Insight

Career Talk

/ 3 months ago /

 Article by Jessica Murray

The generational pay gap is a thing and you need to know about it

We’ve all heard of the gender pay gap. You’ll often see the issue trending on Twitter when we find out that Ryan Gosling earned more than Emma Stone, or Huw Edwards earns more than Fiona Bruce. And while of course a gender pay gap in 2017 is an issue that direly needs addressing, a slightly more pressing issue for young people is one you might not have even heard of: the generational pay gap.

Recent research has shown that our generation is the first that will earn less than our predecessors. The Resolution Foundation found that today’s under-35s earned £8,000 less than their parents did at the same age. Unlike our elders, we’re unlikely to ever be able to afford our own house, or create a substantial pension fund.

So the next time someone tries to tell you that the only reason you have no money is because you’ve spent it all on avocado-on-toast brunches, skinny chai lattes or the latest Apple gadget, whack out these stats and prove them wrong. Complaining about our situation doesn’t make us just ‘whiny millennials’; in fact, we won’t be the only ones complaining when no one is earning enough money to pay enough taxes to fund the NHS…

How did this happen?

generational pay gap

2008, that’s what happened. And that big old financial crash which has been the cause of so much trouble and strife. A fall in wages and sky high rent prices have affected our generation considerably more so than others. Recovery has been a lot slower than predicted, and with Brexit looming just around the corner, it seems unlikely things are going to change anytime soon.

It’s not much consolation, but it’s a very big case of being in the wrong place at the wrong time – for about ten years or so. But if we’re going to fight for a better future, we need to know how much worse off we are right now.

How come other generations weren’t affected?

Of course, everyone was affected by 2008’s financial crash. But older generations have actually seen income rises, and it’s only the younger generation who have been seen their wages drop. Research shows that from 2007/08 to 2014/15, incomes for those over 60 rose by 11 per cent, while incomes from those aged 22-30 fell by 7 per cent. Those in the middle, aged 31-59, saw no change in income at all. Yes, it’s not exactly great for anyone, but the youngest generation have borne the brunt of the aftermath.

Other factors haven’t helped either. High rent prices have left young people unable to save up for a house, while low inflation figures have made it easier to pay off a mortgage (if you’re able to afford one in the first place). Older generations are in a better position to save up money and accumulate wealth, whereas a huge portion of young people’s wages goes straight on rent. Fun, eh?

Why is this not being talked about?

generational pay gap

Salaries are a big taboo in British society. One of the main reasons young people aren’t talking about it is simply because they don’t know it’s happening. A lot of graduates are clueless as to what kind of starting salary they should expect, or are happy to accept whatever they’re offered, too afraid to ask what their colleagues are receiving. There have been campaigns for more dialogue and openness in certain industries, such as journalism where young people are particularly exploited, but a lot more work needs to be done before this topic forms part of the national agenda.

Another problem is that other issues relating to young people often take centre stage in the media. Rising student tuition fees and the scrapping of maintenance grants (quite rightly) received extensive coverage and provoked national outcry. And while we should be campaigning for change in higher education, we shouldn’t neglect post-university life. The generational pay gap is a more complex issue, more of a slow-burner if you will, but it’s likely to have a much greater impact on our livelihood and economic status in the long run.

A combination of a lack of public knowledge and a fear of speaking out, therefore potentially annoying both current and future employers, has led the topic to become a no-go zone. And if young people aren’t aware of the problem, they can’t speak up about it.

It’s time we stood up for ourselves

The main problem we as young people face is a society which often doesn’t take our concerns or struggles seriously. A large chunk of the older generation still view us with that ‘You’ve never had it so good’ scorn, and our genuine grievances are often palmed off as whinging. In a society in which young people are often neglected by those in power, it’s time we started standing up for ourselves.

We need to break down the taboo surrounding salaries and money if young people are going to become empowered enough to demand change. We need an economy, a country and a Brexit which keeps our concerns at heart, so we’re not left disproportionately worse off like we were after the financial crash.

We need a fairer and more accessible society in which young people are given a good wage and a fair deal – a society in which we can afford to buy a home and prepare for our retirement. It’s no mean feat, but it’s about time we at least put the issue on the agenda.

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