Tag Archives: graduates

Back to reality with a thump-ing large debt

Wow, two months, no post? I can only blame my job. This Working Girl has to work, you know!

So, two things have been floating about the internet that have caught my eye and I think I see a link. Graduate Prospects has published research (well, PR driven research, I guess) that shows graduates’ salary expectations are falling wide of the mark. (I’m trying hard to find a direct link to the research but failing, so if you can help, please do!)

According to the press release, a sixth of graduates think that they’ll earn £100,000 by the time they are 30. The reality: 77% of graduates from 2000-2010 earn less than £30,000.

Now, I don’t know what the split of those years are – this might be dominated by those that graduated less than 3 years ago (and probably is as most don’t stay interested in graduate salaries after that). Those graduating in 2001-2003 who might have hit 30 recently may be rolling in dough. The 7% who said they earn more than £45,000 might be counting the entire rewards package – and 7% could be so low because hey, if you’re earning more than £45,000, why the hell would you waste your time taking a poxy survey on what you earn? You have a job to do, dammit!

But I digress with my nit-picking of the research, and without seeing the full methodology I’m going to have to bumble around in the dark, making wild statements: getting a degree right now is really kinda dumb.

Lemme explain. You rack up £27,000 of debt, which has to be repaid if you earn over £15,000. The average salary of a graduate right now is around £18,000, I believe – which is lower than all those ‘graduate employers’ surveys that do the round like this one from High Fliers. Just because you are a graduate, it does not mean you automatically get a job on a graduate scheme. I didn’t.

Starting on £18,000 at 21/22 years old, maybe moving jobs or getting a pay raise to £21,000 after 2-3 years and then up another £2,000 in another 2-3 years etc – this makes about £27,000 or so a year by the time you are 30.  This seems like a fairly familiar and possibly generous salary to most of my social circle.

But you went into uni expecting to earn more than your average school leaver, and that there would be enough jobs for you and people would fall at your feet at your three years of wisdom gained by cramming for exams, trying to get into your neighbours pants and getting hammered on 20p vodka shots. So how come, according to High Fliers, that 25% of grad jobs have gone to those who deferred or by those who have work experience with that company?

And how come, according to Graduate Fog, that SMEs (the UK leading group of employers, by the way) are now giving away grad jobs to school leavers? It might have something to do with the sentence:

“A 2:1 doesn’t guarantee a motivated candidate who will stay with your organisation.”

Two things may be at fault here: apparently a 2:1 means you expect to earn mega-bucks by the time you are 30 and the top recruiters are PWC, Deloitte, KPMG, Teach First and the Army. Teach First and the Army have built in time periods so you can leave, and I think I know one person who stayed with a Big 4 firm after completing their grad scheme, as everyone else just hated them.

So grads don’t show loyalty to shitty employers and they expect to earn a lot. Two reasons that hiring a school leaver and training them up seems like a better way of keeping knowledge and talent in your team.

The bottom line: going to uni is a great thing. It opens your eyes to adulthood, a different way of life, different cultures and mindsets and allows you to have fun and meet lifelong friends. But it doesn’t guarantee a career.  I think the degree is becoming devalued after market saturation of the last decade – and I think sometimes the more career savvy of teenagers should be looking at getting on the career track at 18 and getting qualifications as they work.

Your degree might be worth £540,000

The Office of National Statistics (ONS) released research (well, data analysed from the past 10 years of ONS information) that shows that graduates earn more than non-graduates. According to them, the highest average wage a non-degree earner receives is £19,400 while the highest average wage for a graduate is £34,500, and the average difference is £12,000 a year.

That’s about £5400,00 over a lifetime of working, assuming you begin work at 20 (I split the difference between 18 and 22) and end work at 65. This goes higher than the old saying that a graduate earns £400,000 in their lifetime, a ‘fact’ I question, and completely blows the PwC research that you may earn £160,000 more as a grad out of the water.

So what in the hey? Well, it’s a bit tricky this one. Remember in a previous post I mentioned that doctors and dentists can earn over £340,000 the average wage, while those with an arts degree may earn less than £3,000 more (and get to pay back students debt)? Well, this new research doesn’t look at sectors to see what’s rising and what’s not – so those doctors throw the numbers out of whack, rather than say comparing people with a degree and without a degree in the same field in roughly the same job. And it doesn’t take into account the gross rise in wages, specifically financial wages, in the boom years before the recession.

