Women have seen smaller wage falls than men in the recession, says IFS

Women, older workers and the lowpaid have seen smaller real wage falls than men, younger workers and those on higher pay since the recession as earnings inequality has narrowed, according to a report by the Institute for Fiscal Studies.

The analysis by IFS researchers shows that employment and wages changes since the recession began have affected different groups in quite different ways.

The report says men have seen larger falls in pay than women. Average hourly wages fell by 2.5% for women and by 7.3% for men between 2008 and 2014. Part of the explanation for this is that female employees are significantly more likely than men to work in the public sector and, so far, average earnings falls have been smaller in the public sector, says the report.

The report also finds:

– Older workers have done much better than younger workers. For employees aged 60 and older, average hourly pay in 2014 was back to its 2008 level, but for those aged 22-29 it was still 9% lower than in 2008.

– Average weekly earnings have fallen even more than hourly wages. By 2014, they were 5.9% below 2008 levels. This reflects sharp rises in the relative prevalence of part-time work, rises which are now just beginning to be unwound, says the IFS.

– The proportion of part-time workers who say they work part-time because they cannot get more hours is almost double its pre-crisis level. In addition, the proportion of 16- to 64-year-olds in work and working at least as many hours as they want was 65.7% in the first three quarters of 2014: up significantly from 63.8% in 2012, but still 2.0 percentage points below its pre-crisis level.

– Wages have fallen despite a continued trend towards a more highly educated and older workforce working in more skilled occupations.

The report also states that average wages are now beginning to rise and that those who have stayed in the same jobs will have seen a wage rise in part in recognition of their increased experience.

Jonathan Cribb, an author of the report and a Research Economist at IFS, said: “Almost all groups have seen real wages fall since the recession. The pay of young adults remains well below its pre-crisis level after particularly large falls between 2008 and 2011, while the average pay of those aged 60 and over has already recovered. Women have seen much smaller falls than men. Falls for the low-paid have been somewhat smaller than for those on higher pay, driven by trends since 2011.”

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