Millennial workers' pay still feeling the pinch 10 years after the financial crisis

Published by Rachel Lacey on 04 February 2019.
Last updated on 05 February 2019

Confused millenials

Pay for the typical 30-something remains 7% lower than its pre-crisis peak, according to a new study from the Resolution Foundation.

The think tank that analyses living standards for those on low-to-middle incomes found that during the financial crisis, those workers in their 20s were the worst affected.

Workers in this demographic saw their pay fall by 11% from its height. This drop has had a long term ‘scarring’ effect on their ongoing earnings.

Other age groups have not suffered to such a large degree. The pay of workers aged over 50, for example, is now over pre-crisis levels, while the average pay of all workers is only down by 3%.

For those workers looking to give their earnings a boost, whatever their age, the think tank had unequivocal advice: get a new job.

It 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%.

Even for those that don’t change jobs, there is good pay news on the horizon. 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 per cent 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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I know the feeling! But it is

I know the feeling! But it is not just the millenials who sugger like this. I am retired now but I was in a job that was reclassified as one paying less so got stuck on a 'protected' rate which made my pay shink in real terms by 8%. I never got it back and never will.