What the fuck happened to wages?

[HauntedBungalow]

Minimum wage from this April is £24k, give or take. So why am I seeing graduate jobs advertised at that level, like we're still in 2005? Middle management, upper tier admin roles too, all at or around the same, maybe scaling the dizzy heights of £2-3k more but not by much. Something terrible has gone on with wages in the UK throughout this century. The unions like to say it's only public sector workers that are affected but it's not, it's across the board. What's the cause? Currency devaluation? Lack of productivity type investment? Hyperfocus on asset investment? Something else?

We NEED people doing those unskilled jobs far more than we need a lot of the jobs that are done by people with expensive educations and high salaries. They make a lot of money for someone else, that's why they earn more. Not because they benefit society. You want to put essential workers on poverty wagers. More than they are already. Nuts.

Can't agree more. Race to the bottom. My friend is a medical secretary at a very expensive private hospital. She is bank and other ladies at the hospital are full-time staff. She is on £16 ph and the ladies are on £12 ph (they throw in a gym membership and private health insurance for the minimum wage ladies). She is not lying and I am shocked. A private hospital, my arse.

But that isn't an office manager job. Everything in that spec refers to assisting and very basic sdmin. There is nothing there that indicates any complexity or any independent decision making.

The biggest issue is that there are too many graduates who often don't have the foundation level skills to function In such a job without significant guidance and correction which they invariably don't want to receive due to cognitive dissonancem

Last time I said wages were too low I got shouted at on here....

The fact is post Margaret thatcher unionism has declined, there's less community. People need to start organising in unions and demanding more.

Yanbu OP. Its a huge issue

I'd add 3 things

• gordon brown started this with fucking working tax credits. More than one economist warned him of the dire long term implications but blair & brown didnt give a shit they just wanted to win the election and bask in the back pats over their "miracle economy".

• its been going on longer that that. my grad salary was 24k in 2008, my boss who was a decade older had a grad starting salary of 23k in 1998!!!! And that was in media which is not especially well paid.

• swathes of people are working 16 hours a week and due to benefit components inc. Housing have the equivalent income someone earning anywhere between 40-65k gross depending.

this is fundamentally wrong in the context of current FT working salaries but people are unable to have the conversation and say either benefits need to drop or salaries need to rise / taxation band should rise without being told they are ultra right bigots that are happy for people to die in the gutter.#NoDebate

Its depressing all round

I've seen several graphs that date it to the financial crisis of 2007/8 - that the UK basically didn't recover from. You can see the US continuing upwards while the UK flatlines after that point. Why, not sure, some macroeconomic reason that someone smarter than me knows.

However, some observations as an immigrant, that I find "weird" about UK wages:

I think there's an element of culture. There's a lack of willingness to negotiate salaries, and an idea that jobs have set pay rates in fixed bands and everyone should be paid the same. A lot of tall poppy syndrome - people apologising for being so privileged as to earn £30k. Culturally inheritances/BoMaD seem more acceptable than earning a high salary.

Then these cultural factors interact with a benefits system that absolutely skews perceptions of the lifestyle certain salaries get you, and with a legal system that enforces pay rigidly, e.g. equal pay legislation that significantly raises the costs of giving one person a raise as it has to be given to many unanticipated others, and with structurally high rates of employment in the public rather than private sector, monopsony employer = lower wages.

Absolutely.

It’s bonkers. My starting salary as a new grad 20 years ago was £21k and I lived happily on that, renting in London. The other day I saw an ad for a researcher in some kind of statistics role, they wanted a masters/PhD and lots of experience in this that and the other. Salary was about £33k!

There is something here I don't recognise though around graduate level jobs. My DC are 30 and 26 and work in education. The 30 year old is an academic, lucky to have a substantive role, and on about £40k. The 26 year old is an NQT and with a couple of allowances and LW is on £42k. Their partners, PR and accountancy, are on £53k and £100k.

The economy is still paying for skilled graduates. The issue is that many roles requesting graduates are not graduate roles - a handful of O'Levels would have been sufficient a few generations ago and the applicants were probably better educated and better disciplined, less entitled and far less arsy in the workplace.

Nailed it. Working tax credits have been an absolute disaster, allowing the minimum wage to become the maximum wage.

wasn’t it originally conceived so that all the skilled men who had lost their jobs in industry and were scrabbling around applying for the historically female jobs in areas like retail (because that’s all there was) could still have some dignity by bringing home the equivalent of a ‘first wage’ rather than the second top up wage? I might be wrong but I’m sure that was how it first came about, even if it wasn’t publicly made known.

