People born between these years getting pay bump | Personal Finance | Finance
Some of Britain’s workers are enjoying a surprise boost to their pay packets, bucking years of gloomy predictions that they would be worse off than previous generations.
New research from the Resolution Foundation shows that workers born between the late 1990s and early 2000s are earning more in their mid-twenties than millennials did at the same age – and, in some cases, more than any generation stretching back to the 1950s. The findings offer a rare piece of good news for younger workers after years of concern that soaring housing costs, sluggish economic growth and higher taxes would leave Generation Z facing the same living standards squeeze that hit millennials.
Analysis by the think tank found that real weekly earnings at age 24 for those born in the late 1990s were 12% higher than for people born in the late 1980s.
Even more strikingly, those born in the early 2000s are earning more at age 24 than any comparable age group going back more than 70 years.
The report suggests Gen Z has benefited from a modest rebound in wages after the financial scars left by the 2008 banking crisis that blighted the careers of many millennials.
Millennials, generally defined as those born between the early 1980s and mid-1990s, became the first generation in modern times not to enjoy higher disposable incomes than their parents.
Their working lives began against the backdrop of the financial crash and a prolonged period of weak wage growth that followed. But the Resolution Foundation said newly available data indicates that Gen Z’s early career prospects have, so far, been stronger.
Charlie McCurdy, senior economist at the Resolution Foundation, said: “The living standards stagnation of the millennial generation has been well documented over the past decade.
“Many have speculated that the breakdown of generational progress has continued for Gen Z too. But with the oldest members of Gen Z now several years into their working lives, the good news is that they’ve enjoyed a mini pay rebound. By age 25, Gen Z workers were earning more than anyone born since the 1950s were at that age.”
However, the think tank warned that the improvement could prove short-lived. It said higher energy costs and weaker economic growth linked to conflict in the Middle East risk triggering another squeeze on household finances, with real wage growth in the private sector already weakening since last autumn.
There is also mounting concern over the number of young people who are not in employment, education or training – known as NEETs.
The number of 16 to 24-year-olds in that category climbed above one million earlier this year, according to the Foundation, underlining the challenges facing a significant proportion of younger Britons.
Mr McCurdy warned: “But this good news story for Gen Z is already threat. For a start, the higher prices and weaker economic growth resulting from war in the Middle East are threatening a fresh squeeze on pay packets. Even more worryingly, a million 16-24 year olds are currently not in employment, education or training.
“Getting to grips with Britain’s NEETs crisis is crucial for getting the careers of more Gen Z workers off the ground, and ensuring that they too can outperform their millennial predecessors when it comes to wages and wider living standards.”
