Wage Contraction
Discussion
Thought I'd spin this out to a new thread, but it's motivated by the £13 per hour skilled welder thread.
How come we've reached the absurd position where the minimum wage has risen, but skilled technical jobs (often time served) have not, resulting in a shelf stacking job paying the same as a skilled and experienced welder?
Another example - real world minimum wage is now about £25k per annum, i.e. a 40 hour week at £12 per hour, slightly above minimum wage but common as employers need to compete for employees in a tight labour market. Yet a job listing for a local environment agency Flood Prevention Officer, requiring shift and on call work (at no extra pay), and requires GIS and data science skills, only pays £32k per annum?
Any other insights of industries and careers that have suffered from this contraction, and explanations for why this has occurred?
How come we've reached the absurd position where the minimum wage has risen, but skilled technical jobs (often time served) have not, resulting in a shelf stacking job paying the same as a skilled and experienced welder?
Another example - real world minimum wage is now about £25k per annum, i.e. a 40 hour week at £12 per hour, slightly above minimum wage but common as employers need to compete for employees in a tight labour market. Yet a job listing for a local environment agency Flood Prevention Officer, requiring shift and on call work (at no extra pay), and requires GIS and data science skills, only pays £32k per annum?
Any other insights of industries and careers that have suffered from this contraction, and explanations for why this has occurred?
I would guess it's both supply and demand plus "fiscal drag" where people without much bargaining power get lower pay rises than those with leverage and state defined amounts (pensions, benefits, minimum wage) go up with RPI.
When I started work a reasonable graduate wage was about 16K, a good one was 20K and the other-world finance people were on 35-40K. There was no minimum wage then but when it did come in shortly after it was set at £3.60 an hour (1999). It took 16 years for it to double, to £7.20 an hour in 2016, but it has only taken three years to go from £8.21 to £10.42.
In the meantime I see "average job" graduate salaries have not doubled, nowhere near.
For example look at Average Civil Service EO grades (basic graduate entry level and published, so a good benchmark):
https://hansard.parliament.uk/Commons/1999-07-14/d...
17.5K in 1998
https://nationalcareers.service.gov.uk/job-profile...
28K in 2023
https://www.gov.uk/government/statistics/civil-ser...
(Note that "average" may be mean in one and median in the other - I don't think it matters for the point.
So while minimum wage has nearly tripled, the EO salary has not even doubled.
But, finance graduates are now starting on six-figure salaries, so they have broadly kept pace with the minimum wage increase.
Which I find interesting in itself. "Squeezed Middle" perhaps!
When I started work a reasonable graduate wage was about 16K, a good one was 20K and the other-world finance people were on 35-40K. There was no minimum wage then but when it did come in shortly after it was set at £3.60 an hour (1999). It took 16 years for it to double, to £7.20 an hour in 2016, but it has only taken three years to go from £8.21 to £10.42.
In the meantime I see "average job" graduate salaries have not doubled, nowhere near.
For example look at Average Civil Service EO grades (basic graduate entry level and published, so a good benchmark):
https://hansard.parliament.uk/Commons/1999-07-14/d...
17.5K in 1998
https://nationalcareers.service.gov.uk/job-profile...
28K in 2023
https://www.gov.uk/government/statistics/civil-ser...
(Note that "average" may be mean in one and median in the other - I don't think it matters for the point.
So while minimum wage has nearly tripled, the EO salary has not even doubled.
But, finance graduates are now starting on six-figure salaries, so they have broadly kept pace with the minimum wage increase.
Which I find interesting in itself. "Squeezed Middle" perhaps!
Countdown said:
Some Finance graduates may be starting on six figure salaries, (just like some lawyers) the majority aren’t. We pay £30k for a graduate trainee and AIUI that’s broadly the same as The Big Four.
