UK millennials have suffered the second-worst falls in their earnings of any of the dozen advanced economies surveyed by a think tank over the past decade.
In a new report, the Resolution Foundation calculates that average real hourly earnings for under-30s in Britain fell 13 per cent between 2007 and 2014.
Only Greece, where real earnings slumped by 25 per cent over the same period as the eurozone country plunged into depression, saw a worst performance for this age group among the dozen advanced economies Resolution analysed in the latest research from its Intergenerational Commission.
British millennials experienced bigger earnings falls than other crisis-hit southern eurozone states such as Portugal and Italy, where they fell 12 per cent and 6 per cent respectively.
Average earnings for Spanish millennials fell by only around 2 per cent.
Resolution also found that the gap between the pay performance of UK millennials and workers aged between 50 and 59 was particularly pronounced, with older UK workers seeing their pay fall by around half the extent of the younger group.
In Italy and France the declines were roughly in line. In Germany, Spain and Italy the older group of workers saw larger pay declines than millennials.
“The pay squeeze has been deeper in the UK than in most other places, and more focused on young people in particular,” said Resolution.
However, the jobs market for UK millennials was, in other respects, much healthier than in other countries.
The under-30 unemployment rate rose by only around 2 percentage points over the period. In Portugal it shot up by 12 percentage points and in Italy by 16 percentage points.
In Spain and Greece the millennial jobless rate jumped by around 26 percentage points.
“The UK has traded off more pay growth for younger workers than other countries with similar youth unemployment experiences,” said the think tank.
Another major finding from the study is that millennials in the UK, relative to younger people in other high-income countries, have experienced a pronounced “bust” in rising living standards, following a long “boom” of generation-on-generation advancement in previous decades.
“Only Spain echoes the UK experience [of] a ‘boom and bust’ income cycle where significant generation-on-generation gains for older generations have come to a stop for younger people,” said Daniel Tomlinson, a policy analyst at Resolution.
OldGoldMould on February 19th, 2018 at 18:22 UTC »
It's not just the fall in income either (starting salaries for grads seem to have been the same for about 15 years). The UK has some serious intergenerational inequality which is starting to create serious social problems.
People are paying back student debts, so are losing that part of their income too
Housing is astronomically expensive. In areas with jobs, average house prices can be 10-20x local wages. We have dropped from 70% of 25-34 year olds owning a home in 1997, to 25% today (!).
The norm for a 20-30 year old is likely renting a bedroom in a house with others (and shared facilities). Unless you are in a couple - this is how millennials live. 20% of our housing is owned by 'buy-to-let landlords', who charge a fortune for very poor accommodation. They typically rent off boomers, stoking the intergenerational unhappiness. The number of 25-34 year olds renting has doubled in less than ten years. Doctors and lawyers are living like this.
People can't afford to have children, and the birth rate for UK-born people has fallen off a cliff. If you can manage to afford an extra bedroom, you then need two incomes to pay for it. This means you need childcare - and we have some of the most expensive pre-school childcare in the world. You are looking at £1-2k per month, per child. People can't afford this.
Retirement age has been increased, and the defined benefit pensions older generations have no longer exist. My minimum state retirement age is likely to be 70.
All in all, it's a bit of a disaster. We have an ageing population whose focus is protecting the final 20 years of their life, regardless of the consequences for everyone else. It's not brilliant, and those born after 1985 are now starting to kick off as they hit their 30s and realise their lot is unlikely to improve.
This_Is_Drunk_Me on February 19th, 2018 at 14:13 UTC »
I totally forgot about Greece. What happened with them?
Pr00fmaster on February 19th, 2018 at 13:54 UTC »
Disposable income has been at a halt in the past 3 years and when adjusted for inflation it would make sense.