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 don't really have much to contribute here, other than experience and opinion. I believe people working FT in any role should gain income to be able to live, and I think the majority of people agree, I appreciate a higher wage at the bottom, not so much at the very top when the those below do so much propping up in terms of admin and gatekeeping.

I receive in work benefits, I am a single parent (for 8/9 years), one son is disabled. I have a Masters degree and work in education part time around my children having previously worked full time. I own my home (which i hate and can't afford the work needed but that's another day). I never knew about child disability payment until my son was 9 when it was mentioned to me by a parent at the outdoor school is was turfing back and forth to. The difference that money has made has been incredible, to the point that my son has improved quite considerably (I really didn't realise the toll having very little income was having). When I worked full time I was regularly skipping meals and going without. I think there is something uncomfortable in this, and a fear that we do not deserve additional money and it will all be taken away.

The min wage increases have been grossly disproportionate. Governments of all colours have an incentive to do this so that their benefits bill is less.
Ultimately there is much less difference between wages than their was 20-40 years ago. Whether that is a good or bad thing is debatable.

I think less people are willing to do physical labour. In work benefits have allowed employers to pay under the cost of living wages for years. You have people living in costly cities paying rent to private landlords which couldn’t be afforded without benefits. Essentially the government is paying thousands every year per person to
provide cheap labour. The employer should bear the cost of labour.

High immigration = unlimited pool of labour and high competition for jobs. Firms can get away with paying less for jobs because staff are ten a penny. Excuse the pun….

Add to that that many immigrants do low paid work and are net recipients of the state (having salaries topped up with benefits, having a higher number of children than natives) and often bring with them unproductive relatives eg elderly parent wanting NHS care.

I completely agree OP. I took redundancy in Dec and was shocked by some do the requirements they wanted for a little over minimum wage, especially in the charity sector!

I am taking a stab at self employment - wish me luck!

We pay unemployed people on universal credit more than doctors and accountants earn in India and other major economies.

We have the highest electricity bills in the world for an every supply which is intermittent and gets turned off for large industrial customers. We have residential electricity bills which 15 times higher than some countries have.

The UK can't treat unemployed people like they are rich. The fact is the UK has slipped from a top 5 wealthy country per capita to top 25.

Next year the UK will fall even more. Rachel Reeves non Dom tax has meant we have lost taxes equivalent to the entirety of Manchester as 11,000 rich taxpayers have left and will stop paying billions in tax and investment.

In a few years time Poland will overtake us. We have to face reality. We have chosen policies which kill economic growth therefore we will be poorer and people on benefits will be poorer.

It's probably actually both, but that's too nuanced a problem for most people to handle.

I do agree with a decent wage for all jobs. However, I've seen an issue though where those on just slightly more than lowest paid staff, say supervising in hospitality, often end up doing more hours due to salaried role and needs of business but then can end up on less than those they are supervising- unless the job is your passion or you have motivation, ability, and opportunity to keep on up the ranks then it gets quite depressing.
Unless there's a seismic change in humans and we all choose to just work for the good of society, then there needs to be some comparative wage benefit to more 'senior' jobs. I definitely liked the idea that the CEO shouldn't be on more than 10x the lowest paid though - it's striking a balance and also recognising everyone's contribution as valued.

Have you lived off it? It's not high!
As a single person it's tough to pay my mortgage, pension, bills, student loan, run a car etc etc on it with no top ups

Posts on here about the squeezed middle of 2 x people earning 40-50k each or struggling on 100k salaries yet in the same breath saying min wage is too high - we all have to pay living costs

Exactly, it's not high at all. I can tell you that as a single mother who survived on it for 3 years with a baby, rent to pay, and all the rest. Even with a UC top up more than 50% of what I was bringing in was going on rent. It was a killer.

On around 35k now and I still only have a little to put in savings each month. It's hard being on minimum wage.

I have done a similar one and wished I hadn't. But it did at least give me confidence that it's not all in my head.

This is nonsense.
We are London based for work. It is hard to hire appropriately skilled admin staff for £30k plus. For an employer, publuc sector, the on costs vis NI and pension are about an additional £12k.

Increasingly Eastern European staff have better communication skills, written and oral, and a significantly better work ethic than the local population.

Since about 1999, I have employed Eastern European cleaners. Initially Polish, now Bulgarian. I pay £17.50ph. I would have more chance finding a pink unicorn to clean than a local person.

Few wages are easy to live on tbh.
My point is that employers can spend a certain amount on costs, including wages. So what happens in lots of jobs, are that employers don’t readily employ leavers, they see the wage saving as a relief. Meanwhile more pressure is put onto existing teams.Lots of industries are really having a tough time.

