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?

I am in middle management in public sector with degree, years and years of experience, post grad degrees in management and get about £8 more per hour than minimum wage. I am not sure the stress and pressure of the work than I do reflects that.

Capitalism happened. The system isn’t run for the benefit of anyone except the very richest.

Many workplaces aren’t giving a wage rise this year due to having to pay more in National Insurance contributions. They also don’t have to offer higher salaries as so many people apply for each post. This is particularly true of graduate jones.

Before DC I used to have a professional job, travelled, did conferences, earned 60k (20 years ago so not bad). More recently I worked in retail.

I’ve got a degree, so I’m not unskilled, unqualified.

Let me tell you that working my last job, retail, was more physically and mentally challenging than any other job I’ve had. It was brutal. The fact they get paid min wage is a joke.

End result if government short term thinking and disdain of the civil servants is that low pay dictates there is no time for genuine expertise to be accrued in some of those people’s jobs. Plus moving on from your own mistakes becomes very easy. That is more impactful as people become more senior. Also corporate memory of what happens gets lost. Public sector record-keeping generally falls apart in the departments with a high turnover because staff are expected to do more and more within the same pay and job title while there’s a concurrent recruitment freeze and zero pay increases.

So everyone is permanently over stretched and has no time to do their own job let alone train up others. No time to make note of important decisions or issues coming up urgently in the near future to deal with.

So planning falls down and the actual work becomes day to day ‘firefighting’. That is why everyone groans when a minister suddenly decides something new is their priority. There is no slack in the system to do it whatsoever. It means that the central government spend on recruitment goes up, but with no real link to the productivity or quality of what’s produced.

Our graduate salaries are £25k to qualify as an accountant in a small firm in the north. It costs several thousand a year in fees to train them plus paid time off for college, if you take this into account the cost to the business is more like £33-34k, with no experience. A qualified accountant who knows what they are doing isn’t much more.

The reason why it is low is we work for small businesses and individuals who want the cheapest price - they aren’t prepared to pay more than £300 plus VAT for a tax return or £600 plus VAT for accounts for a business like a decorator. If we can’t charge more, we can’t pay the staff more. If we increase prices clients will move as there are plenty of accountants who will do the work for this price. If you want to pay graduates more, customers need to be willing to pay more for their employers services. For comparison the owner of the practice earns £55k and the qualified accountants £45k - no one is making tons of money exploiting the new graduates.

I bought my first property in 1996, I was 26.
Wages £19,000 average graduate job, three years in.
Property was a two bedroom in a really nice area.
Cost? £37,000
Mortgage was £200 a month. Gas/elec £17 a month.
I wasn’t exactly rolling in money but I could afford a new car with monthly payments, decent clothes a foreign holiday once a year, meals and nights out.
I did extra work as well (A level tutoring) and charged £20 an hour. Had to put my price up as there was a queue.
To be fair, I worked really, really hard but my standard of living was good and there was plenty of scope for moving up the ladder.
To think thirty years later that job would be for just 5k more, but that house I bought is now worth £280,000. (I don’t live there now, just seen it for sale a few times!) I borrowed less than twice my salary, now it would be 10 times plus!)

Unskilled doesn't mean easy though.

There was a report produced by the TUC a while ago which pointed out that

1. The Percentage of GDP that went to wages is dropping, and
2. The distribution of the amount has become increasingly unequal

That in a nutshell is the issue. If the shareholders and executives got less we might get more - and as we would spend i then the economy might start to move

Agree with this.
Make no mistake - the divide between what those at the very top are taking home and the ‘normal’ people is absolutely massive. That definitely is happening and has been for a long time.

But many employees don't receive top ups. In general, only those with DC do.

It's all very well saying that work should pay enough to live, but how much would someone need to earn to support a family in a high cost area? You'd have people currently on NMW needing to earn 2/3/4 times that amount to pay their housing costs, bills, feed their families etc.

The current system works in the sense that everyone should be paid the same regardless of their circumstances and those who have higher financial needs, ie supporting DC, are entitled to top ups. Otherwise, you'd have a shop assistant on Oxford Street who had a family needing to earn say £50k (likely more tbh) to pay their bills. Only the employer wouldn't want them because they could pay a single person less because they could live in a room in a shared house and only had themselves to feed, clothe and transport so could manage on less.

