Graduate unemployment and over-qualification goes up

The latest issue of ABS Education and Work, out today, shows that we are charging towards Julia Gillard’s target of 40% of 25-34 year olds having a university qualification by 2025. Only last May, the government’s higher education policy document said:

The current attainment rate for bachelor degrees for 25 to 34 year olds stands at around 32 per cent, and under current policy settings this is likely to rise only slightly, to around 34 per cent by 2025.

But Education and Work says that we had reached 34% (34.6%, to be precise) as those words were being published. There could be some sampling error involved, but the combined effects of more educated younger cohorts aging, continued mature-age education, and a large migration program heavily biased in favour of graduates means that a reasonably strong growth rate was always likely. If government forecasters using 2008 data can’t predict what will happen in 2009, what hope have they of being right about 2025?

Education and Work also brings bad news for the argument that we are very short of graduates and must produce lots more. Last year, 26.3% of graduates with jobs were working in occupations that did not require a degree. This year, it has gone up to 27.4%. Graduate unemployment has gone up from 2.1% to 3.4%. Admittedly, 2008-09 was not a good period for the labour market overall. But if the boom years up to 2008 couldn’t do much to utilise our graduates better, it suggests our policymakers should be cautious about promoting a large expansion in university enrolment.

40 thoughts on “Graduate unemployment and over-qualification goes up

  1. “Graduate unemployment has gone up from 2.1% to 3.4%.”
    3.4% in the current climate seems like a wonderful number to me (especially because I’ll bet there is also less hidden unemployment amongst graduates than other types of workers), which shows that even those graduates that don’t get a job that requires a degree generally have vastly better prospects than those that don’t go to university at all.


  2. I think its slowly dawning on people that university is basically a useless fraud designed to keep the dole queues down. There’s half an argument about science/engineering degrees being worth it, but in the main university courses are a pestilence that will destroy you for life.

    They are wonderful, however, for keeping some of the laziest human beings (university admin and faculty staff) in cushy jobs for life.


  3. Why do I have the feeling that we’ll soon see the usual Bob Birrell quote about how wonderful a university education is, and how much more you’ll make out of it in earnings.


  4. We shouldnt be ‘cautious’ about expanding enrolments, we should simply abolish the higher education sector once and for all. We could consider some targeted science and maths training, and obviously medical and dental training. But thats about it.

    University is totally and utterly useless, a fraud designed to keep dole queues down. Strangely nobody mentions it, because the students want to belief their worthless lives will have a point once they have a ‘degree’ and educators want to keep their jobs.


  5. “We should simply abolish the higher education sector once and for all”
    That would be a great idea, since it would get rid of all the pesky graduates (apart from the occasional immigrant) that might compete for the jobs that those of us that have degrees do.


  6. Conrad – Unemployment rates for people with undergrad diplomas and certificate III/IV voc ed qualifications were 4.3%, so if we assume that these are the main alternatives to university a bachelor degree offers only modest extra insurance.

    There is also the argument that while individually acquiring a degree may be rational – the uni lifestyle is often fun and it probably has some slight unemployment insurance effect – it does not make public policy sense as it simply displaces unemployment by graduates taking jobs that could be done by people with other qualifications or no qualifications.


  7. conrad, please tell me what jobs really require ‘degrees’ ?

    I accept that say engineering, dentistry, medicine all require degrees but apart from this most of the rest – notably law, business, teaching, its all garbage ‘credentialism’.

    There might be some limited scope for higher maths or science degrees but given how toxically useless and backward australia is here we might as well not bother here either.

    Most of the people I know who left high school in year 10 or 11 have much bigger incomes and savings than I have.

    University is just a useless fraud. Seriously lets get the word out and shut them down.


  8. EDM= Engineering, Dentistry Medicine.

    The potential cost savings to the Australian taxpayer of abolishing all higher education except for EDM are absolutely massive. The resulting human capital and productivity surge would also be enormous, leading to a new level of wealth in the economy.

    This is an idea, previously unthinkable, which grows in strength every day.


  9. Woah! Somebody stole Helly’s and Roger’s good memories of Uni!

    I don’t know much about the research side but I know something of the student experience.

    Someone much older than me once told me that you don’t go to university to do a degree so much as to begin to find out who you are. Of course this process would start anyway wherever you were but some people have a genuine interest in ideas and the life of the mind, and a university is the best place for them to indulge and develop this interest.

    Of course, you also study your subjects, which should develop your cognitive abilities and critical thinking, as well as help you to develop a specialisation.

    My undergrad degree was in economics, which although it isn’t on Roger’s list is an area of knowledge which quite a few businesses draw on. Being able to use my degree and experience to help others is very fulfilling and just as important as my fortnightly pay cheque.