Yeh I agree OP. I got my first grad job in 2012 on 16k in London and it barely covered my living expenses. I've since moved abroad for 5 years and looked at coming back but wages seem stagnant. I've applied for roles and the salary offered has been 15k less than what I was on 5 years ago and living expenses are so much higher. Best advice I give to any young person in the UK now is to leave, work abroad for a few years and come back when the UK has got better (no idea if that will happen). Also know it's not so easy to move post Brexit but I would be trying my best to leave.

YANBU. I'm no mathematician but I tried to work out the value of my current wages vs wages at my first job. I adjusted for inflation and cost of living etc and found that what I earn now with a post graduate education and 25 years experience is actually worth less per hour than what I was earning in my Saturday job at a fast food place at 17 and still at school. Utterly depressing.

I don't recommend anyone to do this calculation for the good of their mental wellbeing.

@mishmashs my starting salary in a bank, in the City, in 1980 was £6k. I was not a graduate.

Anyone with a professional qualification who has any sort of aspiration is better off moving abroad than staying here. Nurses, doctors, midwives moving to Aus for example get fairer pay (even against higher living costs), are valued more, treated better by their employer and it's a better lifestyle.

I will also add that I'm in Switzerland and it feels like the base expectation from an employer is that everyone now requires a Masters/post grad and to be able to speak at least 2 languages for a graduate role.

£24k now is reasonable for minimum wage. It sounds high to us old enough to have been in work a while but £24k now is the equivalent of £13-14k in 2005.

That's not the issue.

It's that other wages have not kept suit.

£24k should not be seen as anything but the very bare minimum and most jobs should have stayed up with inflation. They haven't and lots of people are now paid half what they were twenty years ago, in real terms.

I wonder what proportion of workers are union members now, compared to a generation ago.

wasn’t it originally conceived so that all the skilled men who had lost their jobs in industry and were scrabbling around applying for the historically female jobs in areas like retail (because that’s all there was) could still have some dignity by bringing home the equivalent of a ‘first wage’ rather than the second top up wage? I might be wrong but I’m sure that was how it first came about, even if it wasn’t publicly made known.

That's really interesting. I hadn't heard that before. I'm not sure Tax Credits work very well for that purpose though.
Culturally, it seems more common for women to take responsibility for applying for, and managing, benefits money.

I graduated from a top 5 uni in 2010 and my salary was £22k. Starting salaries were around £18 - £24k for grads, the upper end considered high at the time. That was much higher than minimum wage. I know as I had been earning minimum wage in the uni holidays.

The current place I work in the same industry is offering £35k to grads now and £40k+ with a few years experience.

I rented a room (cupboard sized in zone 4) in London 2010 - 2012 for £380. I know someone in the same area renting a bigger room for £550 now. House prices increased particularly steeply between 2013 and rent particularly in the last couple of years.

Salaries and inflation don't seem to adjust concurrently but it looks like things are generally increasing in the same direction.

This is very true. Its now the case that hundreds of graduates are competing for admin/secretarial jobs that decades ago would have gone to a 16 year old who left school on Friday and started in the office on Monday.

Working tax credits was to make working worthwhile, prior to that people could end up worse off by working as there was a cliff edge where they lost all benefits. I’m not saying the system is totally working but fundamentally an an individual basis someone should always be better off by taking on some work rather than none.

£24k isn’t representative of typical graduate salaries in the mid 90s, I started working as a graduate in 1995 on £8500, even the big 6 accountancy firms as they were at the time were paying less than £20k starting in 1995. We had school leavers being paid £5500.

The massive increase in minimum wage is a huge issues in the public sector. The bottom couple of bands are barely above minimum wage so why would people want to do those jobs. All salaries above minimum wage need to go up.

100%

In the public sector, the parameters for wages increases have to be signed off by the central government of the day. It is a political decision to keep them low. I’ve actually lost count of the number of years in the 00s and 10s they there was zero increase allowed in civil service departments and regulator body wages at all. Unless staff take matters into your their hands and change jobs.

It probably sounds like a better deal for the taxpayer running the public sector like this, But it’s a shit deal for the dedicated people who want to stay doing what they are doing, to specialise in something or just to become expert in working on something, or who need to do a job in something particular or to be based somewhere specific to be able to work at all.

Also this has encouraged a bad short termist musical chairs type culture, with some people making often sideways-move jobs inside the public sector every year and half or two years just to find a small pay rise.