The introduction of a national minimum wage in the UK in 1999 is widely thought to have brought about massive improvements in the fortunes of many people at the lower end of the pay scale.
According to a wide-ranging report compiled by the British government's official statistical compiler, the Office for National Statistics, it has contributed to workers who started their careers during that decade being paid an average of 40 per cent more than someone who took their first job in the 1970s.
Using data adjusted to take account of the differing levels of inflation over the past 40 years, it showed that the average worker who entered the workforce in 1975 would have to work between three and four years longer than someone who started work in 1985, and five to six years longer than an entrant into the workforce in 1995 to earn the same amount.
The end of the good times?
But the research also found that all three age groups had seen their earnings drop in real terms in the five years between 2009 and 2014. At their peak, the workers from the 1995 sample saw their hourly wage fall by 10 per cent. But the fall was even greater for the 1975 entrants into the workforce, at 12 per cent.
"Some of the decline for the 1975 cohort may be explained by people in their late fifties beginning to consider retirement, with the highest earners often retiring early," reported the ONS.
Women close the gap – but it still exists
In 1975, there was still no law entitling women to the same pay as men for carrying out the same work – that did not arrive until the following year, even though the first Sex Discrimination Act was passed in '75.
At that time, there were gaps between what men and women earned in all ages, but the disparity was widest in their late-thirties, when a man was likely to be earning more than 60 per cent more than a woman of the same age.
Now, women are paid broadly the same amount as men until they reach their thirties. By the end of their forties, however, the difference is at its highest, at about 45 per cent. London was found by the ONS to have the widest gap between the sexes' earnings, while it is narrowest in Wales – but this may be because the highest earners here take home the lowest of people in equivalent bands of anywhere in the UK.
Disconnection between wages and prosperity
Several factors contribute heavily to there being a lack of sentiment that younger people are better off than older members of the workforce – despite the figures suggesting so.
Prime among these is the difficulty for first-time buyers to enter the property market. A generation ago, house-buyers could reasonably expect to have to put down a 5% deposit to buy a home. Today, the financial markets turmoil means very few lenders are prepared to give funds to anyone with less than a 10% deposit. And that doesn't take into account the growth in house prices in the meantime, which has been far faster than the wages of just about everyone.
The Halifax Building Society has only been collating figures since 1983, but over the next 30 years, it found the price of the average house rose by 428 per cent – in London it was close to 560 per cent. These figures don't take inflation into account, but even with this in the mix, the price of the average UK house has doubled – up by 101 per cent to be precise – while in London, prices are 124 per cent higher.
Will there be a re-adjustment?
History suggests so. But at present, many people who have forecast a fall in property prices – or at least a bottoming out of the rate of increases – have yet to be proved right.
Meanwhile, a large proportion of young workers are becoming resigned to the idea of not owning a property until at least their 30s or possibly later.
As they say, though, there are only two certainties in life – death and taxes. It might be heartless to say it, but a large number of people in their 20s and 30s are probably thinking that they won't be able to share in the phenomenon of property ownership until a generation further up the age range succumbs to the former.
That's one reason why they're so keen to get themselves established in good jobs, and are starting to believe that there's more to deciding what is a good one than just the money they earn. After all, if it won't buy them a good home, then they're probably right to ask what other benefits can they get which aren't financial.
This post has been supplied by Edenred