Hourly pay for younger workers 11% lower than pre-crisis peak

Typical hourly pay for the under 40s is at least 11% lower than before the 2008 financial crisis, new figures show.

A study by the Resolution Foundation found that the biggest pay falls hit workers in London and Northern Ireland.

Real hourly pay for 22 to 39-year-olds was down by 11% on its peak, compared to 5% for workers in their 50s and 2% for those in their 60s, said the think tank.

Real average weekly earnings fell by 0.4% in the first three months of the year, the research revealed.

Part-time workers' pay is the only area where typical earnings have returned to their pre-crisis peak, according to the Resolution Foundation.

The one bright spot on pay is the impact of the National Living Wage, which has benefited millions of workers since it was introduced two years ago, said the report.

Stephen Clarke, economic analyst at the Resolution Foundation, said: "The pay squeeze made an unwelcome return at the start of 2017 and looks set to stay with us for the rest of the year at least.

"What's most worrying is that people's pay packets still haven't recovered from the last squeeze when this latest bout of falling pay hit.

"The wages of younger workers and those living in London are still more than 10% lower than they were back in 2008, and this latest squeeze means it will take many more years for their earnings to fully recover.

"The National Living Wage has been a bright spot amidst this bleak picture on pay, delivering a 12% rise over the last two years. It may also be shifting people's thinking about moving jobs, given the huge pay rises associated with staying in the same low-paid job.

"This attitude is understandable given that moving jobs is always a gamble, but it's bad for people's careers and chances of escaping low pay in the long run.

"The welcome introduction of the National Living Wage means that dealing with our growing labour market challenge of getting people to progress out of low pay is more important than ever."