After the ONS report, let's take a look at this. I don't normally critique newspaper pieces on this blog for a range of reasons, but there gets to a point where you just have to say 'thus far, and no further'.
The Financial Times is the best UK newspaper. Let's get that straight now. And the piece that headlines their news section (Sub required, so I can't link it properly) today is probably broadly correct in its conclusion.
The centrepiece of the article is an analysis of Student Loans Company data to examine new graduate earnings, and the conclusion is that these are down 12% (in real terms) since the start of the crash in 2008. As average graduate earnings have barely budged in years - this is well-documented in DLHE data - and the cost of living has risen substantially (see everywhere, all the time), this is an unsurprising, if depressing, conclusion.
But SLC data, whilst interesting, needs caveats, and the FT doesn't do it properly. They state that it doesn't cover new graduates who were not earning enough for repayments and those who were not earning at all (without mentioning that these are often in PG study) but they fail to mention it also doesn't cover people who have already repaid (4% of the 2011 cohort according to the article, which is interesting in itself), and people who did not take a loan out in the first place. In other words, people at the highest end of the scale. With this in mind, I'd be more careful than the FT have been and say that a 12% fall in real earnings does not give a fully accurate picture of the whole range of earnings for recent graduates.
The piece also makes the extremely important point that these are the
people we're relying on to fund the retirement of Britain's largest
generational cohort, and this point could have been expanded more.
Furthermore it refers to very interesting research from Oreopoulos, van Wachter and Heisz about the long term
effects of graduating in a recession, using data from Canada from the
80s and 90s suggesting it might take 10 to 15 years in some cases for
people's pay to recover from a start like that (still waiting in my
But there are other concerns. The article uses High Fliers data, which, to be fair, it does make plain covers the 'top 100' employers, but if we strive for rigour we ought to be clear how the 'top 100' is gathered and how relevant that is to the wider graduate experience. The narrative in the article about the London Graduate Fair and the finance industry does have the whiff that these are the only jobs that matter. They aren't.
But what's the most alarming is the appearance of perhaps the hoariest cliche in the current graduate jobs debate - the idea that, at one point, a degree once guaranteed you a good job, and now it doesn't.
When was this magical time supposed to have been? It wasn't the early 90s, when early graduate unemployment was much higher than it is now. It wasn't the 80s, although the latter end did have 5 years when unemployment rates were a little better than they are now. In 2004, Leonard Schwarz published a magisterial analysis in the Historical Journal, of the interactions between universities, graduates and the jobs market between 1870 and 1970, that in my ideal world, would be required reading for everyone wanting to comment on the jobs market. It was clear from his research that this time of guaranteed graduate jobs wasn't pre-war either. My favourite bit of the Schwarz paper is where he uses historical data to show that in 1922, one arts graduate from a Midlands university got a job in industry. As a rail clerk. Things are better now.
This golden age for graduate appears to be a half-remembered conception of the graduate jobs market in the 60s and early 70s, when the UK was just expanding the provision of institutions and we arguably did not have enough graduates to fill demand. This actually lasted quite a short time.
Telling young people that there used to be an effective guarantee of employment for graduates, but now there isn't, is not accurate. I'm not clear what it's supposed to achieve. Is it supposed to foster a sense of grievance amongst new graduates about how easy people before them had it? Is it supposed to make them think they've been gulled by people misselling university? I have never seen anyone actually say 'if you go to university, you'll get a job', and anyone who has seen me present to young people will attest how tedious I can be about the limits of the promises we can make about university. Is it supposed to make us think that the 'natural' state of the jobs market when we aren't in recession, is for graduates not to have to try too hard to get a job? That strikes me as an especially bad message to give.
The real situation is that, far from a degree at one point being a 'guarantee' of a job, the reality is that graduates in most disciplines always have and always will have to work to get a good career. We need to make sure this message is front and centre when talking to young people about university and not spin them lines.
The FT has a valuable message - like most people, new graduates have seen their earnings growth outstripped by the rise in the cost of living. It may be a relatively deeper fall for this group than workers as a whole (although in the light of the ONS report today outlining how much more HE graduates earn, it may be that this isn't significant in the long term). This may have a long term effect on the earnings of a cohort of graduates whose earnings should be of national interest due to our reliance on them to aid in economic recovery and to fulfil obligations to new pensioners.
But it is wrapped in some dodgy assertions and questionable uses of data. It's supposed to be the first in a series of examinations of the graduate jobs market in recession. Let's see what happens next.
ETA to add in 'early' to the statement about the 70s. The late 70s were not a bed of roses for new graduates either!