Add to that the fact that the recession hit the lowest earners (50% have no qualifications higher than GCSE level according to the Research Foundation) harder, this is beginning to show not a reason to get a degree but more the gross salary discrepancy between the haves and have nots. Which our lovely Mr. Clegg addressed in his social mobility speech that so terribly backfired on him this week.

Personally, I think it is good that if you invest money in a degree, then you should be able to earn that money back and then some – it’s a nice perk. But what I don’t agree with is the idea that you may go to Uni purely to earn more money, or that just by going to Uni, you will earn more money. I believe that anyone who is better at my job than me should earn more than me, regardless of if they finished GCSEs or not – because my education doesn’t give me a privilege, nor should it be a privilege – education is a right.

The £400,000 myth

This has been bugging me for ages. Every time a politician talks about tuition fees in a positive way, they roll out the ‘a graduate earns over £400,000 more than a school leaver during their career‘ fact. Except it’s not a fact, it’s complete fiction. In fact, it’s old fiction – it was abandoned in 2002 after the DfES reviewed the figure and came back with a smaller sum of £120,000 before tax, while PWC found it to be £160,000. (Someone tell Michael Gove).

And even this is dodgy. It completely depends on what you study and choose to do. PWC found that doctors and dentists earn £340,000 more than the average earner in Britain, while arts and humanities graduates earn £34,000 more. A later study from Warwick found that arts student’s earn less than £3,000 over their career than those who do not go to university.

The other issue is that those arts and humanities that rack up £27,000 of tuition fee debt and over £10,000 of living expenses through loans means that even if PWC is right and they earn £34,000 more than the average earner, they’ll still be worse off.

So if arts and humanities graduates don’t earn more than school leavers, why do they go to university? Well, as I’ve said before, there are plenty of careers that erroneously require a degree. Trying to get experience in media, PR, publishing, HR, IT, management or admin without a degree is bloody hard, all with no real reason. So we are funneled into going to university to get us ‘good’ careers which we wouldn’t be able to get without a degree – but don’t actually earn us anything more.

And there’s the core of education – to learn, not necessarily to get a job. What is wrong with exploring and learning and coming to grips with who you are – after all, our brains don’t stop developing until we are 25 (some say 30)? Surely we want people to think, to know more, to interact with people from varied cultures to create a better, more advanced society. Isn’t that what university provides? Why isn’t that a good thing?

And why is no politician addressing those issues instead of wheeling out disproved ‘facts’ over and over again?

Educated to degree level

Another story from The Guardian (it’s the paper I read every day so you’ll just have to get used to a lot of the links being from there) has made me think again about the myths we are peddling to teenagers. Yesterday we look a little at the financial myths that graduates are fed by the media. Today I want to look at the myths peddled by schools on the advice of the government.

Nearly 190,000 A-level students have missed out on a university place due to unprecedented demand. Fair enough, you may think. Labour spent a lot of its time saying that they wanted 50% of young people to go to university, this is just simple supply and demand.

Except a few things are troubling me. One is this quote from Kenton Lewis, a student recruiter at the University of London, who said that students should “look at applying for slightly less competitive universities”. Hang on. I thought the point was that ALL universities were competitive this year. Otherwise there may have been less than 190,000 students without a place. And it’s not like students who are predicted three Cs are all applying for courses that require three A*s. Plenty of students with top grades have not got a place due to ‘competitiveness’ and why in hell should they lower their standards? They worked hard, they got top marks – anything at C and above in A-levels is a considerable accomplishment – and they couldn’t get a place.

Not only that, but they couldn’t get a place in clearing. Why should they want to shift their focus from Warwick to Kent? Why should they expect less than what they gave?

The other thing that concerned me was the story of one of the students, who, when ringing up a university to inquire about Clearing, was told that as a domestic student there was no place available. Had she been an international student, she may have got in, and paid the higher fees to do so. Again, fair to a certain point. Universities have to fund themselves somehow and the givernment isn’t exactly about to cough up. But there should be places, and not quotas. If a domestic student rings about Clearing and you have a place, you give it to them providing they meet the requirements. Because being able to pay higher fees isn’t a requirement for most courses (alas, it is for a lot of universities but hopefully you see my distinction).

