The Rich Got Richer?

Samsonite1

One thing I have observed regarding salaries since the economy crashed is that many salaries went up. As I have been a consultant during this period, I have worked in many companies and seen pay rises to be common-place throughout this time. There is a balance though - if you split a company into senior or junior positions (e.g. 50/50), it has been the senior half that have received pay increases and the junior half have in many cases been made redundant (or gotten rid of somehow) and replaced (eventually) with cheaper graduates or even apprentice scheme school-leavers.

Does this ring true with anyone else? I mean, I have worked in around 100 companies during this period (although predominantly in London) and saw this in every single company.

I can only assume that these companies figured that they need to keep the really experienced people (so let's wedge them up) and the "ground crew" can be replaced by cheap workers because cheaper less experienced people can learn their jobs really easily right?

My observations in the past couple of years are that this has back-fired because it was the "ground crew" that did the majority of the work required to run the businesses and hiring cheaper talent has made the quality of the work sub-standard. Profits are hit by clients not wanting to pay for shoddy work and even jumping ship after no real improvement.

As the title suggests, in terms of seniority and inference that senior people get paid more - the rich got richer and the poor got poorer. This also causes a big gulf in salaries with senior people on huge salaries and the others on a pittance...

lisyloo

It doesn't match my experience.
I don't doubt your wealth of experience, but I guess you haven't worked in a company like mine.

I work in IT and my deparment has been 85% offshored (to India) over the last 15 years. We haven't had payrises for the last 5-10 years and most UK people are senior. Most people are on decent incomes already so aren't facing harship and most don't want to lose their long service benefits, employement rights and flexible working arrangements which suit them nicely (for example there are a few mothers on 4 days weeks who'd find it hard to move to another firm). Also (if not obvious) they aren't the most ambitious.
The company either can't pay more, doesn't value the expertise or thinks it's being clever playing hard ball and treading a fine line.
Our US CEO actully thinks we're pretty lazy compared to US/India staff. We take more holiday and work fewer hours so he's not a big fan.

IT salaries don't seem to have moved up either e.g. a permanent senior developer has been about £45K -£50K as long as I can remember.

We are finding quality of work is shoddy, but it's very hard to quantify to the bean counters.

I don't doubt your experiences at all, but mine is a slightly different case.
All my colleagues in similar roles are having similar experiences i.e. no pay rises, redundancy rounds.
There is promotion for a few "stars" but generally a lot of extra responsibility for any extra money.

Running_Horse

Not true where I work on salaries, but somehow the deadwood at the top always miss the cut when it is time for redundancies.

PasturesNew

I (used to) work in IT (when there were jobs I was able to do). But then there was a crash in the contracting market (2000/2001) and I've not managed to get back in since.

The job I was doing in 1997 paid me £17k. If I go to that company's website and look up that job they're paying £17k and now want a degree.

I've seen this in many jobs. Everyday jobs to "get back in" want (not require) a degree. Middle jobs are taken by people with a degree and "very specific/relevant/identical" experience. Top jobs are always all right if you're in the boys' club.



Most regular jobs now are as close to NMW as they can get away with as so many people load up salaries with WTC/CTCs etc. But, as a single household, it means most regular jobs now don't pay you enough to live the sort of lifestyle that would make it easier to progress (e.g. the cost of looking smart and doing activities so you're able to converse with people at a level beyond "watched Coronation Street last night, stayed in".)

My CV for hobbies would just say: sitting on my 4rse on the sofa, naked, so I don't wear out the few clothes I've got.

Graham_Devon

Not sure about the rich getting richer in all cases - they appear to be (at least) staying the same.

What can be said is those below them are getting a far worse deal than say 10 years ago.

Take just a couple of people in my immediate family for example. one has just been given a promotion but no extra pay. Basically she's taking on aspects of the managers job but staying on the same level of pay. She's supposed to be "excited" about it all, but very hard to be excited when you are on 18k a year and you are replacing a 3rd of the work someone on 65k a year did for no monetry benefit to yourself. The employees there work under the constant threat of redundancy and re-org, so taking on new roles is key to keeping your job. This threat appears to work well.

Another family member has undergone 3 re-organisations in the past 6 years. Each time undergoing a TUPE and ending up twice taking a pay cut to keep the same job.

Like PN, I find that jobs pay the same, if not less than 10 years ago. I've said before a job I used to do for decent money is now near advertised at nearly a 3rd less pay. People jump at it though. It's now clearly designed for the maximisation of tax credits. The selling of the job isn't any longer about pensions and pay. It's about flexitime and childcare vouchers. Basically selling it to those who have a family but don't need to live on the salary alone as they will get topped up for their 30 hours.

Appears to me that the over arching culture is that when a senior member of staff goes, they get replaced, but their level of pay doesn't. Someone else does the job for less. Significantly less in some cases which does either question the current system of tax credits and what people are willing to take, or question the level of pay for those nearing retirement if someone else on a 3rd of the money can do the job.

