Increase of graduates pushes salaries down

October 27, 1994

New graduates from Australia's universities are being forced to accept jobs in fields which were previously the domain of school-leavers, according to the Graduate Careers Council of Australia.

As a result of this and changes in the Australian economy, starting salaries for graduates have fallen to their lowest level in nearly 20 years when compared with average earnings.

A survey of more than 75,000 graduates by the council has found that the median income of those who manage to find a full-time job is now $25,500 (Pounds 11,590) a year -- or 80 per cent of average earnings.

Female graduates, however, earn only about 92 per cent of the income of their male counterparts because they tend to enrol in middle to lower-ranked disciplines (at least in terms of starting salaries).

A report of the survey by Bruce Guthrie, a GCCA analyst, notes that graduate salaries have been steadily falling against Australian average incomes since 1988.

Not since the mid-1970s have new degree-holders enjoyed parity with average earnings, Mr Guthrie says.

Apart from a brief boost in wages six years ago, graduates have suffered a steady decline. Even in the past 12 months, when the whole workforce experienced a slight increase in earnings, those for new graduates were the same.

Mr Guthrie says the main factors in the trend pushing graduate salaries down compared with average income is the increasing number of graduates and Australia's slow recovery from its deep recession.

Graduates with "generalist" degrees have been particularly affected and their starting salary levels clearly reveal the effects, Mr Guthrie says.

In order to get a full-time job, many have been forced to accept work in fields where previously school-leavers were employed, and at lower salary levels.

The only possibility for a reversal in the decline of starting salaries would seem to lie in a turn around in the employment prospects of new degree-holders, generalist graduates especially, Mr Guthrie says.

But Roger Bartley, executive director of the graduate careers council, argues that longer-term prospects for graduates are "very positive", with evidence pointing to strong salary growth.

A 1992 study showed that graduates enjoyed a 100 per cent rise in income over the five years from 1985 to 1990, while average earnings rose by only 40 per cent in the same period.

Mr Bartley said: "In the longer term, graduates will enjoy lower unemployment rates and higher salaries than non-graduates do."

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