Hello, BlueSky 👋
Let’s try a thread.
We need to talk about UK graduate wages, and the idea that Britain sends too many people to university.
American readers should stick around for the UK/US comparisons 👀
First up: the UK graduate wage premium has fallen substantially over the last 25 years
Let’s try a thread.
We need to talk about UK graduate wages, and the idea that Britain sends too many people to university.
American readers should stick around for the UK/US comparisons 👀
First up: the UK graduate wage premium has fallen substantially over the last 25 years
Comments
Only speaking personally as someone with too many STEM degrees, I agree that the UK job market just doesn’t have the demand or the wages, if I had gone in to STEM I’d haven’t less than I did in a field that requires no actual qualifications. That’s the UK now.
GRAD VS NON-GRAD
I’d love some further breakdowns by what people study and their grades. Does London attract a disproportionate number of:
Private sector jobs?
Finance and Tech jobs?
High-achieving grads?
Thread easy, with images, with markdown links and the ability to @ mention other users here 😉
Is the issue a lack of large businesses outside London to pay better rates?
Or London firms moving to the regions to reduce salaries?
Illuminating. Really important analysis leading to a much-improved re-framing of the problem.
It would seem plausible that the most underpaid positions have seen an improvement but graduates not so much.
In Canada in the 90s min wage could afford the basics, food, rent, utilities, even leisure money
Now low end rent is almost the whole paycheque of working full time
Min wage increased but costs increased far more
Minimum wage 1997 -> 2023 : 68%
So if your job was paid say 3x minimum wage in 1997, in order for you to still make 3x minimum wage, the salary of your job must have been increased almost 1.5x the inflation. Not very common I assume.
The graphs above are comparing graduates (accountants, teachers...) whose salary might not have been raised as much as min wage
If people with minimum wage are paid 68% more but are worse off than then, the lifestyle of people who only got increased by 30% has decreased even more.
At least where I live
In the 90s low end rent was a 3 br for $700
Now low end is $2700 for a 3 br
Min wage was $7, now $16
Food has also more than doubled
It seems likely that graduates salary increased less than min wage if min wages increased 150% of legal inflation.
I noticed most of the FT team seem to have accounts here now. Will you all be posting more here in future?
On Xitter, the opposite process is under way, and the quicker we starve it of content and traffic, the less important it will become.
https://this.how/threadWriterForBluesky/
• Can’t include charts
• A good thread is not a big chunk of text split into equal sized chunks. It’s a series of separate points, some longer and some shorter
But indeed, no pictures yet.
In 1997, graduates in the UK earned almost 50% more per hour than non-graduates. Today, that’s down to a bit less than 40% more.
Having a degree brings back smaller rewards in the job market than it used to.
As more people go to university, having a degree becomes less of a luxury.
In economic terms, as the supply of graduates increases, all other things being equal the price of graduates (their wages relative to non-grads) falls.
The graduate wage premium has fallen everywhere *except London*.
If you work in the capital, having a degree is just as valuable today as it was in 1997.
Cities with more international students have lower wages
In Vancouver some chem lab jobs, that require education, pay barely above min wage
Used to pay close to double min wage
If the number of graduate jobs keeps pace with the number of graduates (as it has in London), having a degree is very much still worth it.
Supply has been outstripping demand for more than two decades.
But it gets worse if we look across the Atlantic...
Grads in America have a far higher earnings premium than grads in the UK, and the wage premium has been *rising*, not falling.
Grads in SF & DC earn almost 70% more than non-grads. In the UK’s second largest city, grads earn just 30% more than non-grads.
(that's generally the dynamic in large US cities)
Elsewhere the explosion in university attendance has its merits but in many cases the degree brings no £ benefit and holders do 'average pay jobs'
- like what you've done, but salary is not a very good proxy for job quality, too affected by London. I used occupational data in my UUK report on this topic
- more variation in regions than between them eg Manchester and Cumbria, Leeds and E Yorks etc
Another excellent article of yours👇
(P.S. Thanks for posting on here. Xitter is over for me.)
https://www.ft.com/content/e5c741a7-befa-4d49-a819-f1b0510a9802