Sorry, yes, I should have said "investment banking" ... that's what I meant by finance. Apologies. But your figures reinforce the point about graduate wages haven't gone up in line with minimum wage increases. I bet if you look back to 1999 it was around 16-20K for those trainees ... Flooble said:
But your figures reinforce the point about graduate wages haven't gone up in line with minimum wage increases. I bet if you look back to 1999 it was around 16-20K for those trainees ...
Agreed. My mate was an NHS Regional Managent Trainee and he was on £20k (early 90’s). I was a mere Trainee Assistant Accountant on £8k (APT&C Band 2) I left a job a few months ago and strangely been contacted by recruiters regarding the old position (clearly not reading my cv properly). I was shocked to see that the starting salary was the same as what I had originally started on 3 years ago. Considering I would have had an above inflation just as i left I was shocked. The job is within energy sector and on the engineering side of things so pay above average wages and it can take time (over a year) to fill positions I would not be expecting this
We are now in a position where there is little incentive for people to undertake necessary jobs such as Nursing or Police Officers, Paramedics etc which require years of training and a degree I believe in all those cases now because they can earn the same or similar in McDonalds by walking in and filling in an application form, infact by chance I was in a KFC yesterday buying lunch and I saw a woman being interviewed and it seemed more like the interviewer was trying to sell the job to the applicant.
Its this issue that inflamed the nurses so much last year and to some extent the junior docs, but it applies to a lot of graduate entry jobs
A person can get a min wage job emptying bins in the hospital, or for a couple of quid an hour more can be underaking life and death decisions, or managing a team.
The nhs now has a whole payband that cant be used because its below the minimum wage, because overall wage growth has not kept up with the lowest pay growth
A person can get a min wage job emptying bins in the hospital, or for a couple of quid an hour more can be underaking life and death decisions, or managing a team.
The nhs now has a whole payband that cant be used because its below the minimum wage, because overall wage growth has not kept up with the lowest pay growth
sawman said:
Its this issue that inflamed the nurses so much last year and to some extent the junior docs, but it applies to a lot of graduate entry jobs
A person can get a min wage job emptying bins in the hospital, or for a couple of quid an hour more can be underaking life and death decisions, or managing a team.
The nhs now has a whole payband that cant be used because its below the minimum wage, because overall wage growth has not kept up with the lowest pay growth
A person can get a min wage job emptying bins in the hospital, or for a couple of quid an hour more can be underaking life and death decisions, or managing a team.
The nhs now has a whole payband that cant be used because its below the minimum wage, because overall wage growth has not kept up with the lowest pay growth
Surely this isn't a new thing. When I worked for the civil service 20 odd years ago they were offering an ok salary to new graduates, but few stayed more than 3 or 4 years as the starting pay for new grads had to increase to be able to recruit anyone, and the pay rises were crap so new grads were coming in on mot much more than someone who'd been there a few years.
MaxFromage said:
ARHarh said:
It applies to a lot of jobs not just graduate roles. Business owners don't seem to have the same issue getting decent pay rises.
It's surprising there aren't more business owners isn't it? Everyone has the choice. Why wouldn't you go for the higher paid role?A lot of the business owners I know had one of these three behind them:
a) Came from money - so could always fall back on their family to bail them out if it went wrong
or
b) Were one half of a "power couple" with a partner earning 100K+ - so again, had a safety net if things didn't work out
or
c) Started it as a side hustle and had a job that they were able to flex around their own business to the point where they just gradually swapped around which one was their main job
(That is ignoring (d) people who don't really own a business, just contract through a limited company. I see that as basically a riskier/rewarding version of employment!)
there's a glut of grad's though. So you can hire them for about the same as 20 years ago. After that the grad has to make it happen if he/she wants the big money.
So 25 years ago a fairly standard grad job for a corporate might have been 16-18k, and a trainee electrician 8k. Now the electrician is 16-18k, and so is the grad.
So 25 years ago a fairly standard grad job for a corporate might have been 16-18k, and a trainee electrician 8k. Now the electrician is 16-18k, and so is the grad.
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