Low graduate salary? Chances are, your parents are poorYOUNG PEOPLE’S INCOMES ARE STILL TOO DEPENDENT ON MUM AND DAD’S WEALTH, SAYS NEW REPORT

The UK’s poor track record of social mobility means that young people’s life chances are too dependent on their parents’ income, rather than their own education and ability.

A new report published today warns that the UK has the highest level of ‘earnings persistence’ – the extent to which young people’s incomes are associated with those of their parents – amongst advanced economies. (We share first place jointly with Italy, with the United States and France coming third and fourth. The lowest levels of earnings persistence are found in Denmark and Norway.

Dismantling the Barriers to Social Mobility – produced by the TUC – also warns that the price poorer families pay for the UK’s lack of social mobility is getting worse as the income gap between the richest and poorest households has widened over the last 30 years.

The report analyses the UK’s track record on seven key factors influencing social mobility and compares its performance to that of other advanced economies.

It highlights four factors – income inequality, childhood poverty, full-time women’s employment and the link between family background and educational performance – where the UK lags behind most other advanced economies and suggests that political parties should prioritise these issues in order to make genuine inroads into encouraging greater social mobility.

Many readers of Graduate Fog are likely to have first-hand experience of another way that inequality has become entrenched in the UK – through a lack of fair access to the best jobs upon leaving university. Many of you say your parents’ financial circumstances can make the difference between making it and not making it in your chosen industry. The effect is most obvious in industries like politics, fashion and media, where long unpaid internships and lengthy periods of low-paid work have become essential before graduates stand any chance of being offered a better paid job.

While all mainstream political parties appear to agree on the need to tackle the barriers to social mobility, their proposals to tackle it vary wildly, from deregulation and lower taxes to free school meals and a stronger social security safety net.

TUC General Secretary Frances O’Grady said:

“People’s incomes in Britain are more influenced by their parents’ wealth than in any other advanced country.

“This lack of social mobility holds millions of people back and means that they don’t get a fair share of the benefits of a growing economy, such as decent pay and educational opportunities. Worse still, rising inequality means that the price people pay for a lack of social mobility is getter bigger.

“But while few people in this country would argue against social mobility, successive governments have a poor track record of tackling it.”

Graduate Fog is concerned by this new report – but we are not surprised. While many of the broad range of aspects it focuses on are less familiar to us, we do know that there have been serious problems with fair access to the best graduate jobs for many years.

We have witnessed how ‘intern creep’ has been allowed to spread from being a small problem in a few industries to a large problem in many. And we also know that too many graduate employers still hire only from a ‘golden list’ of elite universities, which are disproportionately likely to be attended by those who were at private school.

However, we welcome the report’s publication. Studies that throw light on the reality of the situation are always a good thing. And hard facts help to back up the case for correcting inequality and unfairness within the current system without further delay.

*ARE YOUR PARENTS’ FINANCES IMPACTING YOUR INCOME?
Are you struggling to gain experience in your chosen field because your parents can’t fund you through unpaid internships or other low-paid work? What can be done to correct the UK’s social mobility problems? Share your story, views and ideas below…

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