Wednesday, November 22, 2017
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Young Workers get Brunt of Pay Cuts

Resolution Foundation

Research from the Resolution Foundation think tank has revealed that it is workers under thirty who have, and often are, the first to feel the pain of cuts as well as the last to receive an increase in pay after a recovery.

In fact their research has suggested that even before the start of the recession that hit in 2008, workers of this age group had already started to experience pay cuts. Compared to older age groups their pay cuts have been more severe and last a lot longer.

Over recent years the news has focused very much on the rising figures for youth unemployment. Little attention has been paid to the fact that even those young people who are in fact working, have been suffering also. Between the years of 2003-2010 there has been a 6.4 per cent decrease in pay for sixteen to twenty nine year olds. This is compared to only 1.5 for thirty to sixty year olds over the same period. The difference isn't just age related either. Young men experienced a loss of 8.6 per cent compared to women of the same age group who suffered a 5.8 per cent drop.

Chief Executive of the foundation, Gavin Kelly, believes the problem to be caused to some extent by the sectors in which young people tend to be employed within. Often younger workers are found in hotels, restaurants and retail for example. These sectors in particular have struggled over previous years due to advances in technology that have caused cuts to pay. Commentators have argued that although youth unemployment can be described as public enemy number one, once that is tackled then we need to see pay increases across the board. Since young workers have struggled the worst and for so long it is essential that they too reap the rewards when things do start to improve.

The figures for youth employment wages are made more scary by the fact that they are often used as a barometer for the economic situation on the whole. There are a number of things that have affected the wages of young workers over the years, not least the minimum wage which hasn't had as significant an increase as it had had in the previous decade. Of course migration will also have an effect to wages also to some extent. What is most worrying, however, is the idea that younger workers may not be as attractive to employers as they once were. Younger workers require more training, they cost more because they need to be developed. However, a lack of training now will cause other problems further down the line as employers face a skills gap.

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