Update (August 2016): A recent report by a think tank called the Intergenerational Foundation has looked in detail at the so-called graduate premium. This is the extra amount on average that graduates will earn over their working lives compared with those who do not go to university. They concluded that the size of this “premium” has often been hugely inflated by politicians and others and that this amounts to a case of mis-selling.
The thing is that discussing a single, average figure is highly misleading because the returns to an individual vary so much by degree subject, university attended and the student’s personal background (such as whether they attended a state or private secondary school).
Lots of graduates end up doing jobs where they earn enough to have to make repayments on their student debt and this could effectively cancel out most of the uplift in salary they get from being a graduate in the first place. While the report definitely isn’t intended to put young people off from attending university, it should make young people and their parents weigh up very carefully the real value of the degree they are buying through their student loan repayments.
So is getting a degree a great idea or not?
Governments of every stripe in recent years have said a big “Yes!” to this and have pumped vast sums into expanding higher education. Universities have been turned into businesses that compete aggressively with each other to attract customers. When the costs started to balloon, tuition fees and student loans were brought in.
Faced with various half truths and the occasional downright lie from the government propaganda machine and the universities’ marketing departments, what are school leavers and their worried parents to do?
I have set out below the actual, real world reality as I see it. It should help you to weigh up the various options.
Over the next 20 years, the United Kingdom must create a society committed to learning throughout life. That commitment will be required from individuals, the state, employers and providers of education and training. Education is life enriching and desirable in its own right. It is fundamental to the achievement of an improved quality of life in the UK. (Dearing Report, 1997)
The graduate labour market
Fifty years ago people with degrees were a tiny proportion of the total workforce. This was not seen as a problem as the number of jobs needing high level brain power were equally small in number. Things never stand still however and changes driven by increased global trade and rapid technological progress led to the demand for higher skills outstripping the supply coming out of the universities. In addition, the elitist nature of higher education was being challenged.
Over the intervening decades in response to these pressures there has been:
- an expansion of higher education – Government grants were provided to enable students from middling and low income families to go to university. A positive outcome from this was a partial breaking down in social class hierarchy and greater social mobility.
- a reduction in the academic grades needed to get onto a degree course (for some subjects at less popular universities)
- conversely, for some courses at elite institutions, a steady increase in the A level grades required due to the increased demand for places
- an increase in numbers of students staying on to take A levels
- the invention of vocational courses which also took two years of full time study and were classed as equivalent to A levels. This resulted in a big increase in the student population of FE colleges
- an erosion of quality (at least for some students) with increased student-tutor ratios, reduction in the use of small group tutorials and so on
- an explosion of new degree subjects with many of these having (or claiming to have) a job-related element (so called vocational degrees)
- a shift towards degree entry for occupations which used to accept young trainees with A levels or their vocational equivalents
In 1950, just 3.4 per cent of young people went to university. Nowadays approximately a third do so. Successive government have encouraged and provided the funding for this expansion. Increasing cost has led to the burden being shifted to the student via the introduction of tuition fees so that today students provide about 60% of the cost of higher education with the remainder paid by the government.
These dramatic changes have led to a great debate between those who worry about the quality of teaching and learning falling as student numbers increase and those who see huge benefits for society and the economy and believe that further expansion is necessary. Then there is concern that big student debts will lead to the improvement in social mobility going backwards. A further worry (expressed recently by the CIPD which represents personnel professionals) is that it is simplistic to expect that the economy will magically somehow create the right number of extra high-skill jobs for all the extra graduates coming out of universities. They say that we have already arrived at a point where a significant number of new graduates each year struggle to find employment that matches their aspirations.
The crucial thing to understand here is that this problem is not spread evenly across all universities and all subject areas. Graduates from certain popular, higher status universities are (on average) more likely to find suitable employment and graduates from certain subject areas also have better employment prospects, including some students from lower status institutions.
On the job training
In the old days an apprenticeship was a much admired and highly desirable thing for many school leavers. Apprenticeships were a long term commitment between employer and young employee with some lasting for as much as five years. They were confined to manual trades that required lengthy training and highly developed skills. Some employers still provide this type of training with reasonable pay going up in steps to the full adult rate but again successive governments have meddled in things and reduced the standing of apprenticeships by watering down the quality of training while vastly increasing the number of occupations where it is possible to undertake one of the new-style, modern apprenticeships.
The government recently felt obliged to insist on all apprenticeships lasting at least twelve months which shows that in some sectors of the economy the new style apprenticeships are a pale imitation of the more traditional kind. Employers are free to pay their apprentices what they like, subject to a statutory minimum, and nowadays pay rates vary hugely across the range of apprenticeships. It is a fact however that many thousands of apprentices on the shorter, lower quality schemes are paid a pitifully low wage.
