Average graduate salary plummets as half of graduates take low-skilled jobs

Average graduate salary plummets as half of graduates take low-skilled jobsBUT WAGES DO RISE FASTER FOR THOSE WITH A DEGREE

New figures show how almost half of all university leavers have taken non-graduate roles – and the true average graduate salary appears to be far lower than the £29,000 stated previously by statisticians and strongly disputed by Graduate Fog’s users. Some graduates are even earning less than apprentices at the start of their career. Experts called the evidence of a new under-employment crisis “alarming” and a “massive waste”.

The Graduates in the Labour Market study by the Office for National Statistics found that 47% of employed workers who left university within the last five years are in roles which don’t require higher education qualifications. The figure is up from 37 per cent in 2001, with most of the rise occurring since the recession of 2008/2009. The findings heighten concerns about how well Britain’s brightest young people are really getting on in their careers, as well as reinforcing fears that the UK’s recovering economy is built on low-skilled, low-paid posts (occupied disproportionately by younger workers).

The survey also provides intriguing new clues about the true average graduate salary. This has been a subject of fierce debate among Graduate Fog’s users, who say the high-20s figures regularly quoted in the press are only representative of those grads who secure places on the big graduate schemes. You say the rest of you are earning well below that – often in unpaid internships, minimum wage zero-hours contracts jobs or high-teens salaries that never seem to grow and don’t keep pace with the rising cost of living.

But there was some good news! Annual earnings for graduates increase at a faster pace as they become older – and graduates are more likely to be in work than those without a degree. Overall, graduates find their salaries level out in their late 30s at a median level of £35,000 a year. That’s well above those without a degree, but only £6,000 above the average graduate starting salary stated by High Fliers (£29,000). Does that mean that in 17 years (from age 21 to 38), salaries are only rising by six grand? Graduate Fog isn’t great with stats, but it’s clear that something doesn’t add up here.

**GOOD WITH NUMBERS? Please add any additional analysis in the Comments below!**

Who is earning the most? Medical graduates in their mid-30s had the highest median pay at £45,600. Other courses which were comparatively high-paying include engineering (£42,000), physical and environmental sciences (£36,000), and architecture (£35,000).

But media and information studies graduates had the lowest salaries, at £21,000. Can that mean that in their mid-30s, media graduates are earning an average of £8,000 less than the supposed figure for today’s average graduate starting salary? Others degrees which led to comparatively low-pay jobs were linguistics, English and classics (£26,400) and arts (£21,900). Graduates most likely to be out of work included humanities (84 per cent employed), arts (85 per cent) and languages (87 per cent).

The data also revealed various other trends, with graduates from Russell Group universities being more likely to work in high-skilled roles, compared with those from other institutions, and to therefore earn a higher average hourly wage – £18.60, compared with £14.97.

Dr John Philpott, director of The Jobs Economist, said:

“The pre-recession rates of underemployment of graduate skills in the UK economy were already disappointing – the post-recession rates represent an alarming jump in underemployment and a massive waste of investment in skills.”

Steve Radley, director of policy at EEF, the manufacturers’ organisation, said:

“The figures show that graduates have not escaped the squeeze on pay but they also highlight the major impact that subject choices have on earnings. Graduates in engineering are the second highest earners and those in physical sciences earn far beyond average also.

“We need a concerted effort to get more young people studying the science and engineering degrees that will drive our economy forward and more of them taking up well paid opportunities.”

And Andrew Hunter of jobs search engine Adzuna added:

“The economic recovery has reinvigorated a wilting jobs market, with the number of advertised jobs in September 3 per cent higher than a year ago. There are now just 1.9 jobseekers competing for each vacancy, compared to 2.3 in September 2012.

“But for those who are fresh out of university, the prospects of finding that first job remain gloomy. Despite signs of a wider jobs recovery, the pickup in the graduate jobs market has been less pronounced. In the face of fierce competition, many grads are being forced to take on lower-skilled jobs.”

While the new stats paint a troubling picture of the reality of the graduate under-employment problem, Graduate Fog welcomes any new data that provides a more accurate picture of the true situation our users are facing. We knew that £29,000 graduate starting salary figure wasn’t right. Now there is the data to prove it. Let’s hope this is the first step to policy-makers giving graduate under-employment the serious attention it needs.

 

*WHAT DO YOU THINK IS THE TRUE AVERAGE GRADUATE SALARY?
How much are you earning – and what about your friends? What do you think of these new figures? If you’re ‘under-employed’, what’s stopping you from securing the job and the salary that your skills are worth?

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