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?

The minimum wage increase has meant that inequality (as measured by the GINI index) in the UK is falling, but it's because the floor is being lifted, and the gap between lower and middle earners is shrinking quite dramatically.

We have the worst of both worlds - minimum wage costs employers hugely and then minimum wage earners are still eligible for significant benefits, which hits the taxpayer.

Agree with a PP in that a degree is only worth it if you know you can make significant salary gains in the first 5-10 years post graduation.

Sad to see so many comments that the minimum wage is 'too high'...

Amazing how people always try to kick down the poorest while totally failing to see the wider picture: bonuses and salaries for CEOs, directors and so on are astronomical and companies prioritise shareholders rather than fairly rewarding the staff who do the actual work.

That's capitalism for you.

Companies also got used to paying shit wages because they expect the benefit system/tax payers to pick up the slack.

Our wages also seem very poor because of the ridiculous cost of housing and utilities in this country.

We are getting close to the point where business won't think it is worth employing people on minimum wage, and it's all part of the plan.

John Van Reenen is one of Rachel Reeves' most trusted advisors at the Treasury, and he is very much of the view that one of the (many) fundamental causes of Britain's growth problem is low capital investment. It has historically been cheaper to pay someone poorly rather than invest in automation, computerisation, and AI.

Rachel Reeves recently met business leaders who warned her that her policies would lead to more automation and less employment. Her response? Reported to be "Let me know when there's a problem".

You'll never hear Labour admit it, but whacking up minimum wage, better employment rights, and the huge increase in employers' NICs in last year's budget are all intended to incentivise investment in productivity improvement rather than employing people on NMW. When that happens, there will be more money available to pay higher cost (i.e. more skilled) workers.

Correct, during the pandemic it was key workers who kept the country going and risked themselves, most are paid minimum wage or slightly above

We keep hearing this, yes of course someone's salary doesn't reflect their importance to the running of society, but it's not true that they alone kept the country going. Lots of low paid workers were furloughed, and lots on higher (but still crap) wages provided vital services during this time.

These could be ghost-jobs. They don't actually want to fill these. They just want the number of job-openings at a certain level. It looks good on paper and shareholders like it.

@MrsRobinsonsHandprints I understand reality just fine and I don't think I ever said I was a socialist at any point. I just don't think the way the gap has increased between the rich and poor in our society since the 1970s is acceptable.

Medium and small businesses are still impacted by wider economic forces in the rest of the market and political decisions that mean it's harder to pay their employees enough. Austerity and lack of investment in infrastructure projects from central government has a part to play in this too.

I'm currently recruiting for a graduate-type role, and we're advertising it at £25k. BUT - there's a bonus scheme (up to 10%, paid out 7% last year as an example), and the opportunity for promotion. Within 18-24 months they could easily be on 30K. So it's not like a minimum wage job where that's where you'd stay.

'@MrsRobinsonsHandprints
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.'

You are being too simplistic...

A big part of small and medium businesses's struggles come from ludicrously high utility bills from greedy utility companies and equally ludicrously high rents for premises set by equally greedy landlords.

Big supermarkets, companies like Amazon, private social care companies, big players in the leisure and retail industry sector pay their employees a pittance while raking in huge profits. That's a fact and nothing to with 'socialism'...

oops wrong thread

I'm like a broken record saying this. We never recovered from the 08 crash but low interest rates masked it & many felt richer due to assets increasing. Wages have stagnated for yrs and this started under Thatcher. No investment in anything since 08.

We also have the huge problem of an ageing population now.

I think that the West has been happy to buy things cheaply from developing countries but again means money is flowing out rather than being spent locally.

Yes, we also want cheap.

You can be a totally unskilled inexperienced person getting £24k a year

Which isn't a high salary...

The rest of wages stagnating is a separate issue

this

Their partners, PR and accountancy, are on £53k and £100k.

100k isn't a normal grad accountancy salary nor is 42k for a NQT..

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.

Agree but this is just exacerbate the situation for those staying.

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.

Largely because of an aging population. Its not unusual to have a high proportion of people taking more in tax then they put in, it works when demographics are pyramid shaped.

@ThatOchreRobin there is definitely an issue with all salaries not keeping pace with inflation as opposed to just minimum
wage. I do think there is a difference though as someone on minimum wage is often stuck there with a job that has little progression whereas a teacher can climb the scales or try leadership.