The substantial impact of the financial crisis has left people’s wages 3% below what they were a decade ago, new research reveals.
The analysis done for the BBC by the Institute for Fiscal Studies shows that on average people’s real annual wages are £800 lower.
And that people who are aged between 30 and 39 now are earning £2,100 a year less than people of the same age group in 2008.
That’s a drop of 7.2%.
For those in their 20s, the decline is 5%, compared with the drop for the over-60s in work of 0.7%, or £130.
At the time of the financial crisis in 2008, the average wage was £24,100.
In 2017, it was £23,300.
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Paul Johnson, director of the IFS, said: “The average earnings of those in their 20s and 30s fell especially sharply in the immediate aftermath of the recession, perhaps as employers were able to cut starting wages more than wages of those already in work.”
While this age group has seen earnings growth in recent years, it has not been “enough to make up for initial losses,” he said.
Mr. Johnson added: “Pensioners have done much better than younger people on average. In part, this is because they are less reliant on earnings and so haven’t suffered from falls in earnings.”
In addition, however, “government has chosen to protect the state pensions and other benefits received by pensioners,” Mr. Johnson said.
Even more stark is the analysis from the IFS that, if wage growth trends between 1998 and 2008 had continued, people would on average be earning £3,500 more.
That’s 15% higher than today’s average figure.