Starting salaries for graduates have fallen over the last five years, fuelling fears students will be discouraged from going to university because of the poor return in wages for the fees they have paid.
A study published today shows that the average starting salary for graduates in professional employment has fallen by 11 per cent – from £24,293 a year to £21,702.
Even in jobs with traditionally high starting salaries – such as medicine and dentistry – pay has fallen since 2007 by 15 per cent and 9 per cent respectively.
The Government has responded by trying to emphasise that a degree is still a valuable investment, but students have expressed concern at the findings. It prompted one students’ leader to warn: “We are the first generation in modern history who stand to be worse off than their parents.”
Sally Hunt, general secretary of the University and College Union, added: “It would be a tragedy if people were put off university because of the Government’s punitive policies. Many have been led to believe they would be well-paid with graduate premiums that the Government made much of when they were forcing through their failing reforms [to fees].”
There were pay rises for only two subject areas throughout the entire system – materials technology and librarianship and information technology – up 13 per cent and 3 per cent respectively.
The research, carried out for TheCompleteUniversityGuide.co.uk from an analysis of the Destinations of Leavers from Higher Education guide, showed English, French, law and architecture graduates were amongst those who suffered the worst.
For English graduates, the starting pay fell from £21,525 in 2007 to £18,065 in 2012 while law graduates saw a decline from £23, 172 to £19,246.
Perhaps more worrying for graduates was a substantial decrease in the “graduate premium” – the gap between earnings of degree holders and non-graduates – for some subjects. French and English showed a decline with the gap decreasing by £1,361 and £1,302 respectively. The biggest fall in the gap was in the social policy area where it fell by £2,048.
There were some big winners, too, though, with graduates going into building increasing the gap between them and non-graduates by 77 per cent (£3,129). They were closely followed by materials technology and librarianship and information technology students (up 72 per cent and 67 per cent respectively).
Overall, the graduate premium showed virtually no change since 2007 – falling from £6,732 to £6,717 after adjustment for inflation.
Dr Bernard Kingston, the principal author of the guide, said: “These figures must be a concern to students when choosing what to study at university.” He added: “It is helpful for young people considering which subject to choose to see how the earning potential for the occupations changes over a short period of time. While financial considerations may not be the only consideration, they are becoming more important. However, with a volatile labour market, it is difficult to predict the future for an particular subject.”
Dom Anderson, vice-president of the NUS, said today’s graduates were leaving university “to face a bleak labour market”.
“Graduates are queuing up for jobs in an incredibly competitive market which leaves little incentive for employers to raise their wages,” he added.
A spokesman for the department for Business, Innovation and Skills said: “A degree is still one of the best routes to a good job and rewarding career. Typically, those with a degree earn considerably more over their lifetime – an estimated £165,000 for men and £250,000 for women.”