And yes, it's a huge problem in the public sector that most admin jobs now pay NMW or a very small amount above, likewise graduate trainees. We have people, who have quite complex jobs, who will need a pay rise in April to bring their salary up to NMW, as has been the case for the last couple of years.

Companies don't value loyalty anymore. They value people at their desk churning out billable hours.

I've changed employer 3 times in 18 years and never regretted it. Wish I'd done it sooner as my wages went from £16k as a graduate in 2010 to £48k in 2017 switching employers. Now I'm in the top 10% of salary earners according to the ONS.

Many reasons

Austerity since 2008 has killed off productivity.

Brexit vote reduced international investment as we are no longer a gateway to the EU market

Trickle down economics has led to ever widening inequality.

Demographic changes and more long term sick as we have ageing workforce and barely functional healthcare systems ( as well as education, judicial , police, care system, transport )

That wasn't a typical salary in those days though. I also bought a property then, it cost £32k and DP and I didn't even earn £19k between us, we were both on about £8k. That house hasn't increased in value anywhere near that much either - it's probably worth about £150k now.

The difference is that benefits catch up each time quickly, it's unethical to leave families/ people who can't work due to disability or not knowing the language in poverty, but the flipside of that is the people who actually work see no benefit to themselves for it. Pretty much the only upside of working in the UK is the social capital.of calling.yourself 'employed' or 'working', the actual act of going to work brings no real gain to the majority of workers.

Would be interesting to see:

1. How many of those commenting here are SAHM.

2. How many of those commenting that the minimum wage is enough to live on are SAHM.

This is a classic example of socialism not understanding reality.

Most jobs in the UK are not run by billionaire CEOs or owned by shareholders.

Small and medium businesses are what employ the majority of people.

The owner are not making millions, many are struggling to break even.

I work for a medium size retail business - we take about £5mil a year in sales - after costs and salaries last year we closed with £30k profit - which quite frankly felt like pittance after the year of incredibly hard work we put in. We have 25 members of staff - everyone is asking for pay rises and bonuses etc and quite frankly the money is just not there.

Are you short of work though? I work in a similar role and we have realised over last few years that we have more work that we can comfortably manage, our limiting factor is labour, particularly of experienced staff. We’ve looked at all our jobs are for certain clients it’s just not worth us spending our time for a low return when we have plenty of other things available to work on that could be charged at a higher rate. We used to have a mindset of not wanting to lose clients which made us limit our charges in certain cases, now we are very much more more that’s what it costs and people have a choice to pay that or leave.

Because a lot of employers get away with it. I'm in NI and DSS started as a NQ solicitor in a high street firm in September - his salary is 25k and many of his peers are similar. DSD started as an NQ in a charity legal team 8 years ago at 30k. Minimum wage isn't the issue, greedy employers and inflation are.

I personally think 25k for a qualified solicitor who has a lot of responsibility is bonkers. Doesn't mean I think someone working in Tesco should be paid less than they are either.

in Cornwall the wages are the same today for jobs they advertised in 2011.

Exactly the same. (Including the likes of Frugi and Seasalt!)

Hence why we’re moving away.

Billionaire CEOs are not the reason wages haven’t risen and the country can’t afford stuff. It’s because more than half of the country take more than they pay in tax, and we have a huge number of people economically inactive. Although that’s not as easy to stomach as blaming RICH CAPITALISTS, though, is it?

You're right op...it's shocking. I'm a sahm but occasionally have a look at jobs in case anything catches my eye. It's unbelievable. 22 years ago when I got my first job, an average admin role payed £25k. It's still the same now. It's crazy.

I really think a lot of jobs, particularly jobs which traditionally women do, are at a wage level where it is not expected that you can support yourself, but at a level where it's a nice bit of pocket money for someone who's husband/partner has the main job.

Minimum wage is very high imho. There is not a huge difference between my salary and a person working for me. I have over 33 years experience. I’m on a similar salary to I was 20 years ago but my outgoings are much higher.
Getting junior staff is easy, the hourly rate is good.