Why are today’s salaries so crap?

[IWantToHibernate]

Currently keeping my eye out for other jobs, and it’s surprising how salaries are pretty much the same as they were for the same jobs pre-covid 5-6 years ago. Despite inflation, cost of living rises and the minimum wage going up.

Minimum wage is now almost £24k for a 37.5hr a week job, and yet I’m seeing adverts wanting people with a few years experience, a degree and a host of skills paying not much more than that.

Of course I am not knocking minimum wage jobs, it’s more that the jobs that used to pay a fair bit more than minimum wage have not really increased their salaries despite minimum wage increases.

This is in the south east too, and seems to be an issue more in the private sector.

Charity, museum, heritage, arts, all pay crap NMW wages. Not only that. They want PHD's plus experience. Plus they're mostly part time. It's terrible. DD is getting better pay in retail with a first, and Oxbridge masters. She's thinking of going abroad.

I partially blame the big increases in NMW, and also the increase in employer's NI. Employers dont have deep pockets like everyone thinks they do. This and the rise of AI is not good news for jobseekers.

Because NMW keeps going up, so those roles get the pay increase, plus usually a differential is maintained with the role immediately above, but beyond that, salary increases have been tiny or non-existent so roles are getting bunched together at around the £25-30k point and much more is expected in the lowest paid roles.

Minimum wage was supposed to be enough for someone to have a very basic standard of living. In a full time minimum wage job, you used to be able to afford to rent a 1 bed flat in an ok area, go to the local pub for a few drinks on a Friday, and generally have a decent life. Yeah, you weren’t rolling in it and couldn’t afford fancy restaurants or designer clothes but you could pay your bills and put food in the cupboards.

But then rents increased by a crazy amount, tax thresholds were frozen, and the cost of living crisis meant everything went up.

Now, it’s impossible to rent a one bed flat on one full time minimum wage income in an increasing number of areas up and down the country.

It all got a bit awkward given the terms “minimum wage” and “living wage” so the government kind of had to increase it significantly.

People still can’t afford to rent on minimum wage but it’s just about ok if they live with a friend or partner.

Minimum wage went up but other salaries haven’t followed suit.

The social contract is broken as the “work hard and you’ll be rewarded” is no longer true. Now, it’s “work hard and you’ll be fortunate enough to be able to keep your head above water and not have to use food banks”.

Promotions aren’t as appealing as they once were. It’s sometimes as little as £1 per hour more in exchange for longer hours, more responsibility, etc. Even better paid promotions aren’t always that great when it means your student loan deductions will increase and even with more money, it still won’t be enough to buy a home or go on holidays.

I know from my own experience working my backside off to earn more money - I got a better paid job but I have a worse standard of living than I did a decade ago on minimum wage.

Employers can’t always afford to pay more and there’s so many people who need to work so wages stay low.

It is disempowering for individuals because it’s so hard to provide a good life for yourself now.

I’d be interested to know how wage stagnation has impacted productivity in the workplace. I’ve noticed customer service in shops seems to have deteriorated. I know I’m not as motivated to go above and beyond at work anymore.

We arent very productive because we havent invested in stuff that increasing production since the 2008 crash. Minimum wage has gone up because its forced to, but to some extent all that means is what is expected from minimum wage has increased as a worker nreds to produce that output to be worth having. The little jobs have vanished.

As pp said we never recovered from the 08 crash and there was little investment by business or government. Low interest rates masked a lot of this though or people didn’t care as their house went up in value.

No growth, no increase in productivity leaves us with stagnant wages.

Add in Brexit

The frozen tax thresholds are a huge drag too.

I was considering going back to my old field of work as I know there is a shortage of qualified people there to do the work. To do this role you need a degree and a masters. When I qualified in 2006 my first salary was on £28,500 and I did the job for 10 years. When I looked last month for an entry level job in this field the starting salary is still at £28-£29,000. I'm not going back.

In my role the salary seems to be going down instead of up.

the cost of living is constantly increasing whilst salaries are stagnant, and fiscal drag means that we are still taxed a high amount on not that great salaries (especially Scotland). Meanwhile; there are some people who seem to be lifers oj benefits who are coming out with as much as working people.

Someone close to me is on NWM. I am sure an accountant will prove the below is wrong but here goes.

my friend let’s call her Sarah, she is in NMW / LW and lives in the south east. She takes any mention of an increase in NMW with mixed emotions. Yes it’s nice to get more money in your pocket, but, then as that’s the baseline for employment everything increases, from energy bills, cloths, food and for example Tesco Salad cream, has increased by over 79%. She said she was better off overall before Covid. Now she has another job and head just above water. All clothes from charity shops and Vinted at a push.

