Two thirds of 30-year-olds now earn LESS than their father, because the impact of the 2008 credit crisis still feels like a decade
- The average young adult now earns less than in 2005
- This makes it much harder for those in the early 30s to buy a home
- The impact of the 2008 financial crash is still being felt by the people of today
- In 2005, 56 percent earned more than their 30-year-old father – now up to 33 percent
It has long been seen as a sign that you make your own way in the world.
But today, two thirds of 30-year-olds fail to earn more money than their father did at the same age, a study found.
In 2005, more than half of young adults of this age had reached the milestone of earning a higher salary than their father.
People over 30 are less likely to buy a home than their parents due to the continuing impact of the 2008 financial crash
Researchers who have worked out the figures say that the 2008 credit crisis is probably responsible, and that the effects of the financial downturn can still be felt for a decade.
The average young adult now earns less than in 2005, which means they also have less chance than their parents to buy a house and access the property ladder.
A study co-author, Sumaiya Rahman, from the University of Surrey, said: “Many people measure their success by how much further they have gone in life compared to their parents.
& # 39; People notice if they don't have the same income, don't live in the same size as their parents and don't achieve what they have become and see as normal.
& # 39; These findings suggest that it has become worse for people in their thirties and forties in recent years, with the consequences of the great recession of 2008 that lasts for a long time and no sign that things are back to normal. & # 39;
Only a third of men aged 30 earn more than their fathers at the same stage of their lives – more than half in 2005
Researchers looked at the 30-year-old men who were fathers between 1964 and 1987 to calculate the income of the older generation. They did not look at the merits of women in this generation because there were fewer women working at that time.
These were compared with the average wages of men and women who were 30 years old between 1994 and 2017 to gain insight into the difference between fathers and their children.
In 2005, 56 percent of 30-year-old men and women earned more than their father at the same age. In 2017, that share had fallen to 33 percent of 30-year-olds.
The researchers discovered that 74 percent of 30-year-old men earned more in 2005 than their fathers, but this fell to 45 percent in 2017 from the same male age group.
For women, their father's share decreased from 43 percent in 2005 to 22 percent in 2017, indicating that the gender pay gap is still substantial.
The authors, who will present their findings at the annual conference of the Royal Economic Society next week, say that if wage growth would have continued at 2 percent per year, just as before the financial crash, 55 percent of 30-year-olds could expect have now caught up with their father's salaries.