If you’re a student trying to get a first job, an accounting career has several things going for it. The Big Four accounting firms are easier to get into than the big investment banks. They offer more in the way of sabbaticals. And they look like more fertile ground for students from outside the middle classes.
Banks’ tendency to discriminate against working class students was documented in a study last year that highlighted their preference for student hires with “polish” (including middle class accents, expensive suits, and shoes that are black rather than brown). Now, a new study from the UK government’s social mobility commission suggests that even if you manage to land a finance job when your parents aren’t middle class, you’ll be paid a lot less than those whose parents are. This doesn’t happen in accounting.
The two charts below summarize the problem. In the first chart below, finance careers are represented by the ‘finance managers’ category. The study suggests that 47% of ‘finance managers’ come from households where a parent is engaged in a professional career as opposed to an ‘intermediate’ (skilled non-manual and technical) or working class job.
In accounting, the proportion of hires from professional parents is even higher, at 48%. However, the second chart below suggests that accountants treat their non-middle class hires very differently to finance firms. Even when all kinds of controls are allowed for (e.g. educational qualifications, location, role), non-middle class people in finance earn, on average, a lot less than the children of professionals. After the same controls, the two social groups earn pretty much the same in accounting.
The implication is that even if finance firms and accounting firms discriminate equally against candidates from non-professional families at the application stage, accounting firms do more to support non-middle class candidates once they’re through the door, enabling them to earn more money. By the same reckoning, it looks like finance firms strongly prefer their middle class employees – and pay and promote them more than any other industry.
Banks are trying to do something about their middle class bias. J.P. Morgan, for example, runs an “employability programme” to help students from deprived areas of London; Nomura recently launched an ‘Upreach Programme’ in the UK for students from deprived backgrounds. Getting a job is one thing, however. Progressing in it is another.
Source: Social mobility commission