    Could I have developed the skills that I needed to become an economist outside of university? Most certainly, I think. I suspect more of an ‘apprenticeship’ approach to the discipline would be good – working as a practitioner at the same time as learning the theory would be a good way to develop as an economist.

    But the very best economists bring more than economic theory to their work. A good grounding in maths, politics, history, and logic also help. This takes time to develop, including spending a lot of time in the university library and talking with peers. I believe this time-intensive development is the same for every other discipline – science, law, engineering, possibly even dentistry. The university provides the space for this, and I don’t think anything else can take its place.

    Sure, I had no money, but I had lots of time and was surrounded by interesting people. I learnt a lot – including how to write well and how to think clearly – and made some valuable friendships. And I think I’m a better person and more valuable employee for it.

    The universities aren’t perfect. But their bad luck is to have been captured by interest groups whom nobody is interested in helping, so the universities in turn suffer. Andrew’s ideas for improving them would very quickly work wonders in bringing them to their potential. I wouldn’t be so quick to close them down.


  10. Roger,
    if it’s true that there are so many professions that don’t really need people that require degrees even though everyone employs those that do, then you should start up businesses in those areas, except employ high school leavers versus those with degrees. Since the latter is much cheaper to employ, you will be at a massive competitive advantage, and you’ll make a killing. I’ll be the first to congratulate you.
    Also, if you’re really worried about the money, you could just advocate the full privatization of universities, in which case you wouldn’t have to pay a cent more, and those that think it’s a good idea can still go.
    “Most of the people I know who left high school in year 10 or 11 have much bigger incomes and savings than I have.”
    This just shows your ignorance — your experience isn’t necessarily reality for everyone else or reality as the ABS tells us. Why don’t you look up the outcomes (e.g., wages, unemployment, etc.) of those that don’t finish high school and then tell me how much less they make. You’ll find the statistics arn’t very pretty.


  11. ‘the uni lifestyle is often fun ”

    Really? Maybe if you are from a private school with an endowment.

    Try telling that to a part-timer with kids and a mortgage and a pressure job being sneered at by students and staff alike. With the library closed by the time you get out of class and parking fines almost as expensive as HECS.

    Or try telling it to the student I know doing 24 contact hours a week and working 4 nights stacking shelves to pay rent and eat and going straight to classes after a 7 am finish at work.

    Why is there still the fantasy that “real” uni students are full time arts students with 13 contact hours a week with unlimited parental supplied funds, summer in Noosa/Portsea , winter in the snow and Mum’s old Volvo.


  12. fxh – Well most young uni students are from comfortable middle class homes – that’s why Comrade Gillard is setting enrolment targets for those who are not – and I expect most of them enjoy their time at uni, the occasional nasty assignment or exam aside. A lot seem determined to postpone entry to the ‘real world’ as long as possible.


  13. University is simply a worthless exercise. The comments on this board are really showing the underlying truth, that outside of say Eng, Medicine and Dentistry, higher education is scam run to benefit the staff that work there and to keep the dole queues down.

    We need an ‘education revolution’ – the complete dismantling and removal of all public funding of university education in this country outside of these areas.


  14. Conrad- thank you so much for pointing out my ‘ignorance’. Your ‘studies’ are wonderful, but I actually know for a fact that the people who work as tradies make far far more than the people lumped with useless degrees.

    The ‘studies’ that show university is worth it never mention the fact that they are not comparing like people with like.

    University is a fraud, and people are slowly waking up.


  15. Most of the people I know who left high school in year 10 or 11 are on the dole queue or doing sporadic work here and there. I have a friend working at one of those job networks she reckons about 80% of the long-termers have an incomplete secondary education and are competing for manufacturing jobs that often no longer exists, and then there are sent off to do a five-week qualification in “How to Switch on a Computer” or something ridiculous by some company with which the JN has some sort of informal affiliation.

    Also the only reason tradies are making more than some other comparative professions is simple supply/demand. And that’s because most people don’t want to be tradesmen. If there was sudden wave of young apprentices wages would drop substantially (look at angst in England about Polish plumbers bringing down the wages of the locals). It’s not like anyone is pointing a gun at young people to go get a white-collar job and a university degree – it’s simply that such roles are perceived as offering more autonomous and rewarding work. Hey even parents who are tradies encourage their kids to get an education they often weren’t able to get themselves.


  16. “But I actually know for a fact that the people who work as tradies make far far more than the people lumped with useless degrees. The ’studies’ that show university is worth it never mention the fact that they are not comparing like people with like.”
    You’re logically inconsistent. If university was useless, then surely it would be the _less_ intelligent people that went there, since the smart ones would know they would be wasting their time. Therefore, if anything, people with degrees should earn less than those that don’t have them — but that isn’t the case.
    You’re also wrong that tradespeople earn more than professionals. Here are the figures.


