2008 financial crash still effecting millennials’ pay
4th February 2019
By Esmée Hardwick-Slack
According to a study by the Resolution Foundation, millennials who entered the job market during the 2008 financial crisis are still suffering the effect on their earnings as they enter their mid-30s. Their pay has suffered the most out of any age group since the crash, with the study finding that the typical salary for workers in their 30s was still 7% below its pre-crisis peak last year, while the wages of the over-50s have recovered to levels above those seen a decade ago. Workers in their 20s during the financial crisis were by far the worst affected with their pay falling by 11% from 2009 to 2014 before recovering some lost ground after that.
A similar study carried out by the Institute for Fiscal Studies (IFS) showed that people in their 30s were earning £2,100 less a year than people in the same age group in 2008. Director of the IFS, Paul Johnson, 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.”
The Resolution Foundation also noted that if people in their 30s wanted to earn more should move to a different employer. This is because the study also found that those who have stayed in the same job in the 2018 had a real wage growth of 0.5%, whereas those who found a different employer saw an average increase of 4.5%. Nye Cominetti, an analyst at the foundation, said: “For workers of all ages looking for stronger pay growth, the outlook does offer clear evidence-based advice – ditch your current employer and enjoy a 4% ‘disloyalty bonus.”
The financial strain has also shown to have taken a toll on the mental health of those in the millennial age bracket. Last year, a study of over 1,000 adults by the American Psychiatric Association (APA) found that those in their 30s are the most anxious. The participants were asked about how factors such as finances, safety, health, relationships and the political climate impact their mental well-being. Almost three quarters of those aged 20 to 37 reported feeling somewhat or extremely anxious by the prospect of paying their bills.
Are you still feeling the effects of the financial crisis? Let us know in the comments or join the conversation on Twitter.