Companies don’t want to invest in skills anymore. They’d rather hire at a low wage and get someone who can keep the wheels turning, but they aren’t interested in progressing (in tech, processes, anything). In my field I am highly specialised. My last job (senior manager level) I had 80k salary. It was a toxic place so I looked for other, similar jobs. All Senior roles were at 60k and Heads of at 75k. Ridiculous! Companies deliberately reducing the salaries because they know people are desperate.

The living wage increased by around 20% from April 2023 (9.8%) to April 2024 (9.7%) and it made it difficult for employers to pay the higher pay scales at the same increase. Then this year employers national insurance increased and that’s also put pressure on employers. It’s inevitably caused the cost of things to increase significantly, especially in the supermarkets. The employers making millions and lining shareholder pockets should be passing on some of the profits in the form of decent pay rises….but they don’t.

Nobody should be earning 24k for full time work, degree or no degree. It’s not enough to live on in 2026.

I do think we need to lose the expectation that a degree automatically means better pay. That hasn’t been true for a long time. There’s an over supply of graduates, so what motivation do employers have to pay more for them?

sorry to hear that, what was her degree in?

The unemployment is on the rise so employers offer's small as they have plenty to chose from.

From a small business point of view with 22 employees, NI contributions have increased meaning I’m paying way more on my payroll, but it’s going to the government. My business rates will be almost doubling in April. My rent has increased. My tax contributions have increased. My utility bills have soared. As have product costs. I would much rather have been able to pass these extra costs onto my staff’s salaries. My turnover has grown but costs have soared and there are many months I can’t pay myself anything. It is so frustrating.

A very similar role in a company I left 20 years earning £21k is being advertised at £22k a year (for 37 hours a week). That’s disgraceful! Not even minimum wage. It was a fun role with some nice perks but the perks can no way make up for the awful pay. I was able to pay a mortgage and have some spare money for leisure. What hope do the younger generation have?

Until recently I was working for a business consultancy who help SME's increase their profitability. The issue is that the costs of running a business (materials, bills, increases in employer NI contributions and minimum wage) have all gone up so steeply that absolutely everything else has to be cut to maintain any sort of profitability. Basically small companies have to run like big companies in order to turn a profit, and that includes treating workers as poorly as possible and paying them as little as possible. Add in AI and outsourcing to cheaper labour markets and you've got a perfect storm of fewer jobs available in a market where companies can't afford to pay more than they absolutely have to.

It's all absolute madness because it means an increasing number of people are reliant on in work benefits as jobs don't actually pay enough to live on, but it's done in the name of "taxing the rich" when the actual rich continue to pay bugger all tax.

On top of that, utilities, business rates, consumables costs and import and export costs have increased. Staffing costs are often the only costs businesses have any real control over - you can't just decide not to pay your business rates or utility bills, but you can decide to cut bonuses, remove market premiums and recruit for the bare minimum in terms of skill and seniority (especially in a market where there are higher skilled individuals having to apply for those lower paid jobs because the higher level roles just aren't available).

Since the Covid inflation Europe is fast on it's way to becoming the new third world.

Yep. Every time it goes up I’ve been better off for a month then
council tax goes up
food goes up
gas and electric goes up
and gone is the wage increase. It’s needed just to pay the bills

I feel luckier now I earn 28k but it’s still not easy paying everything including a mortgage alone

I agree, I’ve noticed that the teaching assistant wage is catching Up with qualified teachers for a lot less work and stress and investment in education (time and money!)

I work part time as a public sector professional but it’s a 70k salary full time, if it had gone up the same as the private sector jobs had it would be 90k now. It’s a shocker that I have worked so hard to invest in my career an training and now I’m nearly 40 after doing everything ‘right’ since I was a teen doing my homework diligently and getting all A*s at school that I am still living with basically the same
quality of life as when I was a student!

this will only get worse sadly. The rise of AI is having a noticeable effect on manny professional jobs and so they just aren’t needed anymore. Lawyers, accountants, HR, etc. you name it- so many of the roles can be done at the click of a button, particularly entry and mid level that there will be a huge amount of excess supply of people vs jobs available. The result will be a drive down to the bottom for salaries.

The NMW has increased so much that it's actually overtaken the bottom band in the NHS. Have they adjusted the bands accordingly? No, they just scrapped the bottom band, so now band 2 is essentially minimum wage and everyone is one band closer to earning minimum wage. I did a little inflation calculator the other day and I worked out that if pay had kept up with inflation over the last 10 years then everyone in the NHS would be paid what the band above them is paid. Ie. Everyone is paid one band lower than they should be compared to 10 years ago.

I'm on minimum wage, working in a warehouse, and the rise looks good on paper but not in practice! I'm a temp and the warehouse now tries to employ aa few as possible so work is more stressed as we have deadlines. Supervisors' wage is not much more and they have much more stress!
Ds22 graduated last year with a master's and has been very lucky to get a permanent job at £40500 a year but where I work there are a few graduates who still haven't managed to find work in their field for 3 years.