I had this piece in the Weekend Australian about the signs of emerging graduate unemployment. I know lots of Cats have direct or indirect connections with the higher education sector and so there should be some interest.
Of course, quite a lot of the Vice-Chancellors want to deny all this and think that every person, no matter their lack of aptitude or effort, should be paid by the taxpayer to attend university. It is really a continuation of the “everyone’s a winner”/participation ribbon ethos of schools.
Don’t bother to try at school is the message. Got bad marks? Let’s take a look at the back-story (single parent household, NES, low income, poor school, Indigenous) and we can ignore your lack of achievement to date. Uni – here you come.
Frankly, I’m not signing up to this storyline. I have always thought the process of mature age entry dealt very well with those individuals who were taking some time to work out what they want to do and buckle down. And recall that 23 years of age was generally the cut off point for mature age entry.
The alternative of allowing young’uns with ATAR scores of 40 , 50 or even 60 to be subsidised to study at university is a poor use of taxpayer funds – much better things to do with them, including giving some back to the taxpayers.
Here’s the piece:
LAST year, I was having a chat with a vice-chancellor of a newish regional university who was contemplating the establishment of a law school. He asked me for my opinion. Was he kidding? I thought, as I mumbled some equivocal response. Hadn’t he seen the figures on the number of law graduates who currently cannot secure work as lawyers?
Perhaps he was aware of my reservation, because his next response to me came in two parts. The first was that there were some local students who wanted to study law, but currently had to move to a capital city to fulfil their dream. And, second, law was a good general degree that could set up graduates for a range of career paths.
I think the most revealing aspect of the conversation was about the incentives universities face that are not really connected to the job prospects of their graduates. This is particularly the case now we have demand-driven enrolments. Put on a course in which sufficient numbers of students will enrol; adjust the cut-off mark to achieve the required number of students; then count the money rolling in from Canberra.
To be sure, universities are keen to boast about the employment outcomes of their graduates and the salaries they receive. But bums on seats is a far stronger incentive than adjusting student numbers in particular fields of study according to the job prospects that graduates face.
And if one university were to restrict the number of students able to study law, say, what is there to stop another competing university from simply increasing its intake?
My tip is that over the next several years significant graduate unemployment will emerge in Australia. And, for those who do secure work, expect relative salaries to slip. It’s hard to contemplate how it could be otherwise. Domestic student numbers at Australian universities rose by nearly 180,000 between 2007 and 2012, to reach 934,000. That’s an increase of more than 23 per cent.
Of course, enrolment numbers and course completions are not perfectly correlated. If we look at award course completions from Australian universities between 2007 and 2012, the number rose by 21 per cent to nearly 300,000. Over a longer time frame, the rise in the number of award completions has been even greater – from 164,000 course completions in 1999. Between 1999 and 2012, the number of course completions rose 82 per cent, far outstripping the growth of the population.
In 2013, the proportion of bachelor degree graduates who secured full-time work after graduation was 71.3 per cent. As Graduate Careers Australia notes, “The figures indicate that the labour market prospects of bachelor degree graduates, which fell in 2009 as a result of the global financial crisis and did not change notably between 2010 and 2012, have fallen again.”
There are some marked variations in the employment outcomes of graduates according to their field of study. Humanities and visual/performing arts graduates have always found it hard to find full-time employment; what is changing is that graduates of some very specific vocational courses are now struggling to find work. This includes graduates in dentistry, veterinary science, nursing and speech pathology. Law graduates are also finding it increasingly difficult to find work as a lawyer and many education graduates are similarly locked out of the teaching profession.
It is all very well to say that these courses provide useful general content, although this proposition is debatable. But ask the students undertaking these courses and they will tell you they want to work in their chosen field.
The increasing oversupply of graduates is also reflected in the salaries that graduates can command. Since 2009, graduate median starting salaries as a percentage of male full-time average weekly earnings have fallen significantly.
In fact, between 1997 and 2013, the lowest ratio was recorded in 2013. Between 2012 and 2013, graduate starting salaries rose only 0.9 per cent compared with an increase of 5.6 per cent in average earnings.
If you don’t believe that graduate unemployment is a possibility, take a look at what has happened in Europe. In Spain and Italy, for instance, many graduates find it almost impossible to get relevant work and so accept relatively low-paid positions for which they are overqualified. Others extend their studies to the postgraduate level, but even those with higher degrees struggle to find appropriate, well-paid employment.
One of the consequences of the soft graduate labour market in Australia has been an increase in the number of postgraduate students. Between 2007 and 2012, the number of postgraduate students at Australian universities increased more than 100 per cent, the largest single group enrolled in coursework masters degrees.
But, armed with their postgraduate qualifications, many of these graduates are now doing jobs that were once done by those with undergraduate degrees and, in some cases, school leavers.
The flip side of the explosion of enrolments in higher education in Australia is the decline in enrolments in technical and further education.
In Victoria, for instance, the increase in university student numbers has been always completely offset by the decline in the numbers of students enrolled in vocational education courses. Less able school leavers are implicitly being encouraged to enrol in higher education rather than consider attending TAFE or another vocational institution, even though the latter option may be more suitable for them.
Down the track, it is easy to see the emergence of shortages in all sorts of vocational occupations, including the trades. If you want a plumber to come to your house to unblock your lavatory, you should expect to pay much more in the future.
The bottom line is that having a university degree is not the meal ticket it once was, even if the degree is highly vocational. And, over time, it is likely to become less so, as more students, some quite unsuited to higher education, opt to give university a shot rather than find a job or go to TAFE. While more jobs now require university qualifications, there are limits to how many more graduates in particular fields can be absorbed each year.
The oversupply of university graduates is something that needs to be considered in the current review of the demand-driven higher education funding model. There are better uses of precious taxpayer dollars than funding marginal students who then cannot find related employment.