You know that degree you just got in £30K debt for? The one with all the exams and dissertations and stuff? Well, apparently it wasn’t as useful as you thought it was going to be. A whole lot less useful.
A new study has revealed that the high salaries traditionally earned by university graduates have actually been slashed by a massive 22% in a decade. A hike in the number of people attending university and an increase in competition for graduate jobs has been credited with driving down the earning power of a whole generation of young people.
Well isn’t this just another joyous story to add to the tidal wave of good news for graduates?! I’m welling up!
The statistics are obviously a bit worrying, but what do the findings actually show?
Well, the researchers from Warwick University have been following 17,000 students from their graduations in 2006 as they navigated the worst recession and unemployment crises in recent history. They compared their experiences to graduates who left university in 1999 and found that, on average, students who graduated in 2006 earned one fifth less than those who left university a decade earlier. So in 1999 a university degree was a golden ticket for a lot of people into bagging a higher paid job, from 2006 onwards it simply hasn’t been the case.
The report also showed that graduates are being forced to accept jobs they could have qualified for without any degree at all – like retail and bar work – with four in ten failing to get a job that requires their qualification. A tenth of the participants admitted to spending at least six months on the dole.
Is there any good news for grads here? Or shall we just all give up now? Well, thankfully, the research did show that a university degree still does give young people a ‘significant earnings advantage’, but the size of it varies drastically according to which course you decide to take.
Law and medicine grads saw the lowest decline in earnings, with about a 9 and 16 per cent loss respectively over the ten years of the study. Arts graduates took the brunt of the decline in earning power, losing a worrying 32.9%. Almost half of the students who graduated in 2006 reported having debts of £20,000 but, despite this, researchers found that 96% graduates would do a degree again if they could. So if you are going to go to university – it looks like you should be smart about which course you decide to go for.
The ‘Futuretrack’ research conducted by Warwick University blamed a hike in the number of people going to university and the competition for graduate jobs for the decline in wages – but there is some good news (of sorts). With the recent hike in tuition fees to a maximum of £9,000 a year, the researchers concluded that the boom in people going to university is over. So, with a bit of luck, the value of a degree will be boosted by the fact that they will be becoming more rare over the coming years (although, of course, that’s only good news for the people who can afford to do them. Hmmmm).
The researchers had this to say about their findings:
‘Compared with the experiences of graduates some ten years earlier, Futuretrack graduates faced a tough labour market. The greater number of graduates seeking employment, coupled with harsh economic conditions, have combined to create higher levels of graduate unemployment, a higher proportion of graduates in non-graduate employment and a lower rate of progression for graduates than was the situation ten years earlier.’
So what can graduates do to stand out and increase their chances of earning a good wage? Well, researchers say it’s all down to experience. Apparently employers are increasingly looking at extra-curricular activities when trying to differentiate candidates – the vast majority of them brandishing 2.1s in arts subjects.
So perhaps this might be a good time to have a look at our opportunities page!
And tell us what you think – was your degree worth getting in debt for? Are you struggling to find work? Or was uni worth it just for the experience?