Finally, and I promise this is my last rant, the issue that the last student found: “After I missed my grades, there was a lot on the news about the government wanting people to take up vocational courses and apprenticeships, or set up their own business. But , having spent two years looking at university courses, none of these really appealed to me.”

The government pushes students towards university through schools and career services, potentially because it looks good in country comparisons, it means that universities can fund themselves and stop asking for government money, and because graduates will earn more over their lifetime than non-graduates and therefore pay more tax. But it doesn’t provide enough places for all these students to actually go to university. It’s not like next year the 190,000 will be able to get in – they’ll be facing another 750,000 students wanting to get in as well.

For all they talk about apprenticeships and vocational training, far too few students are being pushed towards these. And even fewer are being told that it’s ok to go out to work at the age of 18, that you can have a good career path, that people won’t look down on you.The majority of jobs do not require a degree.

This is partly the government’s greed and pride. But it’s also the unnecessary standards that employers have when recruiting. Every single position I have ever applied for has requested ‘educated to degree-level’ and sometimes even asked for a specific grade. But none of the jobs that I have done have required anything I did within my degree. You can argue that degrees also bring maturity and a way of working with different people – I argue that plenty of 18 year olds have this skill as well. Experience, common sense and enthusiasm are far greater assets to have in a job than a degree.

Until employers stop this arbitrary condition of degree requirements, until the government starts pushing vocations and apprenticeships as fervently as degrees, we are always going to end up with hundreds of thousands of disappointed 18 year olds wondering why it didn’t work out when they did everything right.

The Graduate

A report, commissioned by Endsleigh and conducted by Demos, has come up with a few interesting opinions and beliefs from the class of 2010, as they are calling it.

One of these, that the Guardian highlights, is that over half of the current graduating year (53%) believe that they will be able to buy a house/flat within 5 years of graduating. However, only 19% of 25 year-olds are home-owners, which leads me to believe that 34% of graduates have failed to learn anything about reality in their years at university.

This is, of course, not their fault. By their own admission, most go into university to learn more about a subject, become more independent and to learn more about life. What it doesn’t teach you about is working life and the rewards/hardships that go with it. And for that I put some of the blame on the media and some on the Careers Services. My main issue that most graduates are looking for graduate jobs. They have been told that they will receive structured training, that the starting average salary for them is £25,000, that they are the future leaders of the company.

But the large employers that have all these things make up just 15% of the graduate job market. SMEs (Small/medium enterprises, or those organisations with less than 500 employees) make up 60% of the workforce in the UK. So the large companies may have a lot more graduate jobs each but there are more SMEs, and therefore the majority of graduate jobs will be with them.

Why do we not hear about SMEs and graduates? Why do the majority of graduates not even think about going to SMEs first, but save them until they have exhausted the Milkround? You can argue that it has to do with the lesser salary, the lack of corporate mobile phones, the fewer benefits, the lack of any structured graduate training. I like to blame these guys.

Whether you agree with me or not, you cannot deny the sheer power of AGR’s press office. They are amazing, churning out stats from the same reports over several months to create a never ending tide of scare stories for graduates. 70 graduates competing for every place, they proclaim. Carl Gilleard is bloody everywhere, proclaiming on A-Levels, jobs, skills, education, anything to do with graduates. Except his organisation focuses mainly on the 15% of graduate employers (they have an e-membership for SMEs but a quick flick through their membership list shows an impressive slant towards the big guns of employment like Proctor and Gamble etc).

This is why I think he needs to at least redress the balance. When I was graduating, I didn’t think there were careers for graduates outside of these large organisations. I had absolutely no clue that smaller organisations hired graduates, and gave them training and development opportunities most grads on these big schemes would die for. I was lucky. I found this out, although I found it out without the help of my Careers Service or any other service other than Google. And I had to go through Work Experience to get my low paying job (£16,000) of Junior Account Executive in a tiny PR firm. I don’t think my path is uncommon.

So why the hell does no one talk about the ‘hidden’ graduate jobs that are out there? Maybe the truth of the matter is that £150 a week experience to get a £16,000 position is not the ‘sexy’ aspiration that the government want to show people who will pay £3,225 a year for university. Face it, any maths student will say that it just doesn’t add up.