
Today’s Financial Times(£) reports “City executives” wetting their pants about the UK’s minimum wage (£12.20 an hour), which is apparently getting too close for comfort to the meagre starting salaries finance and professional service firms pay their graduate recruits:
Several chief executives have voiced their fears about the impact on recruitment if the minimum wage reaches pay levels for graduate positions in traditional white-collar jobs.
“Why would young people take on £45,000 of student debt if they can earn the same stacking shelves?” asked one.
Well, one reason might be that working in professional services in a comfortable office in “the City1” is a lot more pleasant and interesting than stacking shelves, wiping bums or flipping burgers. Another might be that graduates working in the City can look forward to professional training, promotion, much higher salaries and even better jobs in the near future — nice things rarely on offer to people doing minimum wage jobs.
When I left university, I was offered a job with a management consultancy firm. The salary was £16k — very decent at the time, but not exceptional. I didn’t really want to be a management consultant, so I took a job at the House of Commons instead, which seemed much more interesting and exciting, although the salary was about a grand lower.
That was in 1991. That £16k is worth £40,400 of today’s money2, well above today’s median graduate starting salary in “finance and professional services” (£33k according to the FT) and miles above the minimum wage (around £25k for someone working a demanding 40-hour week). Graduate salaries have not even kept pace with inflation, let alone with wages overall, as the FT story acknowledges:
While pay for senior ranks at the Big Four accounting firms has soared, junior staff are paid much less as a result of the firms’ “pyramid” structures, with thousands of young workers hired each year but only a small number making it to a senior level.
It didn’t seem to occur to any of the executives who spoke to the FT that their firms might consider paying graduates more than people doing jobs they clearly look down their noses at. But none presented any evidence that they were actually struggling to recruit graduates, or losing talented young people to the irresistible allure of working in Tesco or one of Amazon’s warehouses. So why all the whingeing?
The answer, I think, comes further down in the story:
City executives say they are increasingly trying to ensure young staff do not work long hours — traditionally a matter of course for new starters gaining experience — to avoid falling foul of minimum wage rules...
Some employers who spoke to the FT voiced fears they would end up being “named and shamed” by the government for inadvertently paying below the minimum wage.
So there you have it. The real worry is not problems recruiting graduates or “social mobility, but that by forcing graduates to work long hours (a “matter of course”, according to the FT), City firms might get done under the minimum wage laws for not paying them enough on an hourly basis.
Of course, City firms could easily pay their over-worked graduates a bit more, perhaps by taking some of the froth off the salaries of people higher-up that “pyramid” — you know, the sort of people who get to grumble to the FT about how hard it is being a “City executive”.
But no, to keep on dumping on their own junior staff, they’re now trying to enlist the government in dumping on the poorest working people in the country by holding down the minimum wage. I guess that’s the kind of stellar leadership they’re so well paid for.
- For readers outside the UK, “the City” is shorthand for the big, prestigious financial, commercial and legal firms in the UK, which often (but not always) have their headquarters in the square mile of the City of London. ↩︎
- Adjusted by cumulative CPI inflation between 1991 and 2025 using the Bank of England’s Inflation Calculator ↩︎







