Two-thirds of 30-year-olds now earn LESS than their father

It’s long been seen as a sign that you are making your own way in the world.

But these days two-thirds of 30-year-olds do not manage to make more money than their father did at the same age, a study has found.

In 2005, more than half of young adults of this age had reached the milestone of earning a higher salary than their father.

Researchers who worked out the figures say the credit crunch of 2008 is likely to be responsible, with the effects of the financial downturn still being felt a decade on.

The average young adult now earns less than they would have in 2005, which also makes them less likely than their parents to be able to buy a house and get on the property ladder.

A co-author of the study, 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.

‘People notice if they do not have the same earnings, do not live in the same size of house as their parents and do not achieve what they grew up seeing as normal.

‘These findings suggest that things have got worse for people in their thirties and forties in recent years, with the effects of the great recession of 2008 lasting a long time and no sign of things going back to normal yet.’

Only one third of men in their 30s earn more than their fathers did at the same stage in their lives – down from more than half in 2005

Researchers looked at 30-year-old men who were fathers between 1964 and 1987 to work out the earnings of the older generation. They did not look at women’s earnings in this generation because fewer women worked at that time.

These were compared to the average wages of men and women who turned 30 between 1994 and 2017, to get an insight into the difference between fathers and their children.

In 2005, 56 per cent of 30-year-old men and women earned more than their father at the same age. By 2017, that proportion had fallen to 33 per cent of 30-year-olds.

The researchers found that 74 per cent of 30-year-old men earned more than their fathers’ in 2005, but this fell to 45 per cent of the same male age group in 2017.

For women, the proportion out-earning their fathers fell from 43 per cent in 2005 to 22 per cent in 2017, showing the pay gap between men and women is still significant.

The authors, who will present their findings at the Royal Economic Society’s annual conference next week, say that if wage growth had continued at 2 per cent per year, as before the financial crash, 55 per cent of 30-year-olds could expect to have overtaken their fathers’ salaries now.