These days a degree is the minimum qualification for Knowledge Workers. Few slip through the net without a formal degree. Higher education is an entry ticket to the world’s more interesting – and rewarding – jobs.
But, the hard-gained entry ticket that almost sent you bankrupt and had you working like a galley-slave through the best years of your life only gets you into the ball park. It doesn’t mean you get to see the game. Indeed, some graduates are lucky if they can get as far as walking up and down the aisles selling trays of beer and peanuts.
Not only are there unemployed graduates, but also, incredibly given all the propaganda we keep hearing about a skills shortage, unemployment levels for recent graduates are higher than for the wider population.
In round numbers 15 percent of Australian graduates fail to find work within four months of leaving the hallowed gates of academia. (This number is from the 2007 Grad Files and is lower than in most recent years). Australian unemployment is 4.3 percent. This is close full employment – one recruitment agent told me the only people in Sydney not working are those who do so by choice. In New Zealand the gap is smaller, the most recent comparison I can find is in 2006 the graduate unemployment rate was around 6 percent while general unemployment rate was 3.4 percent, which again is close to full employment.
How does this full employment across the economy square with the reported higher levels of graduate unemployment?
Not only skills, experience too
First, industry doesn’t just demand skilled workers, it wants experienced skilled workers. This isn’t unreasonable. However, few organizations train anybody, which is unreasonable.
When I left university (some years ago) – admittedly in the UK, but I know the Australian and New Zealand experience was similar, most companies operated some form of graduate intake programme. These have gone the way of the typewriter. You rarely hear of them any more.
To some extent, you can blame governments and trade unions for this situation. By insisting on minimum wages and other expensive conditions these well-meaning groups have effectively priced entry-level jobs out of the market. I’m not advocating a return to 19th century employment practices, but a few years of relative financial hardship is a small price to pay for gaining high-quality experience.
A second problem is the business of vocational education. A generation ago universities turned out sociologists, linguists, physicists and philosophers. Today, reacting to what university authorities describe as ‘market forces’, our institutions of learning tend to send people into the world with law and business qualifications, computer science and sports science.
The problem is that universities sell these vocational degrees on the basis that they prepare people for the workplace. They often collude with large employers to make sure courses include skills needed in today’s offices and call centres. Learning how to print fancy-coloured margins on a Microsoft Word document can count towards your final degree.
To an extent, these vocational courses do successfully manage to give employers pre-packed units of production. For example, if you’re hiring public relations staff you can find graduates already versed in media or communications studies. Not surprisingly school leavers queue up for the vocational courses which seem to offer a fast-track to the top. This most popular courses tend to be in vocational areas like law, business and commerce.
There’s just one flaw with this move to vocational higher education. A closer look at the graduate destination figures shows that students with vocational qualifications don’t necessarily have better job prospects than those with more academic qualifications. Some vocational courses have relatively high levels of graduate unemployment and some academic graduates manage to score better starting salaries.
For example, almost 15 percent of Business Studies graduates are still unemployed and looking for work four months after graduation. Of those that find work, the average starting salary is A$40,000. The nearest academic equivalent to Business Studies is Economics. For some reason Economics is known as ‘the dismal science’. Yet young economists have little to be dismal about, only 12 percent are still unemployed four months after graduation and their average starting salary is A$45,000.
You don’t need an Economics degree to figure out that the job prospects for both types of graduate are roughly equal, but Economists have the edge over Business graduates.
Now I’m certain that many readers will regale me with stories to show what a fun bunch of guys there are in university accounting departments and how urban planning degrees are just one long barrel of laughs. (Looking at the fruit of their labour after graduation it’s clear the party never stops). But based on the evidence of the graduate destination survey, I’d like to suggest that, in the long term, vocational degrees are no more valuable than more general degrees and that most people would regard studying them as less fascinating.
In other words, from a purely financial point of view, you might as well follow your heart and study the subjects that interest you the most. There’s an important by-product of doing this. If you love what you are doing, you are more likely to make a good job of it. And that means you are more likely to succeed.
Oh and one last point. Remember this, many of the best jobs in the knowledge economy – and some of the best paying jobs – require creative skills. You’re not likely to develop those pouring over dull vocational textbooks.