The UK Graduate Unemployment Scourge: Why Today’s Graduates Will Find Themselves in the Toughest Jobs Market in Living Memory

by Andrew Alexander
The views represented in this article are solely those of the author and may not be construed as in any way representative of the views or policies of Oxford Royale Summer Schools.

Image shows someone circling job adverts in red pen, with a cup of tea in the foreground.

Image shows Neil Kinnock in 1984.
“If Margaret Thatcher wins on Thursday, I warn you not to be ordinary. I warn you not to be young. I warn you not to fall ill. I warn you not to get old.”

If Neil Kinnock were to revisit and update his desperate 1983 appeal to the electorate to turn back the rip tide of Thatcherism, he might now warn us not to be young.
Today’s graduates get a very raw deal – they are graduating into a country which has accumulated a debt they will spend their working lives servicing in order to cosset a generation now in or nearing retirement, a generation whose longevity and sense of entitlement has and will continue to promote the transfer of wealth from the young to the old through the welfare state, the rigging of the property market through monetary policy to privilege assets over aspiration, and a disproportionate tax dependency from the state on work-related earnings. Today’s graduates emerge also into a socially fractured country. The relentless self-interest that has driven British public life from the 1980s onwards has destroyed the social fabric of the nation and England in particular has, for at least 20 years, become a less pleasant place to live with each passing year.

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But then, for graduates, to have any job at all is to be doing well. Nearly 40% of graduates are looking for work six months after graduation, with 25% still unemployed after a year. Fully half of those graduates surveyed by the website wished that they had not entered higher education but had instead chosen a more vocational route into the labour market. Of those who do find jobs, 47% of those who find jobs within six months do so by filling positions which never required a graduate qualification. This depressing situation is mirrored in the salary stakes, with an average starting salary of £19,935 six months after graduation, a net take home of £1,337 per month after tax, NI and student load deductions, or roughly the same as the monthly rent on a one bedroom flat in Finsbury Park. This is not a problem confined to those graduating with third class degrees in media studies from universities barely worthy of the name – neither Oxford nor Cambridge can offer an average graduate starting salary of over £25,000.
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Image shows Pasternoster Square, a hub for investment banking in London.
A postgraduate degree may not prove an advantage in the competitive field of investment banking.

These problems are arguably compounded at post-graduate level. While academic prowess in technical subjects is highly valued by the government and international intra-governmental agencies, the more specialised the qualification, the fewer the opportunities and the greater the competition from equally qualified job-hunters. In addition, the private sector prefers to mould junior employees and in many cases having a post-graduate degree can be seen as a disqualification, making a candidate less malleable and more head-strong. Nor are employers blind-sided by the candidates who extend their studies for want of any alternative plan – I know of at least one London investment bank that begins interviews with graduate students with “so, why couldn’t you get a job first time round?”
Not all graduates face a dismal future, or even a difficult one, but the median graduate, the product of ambition and limited means, certainly does. This is the generation that will bear the sins of their fathers more heavily than any other since that condemned to fight a second world war. The causes of this range across the social policy spectrum; none of them are economic, per se. This might be surprising, particularly in the light of the recent recession. My argument, however, is that the situation faced by graduates is the inevitable consequence of bizarre, stupid and perverse policy-making by their parents’ and grandparents’ generations. The crash accelerated the turning of the wheels, but the direction of travel was never in doubt. With this in mind, this article will explore the reasons for the difficulties that today’s graduates face.

The culture of the unreal

Image shows UK Prime Minister David Cameron.
Britain’s energy policy is another example of the culture of the unreal, rendering us dependent on unreliable sources of energy and vainly hoping that effective nuclear fusion will be developed far sooner than is plausible.

“If everybody is somebody, then nobody is anybody”; so say Gilbert & Sullivan. Unlike our Victorian forbearers, the modern Briton does not concede this point. The culture of unreality that pervades modern Britain is an essential part of the modern political system. Making policy in all areas from foreign affairs to domestic budgeting has become a three-stage process – first the government decides what it would like to do based upon the warm feeling of self-approval that its actions are likely to engender. After this, the government decides what effects the public would like to see their government’s actions bringing about in the best of all worlds. Finally, some heroic, albeit discordant, assumptions are meshed together in a narrative that connects A and B. Because the final step often involves immensely counter-intuitive feats of illogic, it is immediately supported by media commentators anxious to demonstrate their personal insight into the complexities of government. One example should suffice – untrammelled immigration from other EU member states creates a pleasant feeling in the liberal hearts of civil servants and government ministers. It would be undesirable for such immigration to cause unemployment to the average Briton. As a result, the country is invited to believe that the arrival of hundreds of thousands of skilled foreign professionals prepared to undercut British wage demands has absolutely no negative impact on the employment rate of the existing population. This is an impossibility under the rules of both logic and economics, but also widely held to be a fact.

Image shows a NASA centre under a dramatic sky.
Some degrees offer better career prospects than others.

