Resolution Foundation says drop in earnings for UK workers in their 20s is ‘unprecedented’
Millennial workers’ reluctance to job-hop is having an “unprecedented” negative effect on their pay and career progression, according to new research from the Resolution Foundation.
Only aquarter (25 per cent) of workers born in the mid-1980s moved jobs from year-to-year when they were in their mid-20s, found the report – half the rate of those who were born a decade earlier in the mid-1970s.
The Study, Work, Progress, Repeat? report found that each generation of workers – from those born in the early 1950s to the late 1970s – earned more than the generation before them during their 20s. But workers born during the early 1980s earned around £40 a week less around the age of 30 than those born 10 years earlier. It also found that people born in the late 1980s currently earn no more than those born 15 years earlier were earning at the same age.
As well as less frequent career moves, the Resolution Foundation said the halt in the increase of earnings could also be down to factors such as the 2008 recession, a shift towards working in low-paying sectors and the decrease in employers rewarding long service.
It said the decline in job mobility was particularly damaging for young people because the typical pay increase for someone moving jobs at that age was around 15 per cent, and decreases with age.
“One of the most striking shifts in the labour market has been young people prioritising job security and opting to stick with their employer rather than move jobs,” said Laura Gardiner, senior policy analyst at the Resolution Foundation.
“This may be understandable in a jobs market characterised by rising temporary work and zero-hours contracts. But with the typical pay rise for a job-mover in their mid-20s at around 15 per cent, and evidence that employers have essentially stopped rewarding their long-serving staff with real annual pay increases, such job loyalty can be very costly.”
The report also found that the growing number of workers in higher-paying sectors has boosted pay across all age groups, apart from those in their 20s. The rising share of workers aged 26-30 in low-paying caring, cleaning and leisure activities jobs has reduced typical pay packets, it said.
People Management recently reported on severalcommon myths about employees of different age brackets. Chef Martha Stewart has previously referred to millennials as “lazy, self-indulgent and lacking in initiative to be successful”, and the generation is often stereotyped as social media connectors who reject traditional career paths, don’t care for authority and have little interest in a job for life.
Gardiner added that although millennials have fallen behind the generation before them in terms of pay, they are still the most highly qualified generation ever seen in Britain. “Making the most of these skills will be the key to getting Britain’s longstanding social contract that each generation outperforms the last back on track,” she said.