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.

Elite auction houses and art galleries paid much lower than the private sector even decades ago. Interesting jobs but required a monied background even then.

So I started work at 18 in 1989. My company paid me a full time salary and I attended college 1 day a week to gain first an HNC and then a BSc. My starting salary was £10K…I just put it into an inflation calculator and it would be equivalent to a salary of £26,796. Maybe I was lucky, but I had the pick of two jobs at the time similar salaries and offering the same training route. I despair for my 18 and 21 year old DC.

Unfortunately, things are getting worse for each generation. As an older millennial, I always thought that we got a really shit deal compared to Gen X. Now I look at Gen Z and realise how much better we had it than them. I took out a plan 1 student loan which I easily paid off by the time I was in my early 30s. Now they have 9k fees and will be stuck with a lifetime of student tax in top of crap wages and high living expenses.

@MidnightMeltdown The lesson to be learned is that students must choose course and uni wisely. The loans are better value for high earners. Ones that do not start on £26,000 a year. Plenty do earn that and if living at home, it’s not awful. They also need to choose careers with a defined future. So thought is needed about what route and what job.

We cannot have 37% of pupils going to university and then whinge about costs. We have allowed the uni sector to become a behemoth and all sorts of dc go when they probably should not. The state pays up front for the loans. Why should the state write off this level of funding to the tune of 50% as it has been? Even now they expect 25% written off on this plan. That’s £billions and billions! Do these people need a degree? Probably not. Working up via a HNC was a better route and we need to scale back on degrees and promote HND/C and work.

Minimum wage has risen fast, but a lot of mid-level private sector salaries have basically flatlined.
Employers are quietly compressing pay bands instead of lifting wages across the board.
Result: more responsibility, experience and stress… for barely more than minimum wage, especially in the South East.

But when you have jobs such as a PA/EA or office administrator requiring a degree these days people won't opt for an HND/C. The job market has changed, more and more companies require a degree even for the entry level roles.

I say that as an EA with a degree. But one who actually started working 20 odd years ago at 18 without a degree or A'levels. I would dread to think what I'd be doing if I was in that position as a 19 year old now because I certainly wouldn't have had the opportunities to do the jobs I did back then now.

Of course students should choose their course wisely, but it is not that simple given the pace of change in the employment market and how quickly skills are becoming obsolete. Just a few years ago people were told to do computer science for a well paid job - and now these graduates can’t find work.

Again, very easy to say don’t do a degree, but the vast majority of employers still require a degree for a basic entry level job that would have been done by a school leaver a few decades ago.

Remember that these decisions are being put on the shoulders of people who haven’t even reached adulthood yet. Kids are making A-level decisions which affect further education opportunities at 15 or 16 years old.

I chose my course carefully (STEM) and it hasn't done a great deal for me. Massive waste of money to be honest.

I chose wisely. A clear guaranteed career path, good progression, good top salary (at the time). Now at that top salary and it really doesn't feel even close to the relative level of pay it should be. If I'd known wages would stagnate like this I would have chosen something completely different. Might as well have done something I genuinely enjoyed, ok it would have been for less money, but also a lot less stress and sacrifice.

I said to DC: jobs are so unstable these days, you may as well pursue what you love. Gone are the days of joining a well-established company as a graduate and working through the ranks. Both DC are in notoriously poorly paid professions they love. One is earning more than most of his friends and the other is earning slightly less but with fewer hours (though lots of stress.) But the pay difference is not as great as it once was, between arts, education and industry and the professions (medicine, law, finance etc)

These are some of the problems:

Over supply of graduates flooding the market

Unrealistic expectations of employer and employee

Too many expect a work life balance from the get go results in a poor work ethic. It needs to earned.

Employers no longer expect loyalty so pay as low as they can. Preciously they paid higher because they saw the employee as a long term investment.

Benefits. Too many view them as a suitable fall back. Again destroying employer/ employee long term relationship through lack of trust

Americanisation of companies and overreach of HR

DEI. Has been detrimental to everyone. All people want a job on merit and not a tick box.

High taxes

I don't know how much of this is true. When I was starting out in 1990s, work life balance was way better. Many professions took long boozy lunches and Friday afternoons were happily assumed to be write-offs. Many meetings were much more sociable and convivial. I remember going to amazing parties at the homes of some of DH's clients, even being invited for weekends with them. DH often took clients out for long lunches in gorgeous restaurants on expense accounts. And many of the best ideas and deals happened in the pub across the road where different departments got together, and chatted and came up with new projects that really worked.

In those days, the atmosphere was more: let's enjoy work. People worked very hard but they didn't feel like a joyless, punitive workload was being forced on them.

These days so many firms cut staff and expect remaining staff to just take on the extra workload. Or promote in name but not salary. How can they expect loyalty when they seem to care only about profit?

@Tonissister Why do you expect a firm to carry on in business if it cannot make a profit!? Of course companies care about a profit. Owning a company is taking a risk.

