Men and younger employees see largest falls in pay

Female employees, older workers and low-paid staff have seen smaller real wage falls than male employees, younger workers and those on higher pay, according to research by the Institute for Fiscal Studies (IFS).


Its Green budget 2015 report, which surveyed 180,000 UK employees and is produced in association with the Institute of Chartered Accountants in England and Wales, found that male employees have seen larger falls in pay than female counterparts, with real median hourly wages falling by 2.5% for women and by 7.3% for men between 2008 and 2014.

According to the report, part of the explanation for this is that female employees are significantly more likely than men to work in the public sector and, so far, mean earnings falls have been smaller in the public sector.

The study also found:

  • For respondents aged 60 and above, median real hourly pay in 2014 returned to its 2008 level, but for those aged 22-29 it was 9% lower than in 2008.
  • Salary inequalities have narrowed, with the 10th percentile of the hourly wage distribution (10% of employees earn less than this wage level) standing 3.3% lower in real terms in 2014 than in 2008, while the 90th percentile was 6.4% lower.
  • Real median weekly earnings have fallen more than hourly wages. By 2014, these were 5.9% below 2008 levels.
  • Wages have fallen despite a continued trend towards a more highly educated and older workforce working in more skilled occupations. Trends in average earnings since the crisis, including over the past two years, would have looked even worse if workforce characteristics had stayed the same.

Jonathan Cribb, an author of the report and research economist at IFS, said: “Almost all groups have seen real wages fall since the recession.

“The pay of young adults remains well below its pre-crisis level after particularly large falls between 2008 and 2011, while the average pay of those aged 60 and over has already recovered. Women have seen much smaller falls than men.

“Falls for the low paid have been somewhat smaller than for those on higher pay, driven by trends since 2011.”