QUARTER OF UK GRADUATES ARE STILL LOW EARNERS TEN YEARS INTO THEIR CAREERS
One in four graduates in work a decade after leaving university in 2004 is earning only around £20,000 a year, according to a new study.
The Longitudinal Education Outcomes (LEO) dataset is the first of its kind to track higher education leavers as they move from university into the workplace. Its findings are likely to be scrutinised closely by students considering whether to accept a university place when they receive their A-level results.
The low earning power of some graduates has become an increasing concern, as student numbers have boomed in recent years. Earlier this summer the Higher Education Statistics Agency published figures showing that one in four graduates was not in a graduate job six months after receiving a degree.
The LEO survey, which is not adjusted for inflation, reveals that the median earnings for a graduate were £16,500 one year on from when they left university in 2004, increasing to £22,000 after three years and rising to £31,000 in 2014. The lowest quartile of graduate earners fared significantly worse.
A year after they graduated in 2004 their median earnings were just £11,500, rising to £16,500 after three years and £20,000 after 10. The average wage in Britain is currently £26,500.
Fears of a huge debt burden upon graduation have already led some potential university recruits to seek alternative career paths.
“The statistics are fairly clear,” said Alice Barnard, chief executive officer of the education charity the Edge Foundation, which champions vocational education. “Immediately after graduation, many graduates are either in jobs that didn’t require a degree or didn’t require the level of education they had got themselves to. They have invested not only time, energy and effort but also quite a lot of money and potentially come out the other side without the jobs they perhaps expected to get.”
Barnard pointed out that an apprentice who completes a two-year course with Jaguar Land Rover can expect to be earning around £30,000 immediately, without having incurred any debt.
“Ten years down the line, if you’re earning a huge amount you can say, ‘well, I do feel that was value for money because my degree has taken me to this point’,” she said. “What is concerning perhaps is that, 10 years after, graduate salaries stand at £31,000, which for a higher apprenticeship for companies like Jaguar Land Rover is fairly common after, say, two years.”
Any shift towards apprenticeships would have a significant impact on the fortunes of universities that face new challenges when it comes to recruiting and retaining students both at home and abroad. Experts question whether Brexit will have an impact on the number of European students opting to accept places at British universities.
On the domestic front, this year has seen a 2.2% drop in the overall number of 18-year-olds in the UK, a decline that is expected to last several years. While this has not yet translated into a shortfall in teenagers applying for university places, Ucas reports that this year there has been a 5% decrease in applications from those aged 20-24.
Nick Hillman, director of the Higher Education Policy Institute, said market conditions could play to the advantage of students considering university. “I know people have been saying it’s a buyer’s market for two to three years, but it’s definitely the case now,” he said.