Thirty somethings have lost out the most on earnings since the recession, says a new report.
Workers in their 30s have been hardest hit by the 2008 recession and are continuing to suffer the effects, making it even harder for them to cope with the income pressures they are likely to be facing, such as raising children, according to a new report.
The Earnings Outlook report by the Resolution Foundation says typical pay for 30 somethings is still 7 per cent below its pre-crisis peak. The report shows earnings growth started to recover in early 2018 after years of a post-crisis pay squeeze and is forecast to strengthen, although the future of the British economy is completely uncertain.
The research shows that those who were young workers in their 20s during the financial crisis were by far the worst affected by the initial crisis real pay squeeze – falling 11 per cent from peak to trough – and that the current pay of those workers, now in their 30s, is furthest from pre-crisis levels.
While the pay of workers aged 50 and over is above pre-crisis levels, according to the report, typical pay levels for all workers remains 3 per cent lower than pre-crisis levels, and typical pay for workers in their 30s is still 7 per cent down compared to a decade ago.
The Foundation says that this latest data adds to the evidence that many of those who entered the labour market during the crisis have seen their pay packets “permanently scarred”.
For workers of all ages looking for stronger pay growth, the Outlook suggests switching jobs and enjoying a 4 per cent ‘disloyalty bonus’. It finds that people staying in the same job last year enjoyed real pay growth of just 0.5 per cent, compared to 4.5 per cent for people that changed job.
Nye Cominetti, Economic Analyst at the Resolution Foundation, said: “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.”