All of these developments are part of deliberate policies to deregulate the workplace and create a flexible labour market which means that company profits are maximised while the rewards for employees are pushed as low as possible.
As with the world of higher education it is very important to be aware of the big variations in apprenticeships so that a well informed decision can be made about whether to go for this option or not. As well as pay rates and the length and quality of the training on offer there are big differences in the standard and desirability of the qualification that apprentices gain.
For example, it is not unheard of for employers to recruit youngsters with level 3 qualifications from school or college (such as A levels) and then have them working towards a vocational qualification (such as an NVQ) which is at level 2. Level 2 qualifications are at quite a low standard (roughly equivalent to 5 “good” GCSEs) and thus do not add much to the holder’s career prospects.
Of course, the old adage that beggars can’t be choosers still applies and many young people make a pragmatic decision to enter these programmes as a way to gain experience and get that first foot hold in the world of work. It is also true that there are many good quality apprenticeships to be had which do not amount to exploitation and in fact provide an excellent start in working life for young people who prefer to learn by doing and not out of books!
Another important point to realise is that you don’t have to start an apprenticeship straight after GCSEs. Many students start after doing further study in sixth form or college. Bear in mind though that it can be harder to get accepted (because of the way apprenticeships are funded) once you reach the age of 19.
High Level Apprenticeships
There have always been employers who like to recruit bright school leavers at 18 or 19 who have done well in their A levels or Diploma and put them through their own in-house training programme. The picture has become a bit more complex with some companies deciding to opt instead for the government supported higher apprenticeship which leads to vocational qualifications at levels 4 and 5. An even more recent development is that work is now under way to develop new degree apprenticeships which will allow trainees to gain a degree while working and completely sidestep the problem of student debt.
Well ~ is it a good idea or not?!
Would you believe it – the answer is “yes” and “no”!
Some of the young people who currently choose to enter higher education would have better career prospects if they were to undertake a school leaver programme or apprenticeship.
The much increased numbers of graduates joining the labour market each year means that there are more applicants for each high-skill vacancy and therefore a greater risk of failing to find suitable employment. Obviously, this is a generalised statement. The jobs and graduates are not spread evenly around the country and this will make for variations in this competitive pressure.
Then there is the issue of the often mentioned mismatch between the vocational courses students choose at university and the need for new recruits in particular industries and occupations. Students who are keen to increase their chances of finding good employment might decide to choose from degree courses relevant to shortage occupations. This highly instrumental approach can be viewed as using their student loan money to “purchase” an entry ticket to a secure, well paid job. Scientific, engineering and maths related courses fall into this category as do many IT courses.
The school leavers who face the hardest choice are those intelligent, hard working youngsters who (for various reasons) are not expected to get mostly A*/A /B grades at GCSE or 3 B+ grades at A level. The demanding nature of academic work at A level and degree level means that these students may drop out part way through A levels or a degree. If they complete the course they may gain a low grade which will put them at a severe disadvantage when competing for graduate entry jobs. Such young people should at least ask the question “Will this really be worth the investment in effort, time and money?”.
How to improve your chances in the labour market
Finally, I would like to mention some strategies for young people to improve their chances of making a smooth transition from school to employment.
Work Experience – In many types of job application this is very useful and in some areas it is actually a requirement (or nearly so) to have some prior work experience. This could be through a programme run by school or might be voluntary work you arrange yourself. Even a very basic part time job can be worth mentioning depending on the kind of job you are applying for.
Qualifications – A bit of a no brainer this! Employers are busy people and if they receive a lot of enquiries about a vacancy they will need a way that seems fair to thin out the field. So apart from increasing chances of getting accepted onto courses, having good grades in things like GCSEs and A levels can sometimes make the difference between getting called for interview or not. Having additional qualifications (Duke of Edinburgh, Food Safety, Life Saving ) could also help with some applications.
Letter, CV and interview skills – Good schools will include some basic training in these things as part of their programme of careers education. If not then parents should step up to the plate. I cannot stress enough how important it is to give the right impression on paper and in person and to be as prepared as possible to give sensible answers to likely interview questions. For this reason interview practice or role play is really useful!
Team working and leadership – having some background in spare time hobbies, sports clubs and youth activities (Guides, Scouts, Cadets, National Citizen Service) can help to highlight skills in a letter of application or CV and in the interview situation.
Getting involved in school activities – this is another way to gain work related experience and skills that employers value. Examples would be enterprise events, school productions, fund raising etc.
Networking – This doesn’t have to apply just to older people looking for graduate level employment. Examples of simple networking activities for school leavers would include attending careers fairs and open days and the simple (but sometimes very effective) step of asking family members and their friends about possible work experience or job opportunities!
Helping out at home – Looking after siblings, helping in a family business, managing pets. Of course it depends on the job you’re going for but sometimes things that you would not necessarily think of as relevant to a job application will help give the employer a positive impression.