Pay levels for workers in their 30s, the so-called millennials, remains lower than before the financial crisis, According to a new study by the Resolution Foundation, pay levels for this group are 7% lower.
The Resolution Foundation is an independent British think tank established in 2005. Its stated aim is to improve the standard of living of low- and middle-income families. It analysed living standards for those on low-to-middle incomes and found that during the financial crisis, those workers in their 20s were the worst affected.
Millennial workers saw their pay fall by 11% from its height.
Young Workers in this group saw their pay fall by 11% from its height.
The think tank suggests this drop has had a long term ‘scarring’ effect on their ongoing earnings.
Those in other age groups have suffered less. The study shows pay levels for workers over 50 is now over pre-crisis levels. The average pay of all workers is down by only 3%,
Changing jobs could help, say Think Tank.
For those workers looking to give their pay levels a boost, whatever their age, the think tank had unequivocal advice: get a new job.
However, for many, changing jobs is not as easy as switching your energy bills or broadband providers. This would be a daunting prospect for some.
Whilst employment is at an all-time high, the figures include anyone working 16 hours or more a week. Also those on zero hours contracts. While many jobs are transient some worker’s skills are not so easy to relocate.
The resolution foundation said that while pay growth for workers who remained with their same employer was 0.5%, the average uplift for those that switched jobs was 4.5%.
Good news about pay is on the horizon.
However, there is good pay news on the horizon for those who do not change or cannot change their jobs. Following a pay squeeze in 2017, earnings growth recovered in 2018 and is forecast to strengthen in 2019 to 1.5%.
Although this would mean pay growth would still remain below a pre-crisis level of 2.1%, it would be the strongest rate of growth since the EU referendum in 2016.
Commenting on the research, Nye Cominetti, economic analyst for the Resolution Foundation says:
“Britain has experienced a truly horrendous decade for pay, but an increasingly tight labour market is finally starting to deliver a pay recovery.
“Whether this recovery continues to build momentum in 2019 will depend in large part on what happens with Brexit.
“But there remains a lot of ground to make up before we return to pre-crisis pay levels. Especially for those workers unlucky enough to enter the labour market during the financial crisis. Workers in their 30s today are still earning 7 percent less than thirtysomethings did on the eve of the crisis.
“This scarring effect on the wages of today’s thirtysomethings is particularly concerning at a time when many are facing the increased income pressures of bringing up children or aspiring to own their own home.”
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