Wage stagnation was a response to the 2008 financial crisis. Wages hardly moved since then but inflation was also quite low so people werent noticing as much, although there was plenty of people who did. Was also very hard to build savings. it's been about 15 -17 years of this. We recently had a bit of inflation and minimum wage became unlivable and was put up. I'm surprised people are blaming this on the benefits in this country as the wage stagnation thing is well documented.

But the gap has really narrowed and it's possible to want people on minimum wage to afford thier bills and want all your knowledge and skills that are extra to be paid fairly too.

"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."

I think 1995 (and giving different job types) is a good place to have a look at.

According to the Bank of England inflation calculator prices have more or less exactly doubled between 1995 and December 2024. (For example something that cost £40 in 1995 would cost £80.70 in Dec 2024).

The (now) big four accountancy firms are paying around £33k for new graduates so even they haven't kept up with inflation.

I remember what my salary was in 1995 as that was the year I bought my first house. At the time, I was a graduate with a STEM degree and seven years experience (not in accountancy or anything like that).

With now having an extra 30 years experience and various promotions etc, I am earning 130% more than I did in 1995. But, inflation has doubled during that time and so, after allowing for inflation, my pay is only 21% more than it was in 1995 in real terms. Even after the promotions that I have had during that time.
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"We had school leavers being paid £5500."

In contrast, people on low wages have done very well since the minimum wage was introduced in 1999.

Although school leavers (those under the age of 21) can still be paid a lower wage, for a typical office job (say 9 to 5 with an hour for lunch - 35 hours per week) the minimum wage is now £22,222 per year.

That person on £5,500 in 1995 is now being paid four times as much.

But I do think the big issue over the last 30 years has been the increase in housing costs.

Back in 1995 the average price of a house in England was £53k. In Nov 2024 the average price in England was £306k.

My salary certainly hasn't kept pace with that sort of increase.

Yes, and the shareholders are very often overseas.

A graduate trainee is an apprentice

(It is quite depressing where professional salaries top out, though)

I don't think minimum wage is too high - when you look at the rising cost of everything else, especially rent/housing. But agree the levels above minimum wage have really stagnated.

The other thing is student loans. The theory is if you don't earn very much, you won't start paying it back yet. Now the threshold is about 25k. By the time the current cohort graduate that may well be minimum wage, so basically working ft in any job means the deductions for repaying start immediately.

Increasingly a degree is a very risky investment, unless it’s pointing you at a job where salary rises rapidly and there is a large number of jobs eg finance.

I started a grad recruitment programme in the 90s I earned £16k, I was commuting into London. It was fair - I had no experience. My second job 18 months later paid £18k and I didn’t have the cost of commuting (walked to work). Both jobs were about 60 hours a week - we grafted and were rewarded with opportunities.

The salaries haven’t kept up, but the workload has reduced. I don’t know any 20-somethings in my industry that will work those kind of hours now. So it takes ages for them to learn their jobs and progress - a year of working 37.5 hours a week doesn’t teach you as much as if you work almost double that.

I think you make a good point.

Agree we bought our first house in 1999 and it was just under £50k. Our neighbours who bought about 5 years after us paid double.

Just musing here but it would be interesting to consider , those companies or industries that need to be helped by the government (through in work benefits to employees), surely there needs to be a shift in the gap between the higher paid roles and the lowest. Why should businesses carry on paying insufficient wages for people to live on without receiving state benefits. It seems perhaps that those few at the top of companies could stand to earn a bit less and reduce the inequality divide. This would also mean the middle earners could earn a fair bit more than lower paid roles and graduates.

Just to add my graduate salary in 1991 was 11k but my friends who were non-graduates were on about 6-9k so there was a real difference.
And please don’t think I’m being snobby I just have a good memory. I lived with one of my friends for a while she bought her first house on an 8k salary it was £30,000. She worked weekends doing all sorts of extra work, including bar work, to pay the bills.
By the time we were mid 20’s as a group all
my single friends owned their own properties and we were ordinary working class girls.

Yep mine jumped from £37,000 in 1996 to £97,000 in 2000. Bonkers!

Mega wage stagnation and employers talk to each other (I know this for a fact) in some sectors to benchmark salaries. You get ads saying that a benefit is an app, or medical insurance that you have to pay for practically in total, discretionery bonuses.... I have post grad qualifications, significant industry experience and yet try finding a role in my sector that pays anything different to what's on offer elsewhere! Everything has gone up by huge amounts (I have my council tax bill from 20 years ago, now there's a shocker, let alone the utility bills) but definitely not salaries.