Is Graduate Underemployment the elephant in the room?

You can try to hide or ignore the elephant, but that doesn't mean it's not there!

You can try to hide or ignore the elephant, but that doesn’t mean it’s not there!

By and large, there are three reasons to go to university:

  • To learn more advanced knowledge in an academic or applied field;
  • To develop ways of thinking and problem-solving;
  • To get access to certain kinds of jobs.

Universities have been a means to all three for centuries, but the last one on the list is fast becoming the headline act. Increased employability is the chief justification behind tuition fees and employability features on university rankings.

The number of people going to university has been growing. This started after the Second World War as more and more people began to complete secondary school. At the same time, companies became bigger and more complex, requiring people with more advanced skills than before. This was great for social mobility as it allowed for better opportunities as the labour market grew. Over the last 20 years there has been a really sharp acceleration in the student population, though. This has been encouraged by national governments who believe that:

  • Graduates make companies operate better and more efficiently;
  • Better companies make more money and this benefits the economy;
  • The economy grows and this makes employers want/need even more graduates;

This set of ideas has been bought into all over the world, as nations (or regions, like the EU) try to compete with each other, pumping out degree holders to push the economy along. (They don’t want to/can’t fund this, so they impose tuition fees.) Since 1995, the number of people graduating from university has doubled or even tripled in a lot of countries. This is great news if the graduates-and-growth equation adds up, as everyone’s winning. But what if it doesn’t? There is increasing evidence in a lot of countries that there are too many graduates, and this creates a number of problems.

Fiercer Competition If a lot of people have degrees, how do employers choose between applicants? One way is to run recruitment systems of entry exams and interviews, although they still have to decide who has access to those tests and/or interviews. University rankings, where they exist, can play a role here, and those at the ‘best’ universities generally have better employment chances. Grades may also become important, and this might make students work harder, but also puts universities under pressure to give out good grades. Other non-academic activities such as work experience can be important, too, and there is research emerging that shows how people have very different levels of access to internships and placements. These are often unpaid, and people from poorer backgrounds simply can’t afford to do them, or may not have the social contacts to get work experience in certain kinds of companies or other organisations. All in all, employability starts to become an arms race, as students desperately try and outdo each other in whatever way they can.

Falling graduate salaries Basic economics dictates that if there is too much of something on the market, its price falls. If there are too many graduates, then employers can lower the financial terms of job offers because they have no difficulty getting enough applicants. This is problematic if you have big debts from studying, and starts to undermine good salaries as the ‘selling point’ behind tuition fees. There was some recent research that found big multinational companies pay top dollar to a tiny minority of graduates – those selected from the most prestigious universities – and weren’t so interested in the rest.

Crowding non-graduates out Graduates – whether they have debts or not – still need to work, so what do they do? They have an advantage in many areas over people without degrees, so they might start to squeeze people out of jobs that don’t need a degree. The graduates will be ‘underpaid’, and again this is less than ideal if they paid for their tuition and/or have student loans. The companies that employ those graduates won’t mind: it doesn’t cost them any more than employing non-graduates, and they may get more out of them – not in effort – but perhaps in terms of what those staff can offer. I was struck when I lived in Japan that having a degree was important to employers in terms of selection, but often not at all in terms of degree knowledge or ways of thinking. This is changing now, but they traditionally trained new staff in the ‘company way’ over several years; there are also careers there that employ graduates – like being a cabin attendant – which aren’t considered graduate jobs elsewhere. What about the people that don’t have degrees? They will find it increasingly difficult to find work, and high unemployment levels are a personal, social (and economic) disaster.

Falling demand for degrees. We could see that the number of people applying to go to university falls because the ‘returns on the investment’ aren’t there. In a sense, this should already be happening, but it doesn’t seem to be. If anything, the opposite is true. Why? Perhaps people don’t know what the reality is, or they choose to ignore it. It may be that having a degree is seen as the best option, even if it is a risky one. This is like an expensive (and time consuming) lottery ticket – you have no chance of winning unless you buy one. What’s tricky here is that some lottery tickets will have better odds, depending on the status of the university, the subject, grade, work experience and so on. A lot of this also can be dependent on social grouping, which I’ve written about here: those from poorer backgrounds are less likely to do well at school and go to university, and if they do make it onto a degree, it is generally at the less prestigious places and they are less able to access internships, as I mentioned earlier.

Is graduate underemployment the elephant in the room? It is certainly not in universities’ best interests to highlight the employment risks that come with a degree. They need students to survive, but will also come under increasing pressure from those students (and also via rankings) to help with employability. Governments aren’t going to shout about it, either, as they still believe in that economic growth model. You often see a trick in their rhetoric, where they take the credit for falling unemployment rates, but individual unemployed people are held as solely responsible for their own situation. One wonders if and where the tipping point on graduate employment will come. Something that was predicted in Germany in the 1970s was the emergence of an ‘academic proletariat’, a large body of highly educated and articulate un- or underemployed graduates, militating for political change. This didn’t happen at the time because it turned out that there were enough good jobs to go round. The metaphors may be shifting, from an elephant in the room to a ticking time bomb.


About ddubdrahcir

A Higher Educationalist...
This entry was posted in Access to Uni, Employability, Globalisation, Rankings, Student Loans, Tuition Fees. Bookmark the permalink.

5 Responses to Is Graduate Underemployment the elephant in the room?

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