So much has happened since my last post. The Times reports that the Bank of England will get new powers to regulate the buy to let market as it poses a risk to the economy. Perhaps they read my blog! Let us not forget that a few weeks back Andy Haldane the bank’s chief economist as good as endorsed the industry when he told us that property was a better bet than pensions – although in fairness this was his way of saying come on, let’s build a few more houses.
Today I want to briefly summarise the Social Mobility Commission’s annual State of the Nation report which was released yesterday. Angela Rayner (Shadow Education Secretary) called the report damming and said it should make for sobering reading for the Tories. If like me, the flippant use of emotional adjectives gets you fired up, then read on.
The report is a whopping 212 pages long but the summary is only 7 (please read it).
Social mobility is one of those annoying terms like affordable housing or squeezed middle which is used loosely and means different things to different people (when it even means anything at all). The Commission define it more precisely by considering;
- Parenting and the Early Years,
- Post-16 Education and Training,
- Jobs, Careers and Earnings, and
- Housing and Social Mobility.
All of this overlaps with my personal and professional interests and my employer The Careers & Enterprise Company did get a couple of mentions, particularly around our investment in 6 of the Social Mobility coldspots identified by the Commission.
This year’s report really was stark. Social mobility is getting worse for young people (intergenerational inequality again – I’m bang on trend). The report blames our social mobility problem on an unfair education system, a two-tier labour market, an imbalanced economy, and an unaffordable housing market. It finds that social mobility has ‘a profound spatial dimension’ which is something my own research into disengagement also found.
The headlines won’t come as a surprise. Here are a few on the earnings squeeze, hollowed out labour market, and housing crisis.
- Millions of hard-working families have experienced a 5 per cent real terms average fall in wages since 2008 and young workers have seen a 15 per cent decline in hourly pay.
- 700,000 better-paid, intermediate-skilled jobs have gone in a decade and a regional brain drain is occurring, with more graduates move from areas with few professional jobs to those with more.
- Home ownership rates among under-44s have fallen 17 per cent in the last decade as their housing costs have grown twice as fast as their incomes.
The report goes further than outlining the problems and provides recommendations such as:
- All large employers should develop strategies to provide their low skilled workforces with opportunities for career progression.
- The Government should work with large employers, local councils and Local Enterprise Partnerships (LEPs) to bring new, high-quality job opportunities backed by financial incentives to the country’s social mobility coldspots.
- Commit to a target of three million homes being built over the next decade with one-third – or a million homes – being commissioned by the public sector.
The report notes that the global financial crash was a watershed moment but that structural changes in the labour market happening over many years were also to blame. These problems took more than a parliament to arise and will take more than a parliament to address.
And why should we take note? The report tells us that:
The history of our continent tells us that when the majority feel they are losing unfairly while a minority gain unfairly, things can turn ugly. Across the world, political populism, of Right and Left, is on the march. Attitudes both to wealth and poverty are changing fast. So too, public attitudes towards immigration – and not necessarily for the better. The public mood is sour and decision-makers have been far too slow to respond.
In fairness to Angela Rayner, these are indeed sobering words.