Three lots of graduate employment data were released this week. For recent graduates, the good news in that unemployment has dropped to 5.5%, though another 12% are in part-time or casual jobs and looking for full-time work. But for graduates overall, the ABS finds that unemployment is only 2.4%. Today’s ABS job search data shows that half of unemployed graduates have been out of work for 8 weeks or less. Just 0.4% of graduates in the labour market have been unemployed for 6 months or more.
But does this mean that Bob Birrell is right that we have too few graduates? The latest ABS graduate employment data again shows that he is wrong. Many graduates are employed in jobs that do not require degrees, such as clerical or sales jobs. Counting them and unemployed graduates together, and we have a ‘reserve’ graduate workforce of more than 460,000 people. That’s equivalent to nearly three years of university completions.
Picking the ‘right’ number of graduates is, however, very difficult. The annual counts of graduates and their occupations in the ABS Education and Work survey conceals large flows of people in and out of the occupations in which degrees are often required – professional, associate professional and managerial. The ABS Labour Mobility survey helps us track this. Between February 2005 and February 2006, nearly 400,000 people entered these occupations, 222,000 who were not working the previous February, and 171,000 who were previously in other occupations. Both these categories could include graduating students, though clearly not all of them were students. There is no 2005 completions data yet, but in 2004 106,650 Australians completed an undergraduate degree.
On the other side, nearly 300,000 people departed these occupations: 97,000 to non-degree jobs, 53,000 to unemployment, and 147,000 to ‘not in labour force’. So a net expansion of jobs in these categories of just under 100,000 for the year conceals the best part of 700,000 people moving in or out.
Another complication is migration (pdf). For 2004-05, 47,000 Australian residents in these occupational groups who had been living overseas for a year or more returned to Australia. Also, 40,000 people in these categories migrated to Australia. Going the other direction, 74,000 people in these occupations left Australia for a year or more. The net effect was to add about 13,000 people to the ‘graduate’ workforce, but more than 160,000 people changed their place of residence. Also, 13,000 overseas students already in Australia were granted permanent residence.
As can be seen from these figures, calculating the ‘correct’ number of graduates each year would be no easy task. Even if we could produce reasonable estimates of employer demands, graduating students are just one part of a dynamic situation. Birrell is correct that some migration is due to too few local graduates, but this is in specific occupations, reflecting a misallocation of students between disciplines rather than too few students overall. But, overall, the graduate labour supply is still stronger than demand for jobs to which graduates usually aspire. In the data I have collected from 1992 to 2006, there have only been two years in which the pool of graduates who are either unemployed or in non-degree requiring occupation has shrunk. In all other years, we have added to the pool of under-utilised graduates. Having a degree is still good insurance against being unemployed, but it is no guarantee of a job that needs the skills supposedly acquired through higher education.