And by the way, little of what you say applied to dh running his own business. He worked hard, and so did his staff but they paid well because they made very decent profits. No they didn’t go out for long boozy lunches. They aren’t much different now - DH has retired - but they don’t make anywhere near the same profit. There are various reasons for this. Contracts are very sharply priced. Company has changed course as people retired and new staff don’t engage in the same way in higher paying work. The senior people don’t want high earnings enough. They like coasting - it suits them. They don’t want to take risks and don’t back themselves to do difficult high paying work. They don’t market effectively. They tick over nicely and don’t argue!

I guess many firms have realised they needed to make more money as overheads went up and up. Clients ability to pay went down and down at the same time. Government regulations have increased and every little element about an employee is scrutinized to get more out of them. Interestingly they don’t as uk productivity is poor. A more live and let live culture seems better apart from having to crack down on piss takers. We are losing our entrepreneurial spirit because we like 9-5 and low risk.

I started in the City in 1988. Long lunches were common, but so were very late nights. It was very much work hard play hard, but we worked incredibly hard and the lunches were work too really. They weren't optional.

Also, productivity is starting to increase. Research has shown that AI is significantly increasing productivity in the UK, but it’s also leading to job losses. The trouble is that increased productivity doesn’t automatically lead to increased pay for workers. It usually leads to increased profits for the rich.

I also think working from home hasn't helped with wages. Why would a company pay top salaries when they can justify the poor pay rises with the prospect of working from home. It's a carrot to dangle in front of people. They no longer have to pay extortionate train fares every day, or drive to the office every day.

I had something similar said to me the other day from a recruiter, you're closer to home so will be spending less on travel, so the low salary isn't an issue. It's like matching my salary to my experience doesn't matter because I'll be based at an office closer to home and only required in 2 days a week. The salary was shit for the job (EA to a CEO) but someone will take it.

It’s not true to say all costs borne by business can be passed on to the customer. If that was the case, we would have raging inflation. Unfortunately a lot of costs are borne by employers and to some extent their staff. Companies don’t want to lose good staff but customers won’t pay inflated prices either. The government needs to stop putting up costs. However it’s now putting up the cost of the graduate loan repayment scheme. It’s a total assault on everyone who is not on benefits. These are the people paying for benefits!

The problem is there are a number of mid earning careers that absolutely do require a degree. My understanding is mid earners will pay the most in the end. You need to get to around 60k to start properly paying it off. The average graduate salary after 5 years is 45kish

Theres whole heaps of teachers, medical adjacent professionals that earn just below this 60k. Also the much coveted stem - well lots of jobs in stem earn less. engineering isnt paid as well in the uk as other countries so getting over 60k quite a long way down your career path.

Our uk school leavers arent just competing with each other for jobs in interesting careers, companies will employ people from abroad to fill roles so you end up with a local with a levels v a Canadian with a masters if we dont educate our own workforce.

I agree we used to have a much bigger and better hnc/d system and I think this should be embraced again but that system was never free to the tax payer. It required government funding and employer support.

They could increase taxes more if that was really what they were trying to achieve. A more reasonable hypothesis is that they are trying to raise just enough taxes to pay for the services people want without accumulating too much debt.

you realise that other people have to go out to work and pay tax to pay for your benefits?

Employees cannot afford to be loyal; no employer is loyal to them

People talk raising tax to pay for ‘ services’ people supposedly want…. but a lot isn’t going on service's , billions on debt interest , so much waste across government, with low productivity . This week reported we face a £100m bill for failing to cancel Rwanda scheme on time .
One issue that isn’t talked about enough is that time sacrifice those in work are making to pay for all of this. It’s taxpayers money- and time they give to pay for all this incompetence and largess. Most welfare benefits aren’t taxed… so workers shafted for tax , recipients tax free.

@TinselTarts It is attitudes like yours that makes tax payers despair. We’ve become a society thst doesn’t see work as important and many people accept £25,000 as a starting salary. Doesn’t mean they stay on it! It’s sad that these people are paying for others to sit back and do nothing. No one used to do this when I was growing up.

I work, have worked since I was 16, and am a higher rate tax payer.

My point is, I would rather go on benefits than meekly accept a 25k salary and be grateful for it, with an employer that thinks they own my soul!

And yes, for some it is a starting wage, but as I'm sure you've read on this thread, many are stuck on it and lots of employers offer it as a wage for people highly qualified and with lots of experience.

We need to stand up to these companies and tell them how shit their pathetic offering is. Otherwise wages will never grow in this country!

What bargaining power do you think individuals have? They simply don’t. Who is going to pay over the odds for a graduate who they don’t really need? Of course most jobs requiring a degree start at a higher salary, eg most trainee lawyers, teachers, nurses and many more. The ones who take £25,000 are in jobs where the employers don’t really need grads.

These days, higher rate tax payers are classroom teachers. That’s how much our tax regime hits working people.