One thing that should be looked at is the abuse of the NMW. Looking on job sites it's completely and utterly abused.

CLAPTON

Graham_Devon wrote: »

One thing that should be looked at is the abuse of the NMW. Looking on job sites it's completely and utterly abused.

however does one abuse the NMW ?

Thrugelmir

Samsonite1 wrote: »

My observations in the past couple of years are that this has back-fired because it was the "ground crew" that did the majority of the work required to run the businesses.

Technology has removed the requirement for much of the ground crew. Often the jobs that remain are specialised or require legacy knowledge.

Graham_Devon

CLAPTON wrote: »

however does one abuse the NMW ?

It's become "the" rate of pay in many areas.

In one local company all staff bar management are on NMW + 13p.

Doesn't matter if they are serving at the checkout, stacking the shelves, ordering items in or running the website ordering system - all are on that level pay.

All are also on no longer than 30 hours a week (again, bar management).

Tax credits is the main income for most of the people employed there.

That's how it's abused. Put the job up at NMW, with the right hours and people will flock to it. The wage itself is of little relevance to those these jobs are aimed at. It's the times for most and the correct amount of hours.... tax credits and housing benefits etc will do the rest.

What's more, people opt out of the pension. At £3 a week it's not worth it, so savings to be had again for the employer so long as they plan it right.

Tesco policy is the complete reverse. Look at most of their part time jobs and they are 15 hours at a higher rate of pay, precisely to attract the child free older workers with less ties. The 15 hours doesn't qualify for the benefits. That one extra hour needed for the benefits rules the job out for great swathes of people. The higher rate of pay doesn't come close to a NMW job with added tax credits.

CLAPTON

Graham_Devon wrote: »

It's become "the" rate of pay in many areas.

In one local company all staff bar management are on NMW + 13p.

Doesn't matter if they are serving at the checkout, stacking the shelves, ordering items in or running the website ordering system - all are on that level pay.

All are also on no longer than 30 hours a week (again, bar management).

Tax credits is the main income for most of the people employed there.

That's how it's abused. Put the job up at NMW, with the right hours and people will flock to it. The wage itself is of little relevance to those these jobs are aimed at. It's the times for most and the correct amount of hours.... tax credits and housing benefits etc will do the rest.

What's more, people opt out of the pension. At £3 a week it's not worth it, so savings to be had again for the employer so long as they plan it right.

Tesco policy is the complete reverse. Look at most of their part time jobs and they are 15 hours at a higher rate of pay, precisely to attract the child free older workers with less ties. The 15 hours doesn't qualify for the benefits. That one extra hour needed for the benefits rules the job out for great swathes of people. The higher rate of pay doesn't come close to a NMW job with added tax credits.

It may show the madness of the tax credit system
and how often there are unintended consequences of actions by well intentioned idiots.

Graham_Devon

CLAPTON wrote: »

It may show the madness of the tax credit system
and how often there are unintended consequences of actions by well intentioned idiots.

It takes two to tango in this case.

Firstly it needs the tax credits system.

Secondly it needs the employers to design their employment policy to milk it.

michaels

Graham_Devon wrote: »

It's become "the" rate of pay in many areas.

In one local company all staff bar management are on NMW + 13p.

Doesn't matter if they are serving at the checkout, stacking the shelves, ordering items in or running the website ordering system - all are on that level pay.

All are also on no longer than 30 hours a week (again, bar management).

Tax credits is the main income for most of the people employed there.

That's how it's abused. Put the job up at NMW, with the right hours and people will flock to it. The wage itself is of little relevance to those these jobs are aimed at. It's the times for most and the correct amount of hours.... tax credits and housing benefits etc will do the rest.

What's more, people opt out of the pension. At £3 a week it's not worth it, so savings to be had again for the employer so long as they plan it right.

Tesco policy is the complete reverse. Look at most of their part time jobs and they are 15 hours at a higher rate of pay, precisely to attract the child free older workers with less ties. The 15 hours doesn't qualify for the benefits. That one extra hour needed for the benefits rules the job out for great swathes of people. The higher rate of pay doesn't come close to a NMW job with added tax credits.

You could look at the same 'data' and suggest that it shows that the NMW is actually increasing the pay of the lowest skilled as without it employers vould probably still find willing workers for less pay, thus the more skilled posts are not underpaid but the less skilled are overpaid.

And if the wage rate is set by supply and demand, why are such low wages acceptable - almost certainly because there is no shortage of willing labour, not surprising when there is considerabel unemployment throughout Europe and the NMW is high compared to what is available in many other economies in the EU even for moderately skilled workers.

I am ambivalent over EU membership but for sure free movement of Labour benefits those above the median as their wages are less leikely to be squeezed but they benefit from cheaper Lattes, cleaners and gardeners but cuases those with less skills to suffer as there is no shortage of unskilled labour that would be needed to make employers have to compete on pay to attract such workers. The BOE have said as much although you might have missed it in the BBC coverage....