Workers in the the 18-29 age bracket who frequently move jobs earn more than those who don’t, according to living standards analysts Resolution Foundation.
So-called “job stayers” in the demographic saw a 4.4% median annual pay growth, while “job switchers” saw 11.8% growth between 2007-2014.
Job mobility — how easy it is for a worker to move to another job — is an important indicator of economic well being. It is also a strong predictor of pay increases.
“This is why we have previously highlighted the decline in mobility that started before the recession (and was accelerated by it, job-to-job moves being strongly pro-cyclical) as a cause for concern,” the Foundation says.
The chart below shows how much 18-29 year olds have been affected by the lack of job mobility since the 2008 recession:
“Our results suggest that young people’s hourly pay would be around 30p higher than it is currently, and that their earnings would be around 8% below 2009 levels, rather than 11% (more in line with the figure for all ages),” the report concluded.
On the plus side, it seems that income inequality is actually decreasing. “Hourly pay inequality between the upper-middle and lower-middle has been falling,” the report said, “with a sharper decline in inequality between the top and bottom.”
Meanwhile, workforce participation and productivity were both on the increase, while underemployment was falling.
Unfortunately the number of graduates in non-graduate jobs had also risen significantly, suggesting the job market can’t keep up with the number of students coming out of university.
Laura Gardiner from the Resolution Foundation said that many of the findings were positive, but job mobility is still a big issue for young workers:
“Subdued job-to-job moves provide further cause for concern. By inhibiting pay progression at the beginning of careers, our new analysis shows that lower mobility may have increased the pay squeeze for young people by as much as one third, and threatens their future earnings potential.
“Other indicators provide better news however, with a shift towards better paying jobs, unemployment continuing to fall and participation rising. The maintenance or continuation of these trends should provide a good basis for pay increases and shared income growth over this parliament.”