Too many students, too few graduate jobs
Sending half our school-leavers to university may have looked an admirable objective but the consequence is a supply of graduates that exceeds demand. If a giant like BT wants no more degree-holders, why should other companies?
You can’t blame loss-making BT for suspending its graduate recruitment programme when it is laying off existing staff. Even when it was a nationalised industry it was not its responsibility to implement government education policies.
Yet while students should not have applied sheep-like for degrees whose value would be devalued by volume and while they might have foreseen the oversupply, they cannot be blamed for the sudden fall in demand for their services. When they entered the higher education pipeline companies were recruiting; unfortunately degrees have a three-year lead time, and just like those empty blocks of flats and office buildings planned in better days, students are coming on the market when the market is hit by recession.
Companies can survive a year or three without a graduate intake. The corporate profile may be distorted for a few decades with the class of 2010 always absent, but qualified people can be bought from rivals or the lost graduates will find jobs later, armed with whatever experience they gain elsewhere. No doubt when the recovery is underway, firms like BT will make up for their lost years by recruiting more than the usual quota.
The hit for the students is greater. Their options are to trade down to the jobs they could have had when they took their A-levels, take another gap year or, like a losing gambler who doubles his stake money, stay on at college to take further degrees in the hope the jobs market looks better in future.
What should give is starting salaries for graduates. BT’s £27,000 was generous. If a starter from university is not even half as productive as an established worker, why pay more than half the wages?
If graduates were cheaper, companies might employ more of them. More to the point, if graduate pay was lower, more school-leavers would go straight into work instead of spending three incomeless years running up debt for a poor future reward. That would upset that government’s target of 50 per cent of youngsters going to university but it would bring supply back into line with demand.