  17. Roger, I agree that ‘the potential cost savings to the Australian taxpayer of abolishing all higher education . . . are absolutely massive’ We should get the taxpayers out, but not abolish higher education. Let those who want to pursue higher education for either business (expected higher future earnings and lower expected likelihood of involuntary unemployment) or pleasure (university lifestyle) do so.


  18. Roger whether university is a waste of time or not is somewhat irrelevant. Many industries make having a degree a hurdle requirement for entry. If you remove all government funding then it means that only the upper middle class will go to university and then get all the jobs in said industries. Due to the reduced supply of potential employees prices will rise.

    Of course that already describes the state of many of the big law and accounting firms where a large fraction of the grad hired are “people like us”.

    However university gives people from a “working class” background a chance to sneak into the middle class. The pretense of social mobility is important.

    You are right that some industries would be better served by on the job apprenticeship style training. However in many there is a level of knowledge required before you are any use at all and you need to be able to prove you can know lots of abstract information. e.g. accounting, law, analysis jobs, finance, most areas of science, engineering, health sciences, etc..


  19. Many university graduates have disappointing careers. Some are unemployable, despite glittering academic transcripts. In my observation, that is due overwhelmingly to personal failings rather than the value, or not, of their university education. A degree gets you the entry. After that, whether your career prospers depends on work ethic, street smarts, luck, judgment, ability to get on with others, ability to lead others, and organisational politics.


  20. M – The trouble with the first part of your argument is that employers have started preferring graduates for jobs that don’t really require them because there are so many graduates available. They use it as a taxpayer-funded screening device. This displaces people who could do the job, who on average will be from a lower class background than graduates. So while mass cheap higher education has eased some formal barriers to social mobility, it may be increasing informal barriers.


  21. “The trouble with the first part of your argument is that employers have started preferring graduates for jobs that don’t really require them because there are so many graduates”
    People say this, but I’m yet to believe it, since graduates cost more to employ. It seems more likely to me that employers want people who can function well, and not surprisingly, graduates who have 3 years more education generally do a better job than high school leavers. If that wasn’t the case, why wouldn’t employers save money by finding employees willing to work for less (i.e., 18 year old high school leavers)?
    For example, M’s comment (20) suggests that some industries simply require degrees as hurdles. However, I find that hard to believe in non-monopsony areas (like accounting). Surely these firms would save money any way possible, and if it was really possible to get cheap employees that didn’t have the extra training, I can’t see why they wouldn’t (no doubt many already use overseas outsourcing for whtie collar drudge jobs) — indeed given the competitive nature of accouting, if they could get the cheaper employers, not doubt they would almost be obliged to.


  22. Johno – yes I agree with you, government should remove all funding for higher education, but of course if people want to voluntarily pay for something they can.

    I think there is a role for government in training Engineers, dentists, doctors, all the rest though is a useless scam designed to reduce the dole queues.

    I should also be more explicit, my main personal experience is in law degrees. These DEFINITELY are an open scam, there are no jobs for lawyers, haven’t been for 20 years. The 5% who make it to biglaw (who’s customers are public companies and governments who always overpay) do ok, everything else is shit.

    Most of my friends with law degrees ended up just taking them off their resumes. Law degrees have the same effect as smearing your resume in excrement.


  23. Graduates don’t cost more to employ when a flat salary is offered and many people compete for the position. Graduates are forced by circumstances to apply for roles below their abilities because no other work exists. Salaries are take it or leave it, and graduates usually have to take it.


  24. Lets just stop lying to people – university degrees are a useless waste of time which will destroy your life. Remove all funding for higher education and watch the revenue and productivity surge.

    I would also go further and strongly question the need for year 11 and year 12 education – most of this is garbage as well.

    Lets face it ‘education’ is a useless myth which papers over the fact there isn’t enough money to go around.


  25. Graduates typically don’t cost more to employ – there is a very large ‘wage penalty’ for not being in a well matched job. In other words, the main driver of graduate salaries is the skills required by the job, not the skills possessed by the employee if these are surplus to requirements.


  26. Watch out everyone – any minute now Bob Birrell will come out and tell us all that ‘University is worth it!’.

    And naturally the media will give him saturation coverage as usual.

    In Victoria its interesting – overseas students are now openly waking up to the higher education scam, and the response by the state government is to simply paper it over with more and more advertising and garbage to keep the gullible coming here with their wallets.


  27. “Law degrees have the same effect as smearing your resume in excrement.”

    Have you considered a career in art, Roger? A resume smeared in excrement might well make it into the Tate Gallery.

    Your law degree might not be useless after all.


  28. Andrew I agree with your comment number 22. A uni degree is just a screening mechanism to find out if you can hand in enough assignments on time to pass (or sweet talk your way to a pass, which is still a useful skill).

    @Conrad 23, with something like accounting you need workers who can demonstrate they don’t make lots of mistakes, are good with numbers and can understand complicated rules and regulations. Passing a uni degree is on one level just a really long winded aptitude test.

