Thursday, November 8, 2012

Unintended consequences

One of the unforeseen consequences of the previous governments attempts to try and get as many young people to go to university was of course the effect of market forces on the value of the product.
After all, if everyone has a degree, what's a degree worth?
The higher salary that graduates traditionally gain from having a university degree has been slashed by a fifth during the past decade.
A study has found that the rise in numbers attending university and increased competition for jobs has drastically driven down the earning power enjoyed by previous generations of graduates.
Researchers from Warwick University followed 17,000 students from 2006 to their graduation into one of the worst recessions in history, and compared it to graduates who finished their studies in 1999.
The recent graduates are, on average, earning 22 per cent less than those who started at university a decade earlier.
They are also struggling to find jobs that justify the debts they have built up in getting their degrees, with four in ten failing to get work that requires their qualifications, while one in ten have spent at least six months on the dole.
The researchers concluded that a degree continues to deliver a 'significant earnings advantage', although the size of it varies widely according to the subject studied.
I'd guess that a degree in maths or physics probably does stand higher in earning potential than a degree in flower arranging or any of the other weird and (not so) wonderful things you can get a degree in these days.
The problem is that the number of high earning jobs in the UK is limited, it's all about balance, in order to support the high end there needs to be a middle and broad base and when people with degrees started flooding the market, all that happened was that the goalposts were moved, by the various institutions who only wanted the brightest and the best. It used to be fairly easy, you had a degree your job options were pretty good, now if you have a degree? Well so what, so have a lot of people and sorry but a C in the influence of the Beatles in contemporary society is not going to put you on the fast track to being a captain of industry.
What the previous government did was devalue a product, rather than be something that only our beast and brightest got, they made it so that it was a necessity to even get on at the ground floor of business. They essentially betrayed a generation by selling them a false dream.
Not that the current government is doing any better...

6 annotations:

English Pensioner said...

My daughter did not go to university (some 20 years ago) and she still reckons that she is well ahead on earnings compared with those friends who did. She had three year's extra salary, no debts, and has made her way up the employment tree so that she now has a better position than most of her friends. Depends on the area of work, obviously, but she now holds a post where the company would normally think in terms of someone with a master's degree.

Anonymous said...

The best new course I came across was at Nene College ( I refuse to call it the University of Northampton), you could obtain a degree in sh1t shovelling, they called it combined honours in Waste management and equine studies but you get the drift

Curmudgeon said...

A lot of so-called "high-end" jobs are vulnerable to technological advances and offshoring, but there will always be a demand for gardeners, plumbers, hairdressers, care assistants etc. and you can't provide those services from India.

Anonymous said...

Stonyground says:

Market forces are far from perfect but they do tend to sort out inbalances very quickly. Governments that feel the need to distort market forces for the common good, do tend to make matters worse. Why do we always fail to learn from this?

Dioclese said...

Never wanted to go to university. Huge disappointed to parents.

Retired at age of 52. Job done.

Weekend Yachtsman said...

I bet the ones who studied Physics or Maths at proper universities are doing all right.

It's the ones doing Media Studies at the University of Nether Wallop (aka Ruraltown Poly) who are flipping burgers.

Of course, the comments of others re debt are perfectly valid - but if you never earn much, you don't have to replay the debt.