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.

Either you lived amazingly as a student, or I question your budgeting abilities on a £70k salary.

I earn 70k a year in not living the high life but I certainly have enough to live comfortably. This does of course depend on your circumstances but when I was a student I couldn’t afford much more than toast to eat there is no comparison

@Koalatea13 she said it's a £70k salary full time equivalent but she works part time.

Because minimum wage is artificially high.

The salaries in the levels above the minimum wage jobs have not increased at the same percentage as the minimum wage, so there will be wildly ranging jobs between 24/30k in terms of knowledge experience and qualifications.

I’ve been looking at jobs lately and some are offering significantly lower salaries for a lot more work.
Even worse is the jobs that look great but with no salary on the job description- employers are looking to low ball people as much as possible.

Companies care more about profits.

The minimum wage is not the problem its a reminder that:

+)Your employer,

+)Your landlord,

+)Utility companies,

Are being too greedy.

It's because the productivity has fallen but the minimum wage has increased. Lots of jobs that used to be minimum wage job just don't exist anymore because they are uneconomic. Businesses are investing in AI to try and bridge this problem. In finance for example we used to employee people for data entry of invoices and expenses - there is no way we could afford to do that now, so instead pay for the tech that does it for us.

I’m struggling on my salary with the cost of living going up and so I’ve been looking at different jobs/careers - there’s hardly anything over £30k.
If I want to completely change careers I am looking at around £25k for very hard work to be able to get onto the ladder of that field.

My DC is at an age where they’re figuring out a career path and at a bit of a loss but I am not sure what areas I should point them in as I actually don’t know what careers are good ones anymore.

Over 25 years ago my first job paid £10k pa for new starters. The same job (it's public sector so easy to check and grade etc the same) is now £25k for new starters, it's not an entry level job or unskilled.

However the house we bought at the time, our first home, has increased in value (looking at recent sold price) more than 5 fold in 25 years. No surprise everything is unaffordable.

Agree with others minimum wage has rise but entry level salaries and even mid level have not.

This will eventually backfire as why would someone want to work hard in a graduate role for poor pay and crazy hours when they could earn the same or potentially even more on 35-40 hours at Tesco ?

My industry has a retention and recruitment crisis as it was/is very hard work for little financial reward bur rewarding morally. But people burn out or go freelance in a few years leaving a huge industry gap. Furthermore at least historically it paid more than minimum wage but as this has risen it’s now sometimes on a par. People simply don’t want to do it and I don’t blame them.

Someone I know went into working at a chain supermarket - he was sucessful And eventually became manager then regional manager then divisional etc. God knows what his title is now but we have the same degrees and he earns more than double what I do in my field of degree.

If I had my time again I wouldn’t do it. I earn well now for my industry but it’s taken me 13 years of swear blood and tears - often literally to get here on ver little pay. I wouldn’t do it again.

Totally agree

costs have risen hugely for employers with NI increases, costs of everything else

the economy is in a bad way

@MidnightMeltdown It is true that a majority of grads earn more. The better the university you go to, the more likely that is. IFS have studied this. However it’s university and subject dependent. So students need to choose very carefully. It’s not much good thinking your first from Oxbridge in Classics opens all doors if you have no work experience and want a very hard to get career. Most people with arts and humanities degrees need to curate their cv and be realistic about goals.

I don’t know how easy it is to ‘choose carefully’ with the way technology is going. Jobs are becoming obsolete faster than graduates can finish degrees. Knowledge based jobs will be hit particularly hard because humans will not be able to compete with AI. Knowledge is worth less and less when it can be obtained at the click of a button.

Employers will pay as little as they can get away with.

If it’s a booming economy and they are raking in profits, that will not necessarily translate to salary increases for the majority - unless there is a skills shortage or they’re struggling to recruit.

Thats why economic growth doesn’t necessarily translate to fewer people living on the brink of poverty or more people with disposable income. It doesn’t make rents more affordable. It doesn’t make utilities more affordable. The so called trickle down hasn’t happened for many years.

Blaming NMW or tax changes is a red herring. There is a small percentage at the top of the ladder whose wealth has vastly increased.

Agree! I spurted my tea reading that comment! I can only presume parents paid for student life or they are now pissing the money away!

I’m bloody grateful that my children are doing degrees with a guaranteed job at the end of them but if they don’t I would 100% be encouraging them to go abroad for work rather than stuck here unemployed.

I started with my current professional role on £11 K a year which in 1994 would be £24 K today. Indeed people entry level in my job (with a degree and post grad) start on £25 K so salaries have not risen at all. Yet rent, food etc all has. All the ‘young ones’ at my current place of work are living at home.

I’m not sure that things are necessarily going to be better abroad. Pay is better in the US, but they are having similar struggles in the sense that good graduates can’t find work. We are at the beginning on the AI jobpocalypse which is only going to accelerate if nothing is done.

The 2008 crash was 18 years ago.
The world economy has essentially been stagnant since then, with local variations: some places doing slightly better, some slightly worse. Britain is doing worse due to Brexit.
(World GDP has still been growing, but the rate of growth has decreased. The entire financial system is built on the expectation of a certain level of growth every year, forever, and if the rate of growth is too low, problems ensue.)

The reason for lack of growth in 18 years is lack of cheap oil.

Wage suppression.

It originally started during the Blair D-REAM glory days.
Browns miracle economy and introduction of working tax credits was a key factor i believe

NI had risen.
NMW has risen.
Business rates have risen.
Utility costs have risen.
Rents have risen
Export costs have risen

Companies are facing far higher costs so they have to cut back wherever they can....and that means salaries.

As an employee, PAYE has risen so we see less of the money we do earn.

A perfect storm.

I'm not sure about the reasons for the stagnation. What is evident though is that the richest on top have become even richer, the rest of us are still in the same place and that division is growing. As a result more and more people choose the benefit route as a top-up to their salary.
I am a freelancer, but my industry has been transforming due to AI. If I were to start a full-time job, it would probably be only ca. 25-28k + London commute. I've been looking at the job offers in my village and I would be better off baking cakes in the bakery here (and starting work at 6am which is great, as I would be finishing early).

Blame it on the tax burden. I have two employees and will shortly eliminate one role to save money. I will not employ more but will only take on people on a contract basis

You're right @caterpillar1

My salary in Central London in 2024 was £14k higher than I earn today. However with a 5 minute rural commute rather than train travel, no station parking charges and making my lunch at home during the time savings, I am better off. I've dropped a tax bracket, reduced my stress and regained 2.5 hrs a day🍾. Win-win.

NMW is the killer.
Employers can’t afford the further increase if gap between those on NMW and those with more experience/qualification. It is much much harder for employers to make a profit to live themselves. I’m obviously not talking about the Amazon ilk here.