United Kingdom: Growing Pay Gap between Younger and Older Workers

The Trades Union Congress has released a report finding that, in the United Kingdom, the "generational pay gap"--the gap between the average earnings of 21-30 year-olds and 31-64 year-olds working an average 40-hour week--has increased in real terms from £3,140 in 1998 to £5,884 in 2017. In "Stuck at the start: Young workers' impressions of pay and progression," the TUC finds that

1. young workers are disproportionately affected by wage stagnation
2. young workers are concentrated in low-paying jobs
3. young workers do not have access to the skills development to get on at work
4. young workers are especially vulnerable to insecure work
5. young workers have no voice at work

The report also found that the overrepresentation of today’s young workers in certain industries has worsened the generational pay gap: "Jobs growth has been generally slower for younger workers than for older workers in the past two decades, but the growth that has taken place has been heavily concentrated in five industries: education; health and social care; hotels and hospitality; real estate, renting and business activities; and wholesale and retail."

Beyond raising the minimum wage, the TUC recommends that the government, among other things, (1) develop a strategy to improve wages, productivity, skills development and conditions in low-paid industries, by setting up modern wages councils that can require employers to act; and (2) give all workers, including young workers, the right to time off for training. It also recommends that employers "create genuinely flexible, well-paid, part-time work at all levels of an organisation, particularly for supervisory and managerial roles, so that parents do not have to give up spending quality time with family just to make ends meet."

Source: Trades Union Congress Press Release (June 4, 2018)