    Also in many areas the first year out grads get really crap pay ($40-50K for 50+ hour weeks). Those who are good rise fairly quickly. Those who are getting much better starting money are either in a niche undersupplied area or considered likely to be very good at what they do or maybe the employer just plans to work them to death.


  29. Conrad, whether or not there are more law students than lawyers isn’t the point.

    The point is the toxic unemployment among law graduates (and the fact that most of the graduates who report being employed are in fact working in call centres or as waiters).

    Most of my friends are unemployed, or working in dead end service jobs they could have got after year 10 at high school.

    And the biggest lie of all has has to be ‘Law is a broad degree which will help you get lots of non law jobs’. This is a simple lie, all my friends have deleted their law degrees from their resumes – and have had a massive rise in job interviews as a result.

    Every law faculty should be closed for 20 years to help the market adjust.


  30. I still remember my first day of university enrolment 20 years ago.

    A bunch of bored, lazy admin staff doing the minimum work required while a huge queue of university lemmings waited around.

    Very tellingly, we needed to borrow a pen at the very finish for something else, they refused to lend one to us, insisting we spend $1.50 pn a pen the university was selling.

    I should have known then this was the first of the long mugging/shakedown that universities conduct on their students.


  31. “The point is the toxic unemployment among law graduates”
    Says who? I’m happy to believe ANs analysis (click through links — I wasn’t initially — you need to calculate the numbers). Sure there are unemployed law graduates, but there are unemployed graduates in all areas. This is the problem with anecdotes “my unemployed friends” versus reality. I have the opposite anecdote — all my friends from uni are happily employed, but the area most work in actually has an unemployment rate higher than average for graduates. Perhaps I just hang around with hard working people.


  32. ‘Hard working people’ – its wonderful if you’re actually offered a job, and get the chance to be hard working.

    I’ve looked at what’s been posted here. The statistics do not show what would have happened if the law graduate hadn’t gone to law, wasted all their energy on a course that will put them in the gutter for life.

    The university scam is finally coming apart.

    Basically higher education is a rort kept going by greedy staff and administrators anxious to keep their cushy jobs – and they are unconcerned about how many young lives they ruin.

    Its time for the real education revolution – a total shutdown of the higher education system, as well as Year 11 and 12.

    We can afford this stupid credentialism any more.


  33. Roger I do like your word “credentialism”. I think you have identified something that is real.

    However if higher education is a rort, it actually has to be a conspiracy between the professional/managerial classes and their Ivory tower mates. But what do the managerial class gain from making their potential workers jump through hoops you claim are a complete waste of time and money??

    Also remember that many people in university wish that they could stop teaching undergrads at all since they are a waste of space (and makes the ques longer at the local cafes and pubs).


  34. “But what do the managerial class gain from making their potential workers jump through hoops you claim are a complete waste of time and money??”

    As Andrew said, they gain a 3-year trial period paid for by the tax payer that ensures the person they are employing has a decent attention span. Nothing more.

    The reason that people prefer graduates is that graduates have at least proven that they can stick with something for 3 years without throwing in the towel. Maybe that’s not the best indicator in the world but it’s better than no indication at all, when you are talking about school leavers.

    The question is whether the general public should be funding the $100,000 it costs to apply that test.


  35. Yobbo – While the cost of degrees varies by course, most graduates cost the taxpayer a third or less of the amount you cite. There is of course still a legitimate question about whether the money is well spent.


  36. Curious about debate regarding more university graduates in Australia, but which course areas? What is driving the need to study “any” university degree?

    The US has found that they are now dependent upon foreign students to study the hard (science) subjects which US students cannot or will not study. This has been attributed to quality issues in high school, i.e. lack of maths science teachers to required competency is impacting the matchs science skills of high school graduates.

    In Australia, like Britain, the cynic would suggest that the objective of more graduates seems to be driven internally by university stakeholders (survival), and families desire for middle class status.


  37. i totally agree with gluggy, whilst you are studying law at unviersity everyone says “you’re studying law that’s wonderful -here have a part time job” – then the minute you graduate – no-one wants to employ you with a law degree because “you’re overqualified, you’ll want too high a salary, you’ll be bored, you’ll want a promotion/raise in 6 months time etc etc” it is like having a law degree is toxic – this comes from someone who studied soooo hard at university to get straight distinctions, worked my butt off waitressing/stacking shelves at coles at night/ working admin jobs because i didn’t qualify for aus-study, then has been working in a call centre for the past few years and have been applying for jobs EVERY single night. Worse is that in South Australia they have gone from one to three law schools. Call me cynical, but that is about raising unversity revenue (lots of people want to study law) as opposed to having regard for the actual need for that many law graduates. Gluggy I would love to know what sort of jobs you’re law school friends are working in – I really need some help.


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