A fifth of graduate workers earn less than school-leavers

One in five graduates earn less than the average worker educated to A-level standard, new figures show.

August 24, 2011

Data released today by the Office for National Statistics show that the worst paid 20 per cent of graduates had lower earnings in October to December last year than those who left school with qualifications at 18.

Fifteen per cent of graduates also earned less than those who left school at 16 with only GCSEs or equivalent qualifications.

However, overall employees educated to degree level earned 85 per cent more on average than those educated to GCSE level – although this has fallen from a high of 95 per cent in 1993.

During this period the percentage of people in the UK with a degree has more than doubled from 12 per cent in 1993 to 25 per cent in 2010.

This has resulted in a decline in the percentage of graduate workers holding the highest skilled jobs, such as managerial positions, engineering and accountancy jobs.

In 1993, 68 per cent of workers with a degree were employed in a job in the highest skill group, falling to 57 per cent in 2010.

Analysis shows the median hourly pay for employees educated up to around GCSE or equivalent level was £8.68, for those at A-level or equivalent £10, up to higher education but below degree level £12.60, and for those with a degree £16.10.

Those with no qualifications earned £6.93 on average and with other qualifications the median stood at £8.07

The Labour Force Survey also shows that those with a higher education qualification, but not a degree, earned around 45 per cent more than those with only GCSE level qualifications. Those educated to A-level or the equivalent earned around 15 per cent more than those leaving school at 16, down from 18 per cent in 1993.

There was also a fall in the percentage of working people with no formal educational qualifications, from 25 per cent in 1993 to 11 per cent in 2010.

This was mainly driven by people aged 50-64 in 1993 who, because of the education system in the 1960s and 70s, were less likely to have stayed on in school.

By 2010 these people were over the age of 64 and therefore likely to have retired.

Nicola Dandridge, chief executive of Universities UK, said: “Looking at all graduates, degree holders continue to earn considerably more than non-graduates over a working lifetime, and are also more likely to be in employment.

“Despite the exponential growth in the number people gaining a degree since 1993, there still remains a considerable pay premium for graduates.”


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