The culture of the unreal has had a profound impact on graduate choices and outcomes. One of the culture’s most important features is the idea that it is morally wicked to discriminate between lifestyle choices that affect only the individual. In this view it is right that society unhesitantly celebrates the choice of an individual as sacrosanct rather than challenge it. I can see that this has some applicability to contemporary, consensual sexual ethics, but it is a lousy way to train a generation. It may give a great sensation of equanimity towards the world to say, as the Blair governments did, that 50% of the country should be going to university and that all of them would find it useful to do so, but it is not true. To employers, a degree in engineering from Oxford is worth a great deal more than a degree in English from Portsmouth. The cost of both options in terms of capital outlay may be very similar, but the real rate of return will be very different once likely lifetime earning enhancements are taken into account. To argue that all degrees are of equal value in the wider world is the same as to argue that all competitors are winners in a school 100m race. It is a nice idea, but it is not how the world works, and we would do better to allow teenagers to make an informed decision about higher education based upon their true prospects than we would to repeat the mantra that a degree, no matter what degree, is vital to their lifetime outcomes.

Image shows an electrician working on high-voltage wiring.
Practical skills are undervalued in our society.

A second part of the culture of unreality is the devaluation of skill. We live in an economy where the likelihood of a child from a working-class background making a prosperous life for him or herself is directly correlated to personal willingness to spend a large amount of time doing something utterly useless. Learning a skilled trade, producing something physical, making and creating; these are all sure-fire routes to relative poverty. You want to do a job whose title ends with –smith? Great, but I hope you do not also want to own your own home. The real money is to be made moving imaginary money between computer terminals, inventing heavily indebted internet start-ups allowing teenagers to send non-revenue-generative messages to one another, or maybe working in one of Westminster’s many acolyte industries that encourage our politicians in their greater delusions. Britain is run by people without any great talent or conviction other than in their own goodness and wisdom, as such it prizes the ephemeral over the real, the felt over the seen.
The fear of skill manifests itself in the way we structure our degree system. Along with the famous British refusal to organise or be organised, it is responsible for the fact that the country has no serious mechanism to push its brightest and best into technical disciplines capable of producing the innovations that would lead to a general rise in living standards. Instead, the blue riband degrees are those that encourage a generalist skill of persuasive argumentation, a pleasant social virtue, but not conducive to the progress of the nation as a whole. There are only so many who can be investment bankers, political lobbyists and internet moguls. The remainder of those studying for degrees in politics, for instance, leave university having gained no practical skill, no specialist expertise to exploit, and at least £27,000 of debt to show for it.

Globalised Britain

Image shows a Costa Coffee shop.
A single vacancy for a low-skilled position in a coffee shop can receive hundreds of applications.

The real argument about British university-level education, however, is also one about globalisation. I think there are a few things to be said here. The first is that it will naturally be far more difficult for British graduates to get a job when the country has become Europe’s employment clearing house. Competition, particularly in London is savage, and the British desire for cheap labour in sandwich shops brings with it very expensive labour on trading floors. We have made a conscious decision to present our children with incredible, pan-continental competition for every position in the big cities of the south, and we have done so for no obvious domestic gain other than a certain fleeting moral smugness. There is also the argument that the British now compete in a universal jobs market, and the skills required to so are not those we are adept at producing in our universities, but this is a question of demand and supply, and there is no reason to think that the country would be unable to expand its technical training capacities should the demand arise.
Most importantly, though, is that we refuse to use one of our few remaining global advantages – our higher education system – in the national interest. One of the reasons why British graduates find the jobs market so difficult is that many of the university places at outstanding British institutions are awarded to foreign pupils. Anyone who has spent time around the management of such an institution in the UK will know the time and effort that their management ploughs into attracting students from beyond the boundaries of the European Union. This is for an eminently practical purpose: these students can be charged much greater sums of money, and this money can be used to subsidise the university’s other students. Arguably, though, this approach leaves Britain with a smaller pool of highly trained graduates than it needs or is capable of producing. If the government prioritised funding to elite institutions, it would be able to ensure that those institutions trained people likely to remain in the country long after their course expired. Perhaps then, Britain would be able to gain full value for the educational opportunities it offers.

Image shows the 2012 London Olympics opening ceremony, focusing on the NHS.
As the opening ceremony of the London 2012 Olympics showed, there are still plenty of things to be proud of in the UK.

These are all reasons to be gloomy for today’s graduate. But there are reasons to be cheerful, too. This generation will graduate into a world where their ambition is the only limit to their possibilities. Information is available as never before, capital roams the world in search of good ideas to invest in, acceptance of the rights and privileges of all people irrespective of gender, skin colour or creed is more widespread and less controversial than at any other time in history, and as much as the world seems a smaller and more claustrophobic place, opportunities for travelling it and finding your niche are greater than they have been for any other generation ever alive. Britain has not managed its education system well, but it has not managed much well for at least a century and it is still a peaceful, law abiding, civilised country that does its best to nurture the needy and provide succour to the sick. Today’s graduates emerge into a country that is both in decline, and still one of the greatest places to live in the world – the challenge of their generation is to ensure that by the time their children graduate, only the second part of that statement is true.

Image credits: banner; Kinnock; banking; Cameron; NASA; electrician; Costa; Olympics