Younger workers’ wages worst hit by downturn
Men have been hit the hardest and suffered the biggest falls in wages as a result of the financial crisis, according to the Institute for Fiscal Studies (IFS).
The IFS report said that while the employment rate had returned to its pre-crisis levels, wages remain well below their 2008 peak. Median hourly wages in 2014 were still 4.7 per cent lower in real terms than they were in 2008.
However while pay rates for men were still 7.3 per cent down on what they were before the crash. Among women the fall has been just 2.5 per cent.
The IFS said one of the reasons for the discrepancy was that women were “significantly” more likely than men to work in the public sector, where pay has fallen by less than in the private sector.
Hourly pay rates
The report also found that while hourly pay rates had recovered to their 2008 levels for employees aged 60 and over, among 22- to 29-year-olds they were still down by 9 per cent.
The IFS also said that real median weekly earnings have fallen even more than hourly wages. By 2014, they were 5.9 per cent below 2008 levels. This reflects sharp rises in the relative prevalence of part-time work, rises which are now just beginning to be unwound.
The proportion of part-time workers who say they work part-time because they cannot get more hours is almost double its pre-crisis level. In addition, the proportion of 16- to 64-year-olds in work and working at least as many hours as they want was 65.7 per cent in the first three quarters of 2014.
