Wage gap opens up between younger and older workers

by Guest Thu Jul 03, 2014 12:37 pm

Those who joined the workforce in 1975 have suffered the biggest wage falls during the financial crisis

People who started work in Britain in the 1970s have fared worse in pay terms over their careers than those starting out in the 1990s.

Workers beginning their careers in 1995 were paid an average of 40% more in real terms – when adjusted for inflation – in their first 18 years than those who started in 1975 according to a new report by the Office for National Statistics.

The difference in pay means that people beginning their career in 1975 would have to work up to four years longer than those starting work in 1985 to accumulate the same amount of earnings, and up to six years longer than those starting in 1995.

“On average, individuals who were 21 in 1975 have fared worse in terms of average pay over their career to 2013 than those who were 21 in 1985 and 1995,” the ONS said.

All three groups have suffered a fall in real pay since 2009, as inflation outpaced wage growth, driving living standards lower.

However, those who joined the workforce in 1975 have suffered the biggest wage falls during the financial crisis.

Average pay for workers starting out almost 40 years ago fell by 12% to £11.03 an hour in 2013 from a peak of £12.54 an hour in 2009. The equivalent fall for those who started out 20 years ago was a smaller 10%, to £12.72 last year from £14.12 in 2009.

“Some of the decline for the 1975 group may be explained by people in their late 50s beginning to consider retirement, with the highest earners often retiring early. This would bring down average pay before any consideration is taken of the wider economic conditions.”

The ONS said the pay gap between men and women under the age of 30 had “decreased dramatically” since 1975.

Wage inequality has also fallen since the introduction of the National Minimum Wage in 1999. In 2013 the highest paid employees earned 11 times more than the lowest paid, down from 13 times in 1998.

There are regional variations however, with wage inequality highest in London in 2013, and lowest in Wales.

http://www.theguardian.com/business/2014/jul/03/wage-gap-opens-up-between-younger-and-older-workers

Yep, and those are the ones who probably had final salary pensions changed over and no time to add more to the pot.