Recent generations have increasingly been starting their careers in low-paid occupations such as bar staff, waiters, call centre workers and kitchen assistants, despite higher education levels.
As a result, young people have increasingly been relying on rapid progression from their initial jobs in order for their wages to catch up. The speed of progression has actually been rising for much of recent history. But for men born since 1985, the speed of job progression has slowed down as well – compounding, rather than offsetting, the increased tendency to start out in low-paid occupations. This all refers to trends visible before the impacts of the COVID-19 crisis.
These are among the conclusions of new research at IFS funded by the Alan Turing Institute. Key findings include:
- Men born in each decade since the 1950s, and women born since 1985, started their careers in occupations further down the wage ladder than their predecessors. For example, if we compare people born in the 1970s and the late 1980s: the younger generation of men were at least twice as likely to have been bar staff, kitchen and catering assistants or call centre workers in their first full-time job; and the younger generation of women were about twice as likely to have been waitresses or care workers.
- The increased concentration of young women in low-paying occupations at the start of their careers is a sharp reversal from the trend seen over previous decades. The starting position on the occupational ladder of women born in the late 1980s looked more similar to that of women born in the 1960s than to women born just slightly before them in the early 1980s. For men, the shift has been more gradual but has been going on for much longer.
- Men born since 1985 have not only started lower down the occupational ladder than their predecessors, but also climbed it more slowly thereafter. This slowdown in the rate of early-career progression marks another unhappy reversal. In general, rates of progression up the occupational ladder had been increasing in recent decades – and young men had been increasingly relying on rapid progression in order to ‘catch up’ after increasingly starting out at the bottom of the jobs ladder.
Robert Joyce, an author of the briefing note and a Deputy Director at IFS, said:
‘The overall mix of jobs in the UK has changed radically over the last four decades, with highly-skilled occupations much more prevalent in the modern service-based economy than in the past. But, despite rising education levels, the starting occupations of young people have defied this trend. They have increasingly been concentrated on the bottom rungs of the occupational ladder. For young men, this shift has been occurring for a few decades. For young women, it represents a sharp reversal for women born since 1985.'
‘Compounding this, we also find some support for the perception that there are increasing barriers to job progression. The speed of occupational progression in the early-career years has slowed down for recent cohorts of young men (though not yet for women). Hence, compared with their predecessors, they not only started lower down the jobs ladder but also climbed it more slowly thereafter.'
‘These are all trends we see before the COVID-19 pandemic hit. But they help shape the impacts of that pandemic: the increased concentration of young people in hospitality, for example, has made them more vulnerable to the economic effects of social distancing. And, in turn, the pandemic threatens to exacerbate some of the concerning trends. Job progression is likely to be much harder in an uncertain economic environment with reduced hiring.’