Young workers suffer the deepest pay cuts

The research shows that the wages of under-30s have dropped by more than 10 per cent

Young people are suffering from a "wages crisis" as well as a jobs crisis, according to research showing the under-30s have suffered much deeper pay cuts than older workers.

The under-30s were the first to "feel the pain" of the recession – and may be the last to benefit when the economy recovers, according to the Resolution Foundation think tank.

It warns that the 6.4 per cent reduction in annual pay for 16-29 year-olds between 2003-2010 has been overshadowed by the steep rise in youth unemployment to more than 1 million. The wages of 30-60 year-olds fell by 1.5 per cent over the same period, after inflation was taken into account. Young men, whose pay dropped by 8.6 per cent, fared worse than women under 30, whose wages fell 5.1 per cent. Women aged 30 and over, who saw their wages reduced by 5.8 per cent, did better than men in the same age group.

The foundation, which specialises in the "squeezed middle", found that the decline in young people's wages started well before the 2008 recession. Its research suggests that under-30s see a real terms rise in their wages only when the economy is booming, and are the first to feel the squeeze when growth slows.

Gavin Kelly, the foundation's chief executive, believes a big factor is that young people tend to be employed in sectors such as hotels, restaurants, retail and wholesale, which were struggling and saw jobs cut by technological change between 2004-2008 while the economy was growing.

"In the UK, youth unemployment is public enemy No 1," Mr Kelly writes in a blog for the New Statesman . "But when steady growth returns it is essential that we have a jobs market that sees wage gains reach all age groups. After the long fall, the young need a pay rise more than any."

He says the figures are "genuinely scary" because the performance of young people in the jobs market are seen as a barometer – or early warning signal – of the health of the wider economy.

The foundation believes that the wages of under-30s have dropped by more than 10 per cent since 2003 – and that it will get even worse as the double-dip recession bites. The think tank is worried that young people have become less attractive to employers. It believes the growth in part-time employment may be dragging down young people's pay. Another likely cause is the national minimum wage, since the pay of many young people is at its level or just above it. The minimum rate rose sharply between 1999-2003, but then levelled off in real terms.

Mr Kelly does not rule out migration to Britain being a minor factor – as young foreign workers drive down wages – but says there is no evidence that it was a primary cause.

The Office of National Statistics (ONS), which this week put average disposable incomes at their lowest level since 2003, said that "sustained population growth led to incomes being spread across a greater number of people, and therefore further reduced the growth of actual income per head over the period."

Damian Green, the Immigration minister, claimed the ONS had "confirmed that the population growth caused by Labour's uncontrolled immigration has reduced incomes". But Matt Cavanagh, a visiting fellow at the Institute for Public Policy Research, rejected that and said the latest study showed that immigration had a positive effect.

Arts & Entertainment
The original design with Charles' face clearly visible, which is on display around the capital
arts + ents The ad shows Prince Charles attired for his coronation in a crown and fur mantle with his mouth covered by a criss-cross of white duct tape
Sport
Steven Gerrard had to be talked into adopting a deeper role by his manager, Brendan Rodgers
sport LIVEFollow the latest news and scores from today's Premier League as Liverpool make a blistering start against Norwich
News
People White House officials refuse to make comment on 275,000 signatures that want Justin Bieber's US visa revoked
Sport
Mourinho lost his temper as well as the match
sportLiverpool handed title boost as Sunderland smash manager’s 77-game home league run
VIDEO
Have you tried new the Independent Digital Edition iPad app?
Voices
Sweet tweet: Victoria Beckham’s selfie, taken on her 40th birthday on Thursday
voices... and her career-long attack on the absurd criteria by which we define our 'betters', by Ellen E Jones
Sport
Mercedes Formula One driver Lewis Hamilton of Britain (front) drives ahead of Red Bull Formula One driver Daniel Ricciardo of Australia during the Chinese F1 Grand Prix at the Shanghai International circuit
sport Hamilton captured his third straight Formula One race with ease on Sunday, leading from start to finish to win the Chinese Grand Prix

Arts & Entertainment
Billie Jean King, who won the women’s Wimbledon title in 1967, when the first colour pictures were broadcast
tv
News
Snow has no plans to step back or reduce his workload
mediaIt's 25 years since Jon Snow first presented Channel 4 News, and his drive shows no sign of diminishing
Life & Style
food + drinkWhat’s not to like?
Voices
Clock off: France has had a 35‑hour working week since 1999
voicesThere's no truth to a law banning work emails after 6pm, but that didn’t stop media hysteria
Arts & Entertainment
Maisie Williams of Game of Thrones now
tvMajor roles that grow with their child actors are helping them to steal the show on TV
Arts & Entertainment
Kingdom Tower
architecture
Life & Style
Lana Del Rey, Alexa Chung and Cara Delevingne each carry their signature bag
fashionMulberry's decision to go for the super-rich backfired dramatically
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Apprentice IT Technician

£150.00 per week: QA Apprenticeships: This company is a company that specializ...

1st Line Technical Service Desk Analyst IT Apprentice

£153.75 per week: QA Apprenticeships: This company is an innovative outsourcin...

1st Line Helpdesk Engineer Apprentice

£150.00 per week: QA Apprenticeships: This company has been providing on site ...

Sales Associate Apprentice

£150.00 per week: QA Apprenticeships: We've been supplying best of breed peopl...

Day In a Page

How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit