This HEPI blog was kindly authored by Paul Wiltshire, parent campaigner against mass higher education.
One of the main policies of the Blair government was to increase participation in higher education to 50%. No doubt one aim was to increase access to the higher salaries generally enjoyed by graduates; yet 25 years later, with the 50% target reached, there is growing evidence to suggest that this aim has failed.
Research shows that, when you compare the National Minimum Wage (NMW), another of the Blair Government’s policies, to the average graduate starting salary, the two have gradually converged. In 2001, the NMW was the equivalent to an annual salary of £7.2k and the average graduate starting salary is estimated to have stood at 115% higher, at £15.5k. But by 2023, the graduate starting salary of £25.9k was only 30% higher than the National Minimum Wage of £19.9k.
The commercially led jobs market tends to be brutally honest about the genuine value of candidates, and I suggest this evidence demonstrates its verdict: the more graduates that the higher education system produces, the less in relative terms to the National Minimum Wage they are going to get paid. The modest and eroded premium of 30% above the National Minimum Wage is hardly the outcome that the Blair Government anticipated and I believe this shift to mass higher education must now be viewed as a policy failure – particularly now that students emerge with a life-changing level of personal debt.
Furthermore, there is growing anecdotal evidence highlighted in recent media stories that, in the attempt to make more of our young adults winners, the reality is that mass higher education is piling up more and more losers who emerge into a jobs market saturated with graduates with limited chance of converting their degree into to a job that justifies the three years of study and the huge debt. Examples include:
- Students are racking up huge debts, but how can they tell if it’s value for money? – Guardian 11th Feb 24
- ‘I’d be better off if I hadn’t been to uni’: UK graduates tell of lives burdened by student loans – Guardian 4th Aug 24
- ‘Like throwing myself at a wall’: UK graduates struggle in ‘insane’ job market – Guardian 29th Aug 24
The student finance system is undoubtedly broken, yet the problems in the graduate jobs market don’t appear to be being considered. Far from it, as Universities UK has recently stated that the solution lies in increasing fees and increasing participation to an astonishing 70% by 2040. Their justification is that you tend to earn more if you go to higher education but never has the adage that ‘There are Lies, Damn Lies and Statistics’ ever been so apt.
While it is true that those attending university do go on to earn more, it is statistically incorrect to claim that this is all due to the causation of having studied for a degree, particularly when you consider that many graduates end up in jobs where their degree subject is not directly relevant. (The Institute of Student Employers’ 2023 Student Recruitment Survey found only 19 per cent of adverts for graduate jobs stipulate a specific degree.)
It can instead be reasonably argued that the jobs market pay premium is merely rewarding the correlation that exists for most graduates who tend to be more academically able and hard-working. Trying to claim that all the success of higher career earnings is down to the ‘essential’ element of spending three years at university before entering the workforce is bogus. We might as well say that there is good evidence that, if you are above average academically and you work hard, then in your 20s and 30s you will be earning more than if you weren’t.
Ironically though there is another causation effect at play in that the jobs market is increasingly prejudiced against non-graduates for even the most junior clerical and managerial roles, so it is forcing 18-year-olds to enter higher education and get themselves into significant debt to give themselves a chance at the most basic of entry-level roles when they attempt to enter the workforce aged 21. It has been legitimately argued that the practice of discriminating against non-graduates in this manner is damaging to society and should be banned.
Many higher education advocates will claim that we shouldn’t fixate on graduate starting salaries but should rather consider the likely increased earnings say five years after graduates have entered the workforce. This doesn’t of course explain why the graduate premium has reduced from 115% to 30%. And it falls into the same trap of illegitimately claiming that all the uplift in salary once a graduate embarks on their career is causation rather than correlation. Surely if an individual’s salary increases over time, this is due to their innate ability, work ethic, on-the-job training opportunities and general development of their abilities through actual work experience? So the increased pay after five years may not be a ‘graduate’ premium at all, more an ‘entering the workforce’ premium.
The Labour Government has to do something to relieve the pressure on university and student finances. But we shouldn’t be throwing ever more students into higher education and a life of debt with high marginal tax rates, making them disillusioned by false promises and unrealistic expectations before they have even set out in life. Instead, we need to cap student participation numbers drastically, ban the proliferation of discriminatory graduate-only job adverts, encourage employers to start recruiting 18-year-olds again and train and educate them in the workplace – and we need to ensure those 18-year-olds are not coerced by society into thinking that entering the workforce is some kind of dud option and a failure.
So basically you only view graduates as economic inputs into an economy – market instrumentalism personified! No acknowledgement of supporting student self formation and engaging with disciplinary knowledge so they can engage with, and seek to transform, the world.
What entry cap percentage do you suggest?
I would like to think that part of Mr Wiltshire’s campaign for lower participation in HE involves ways of thinking about how we can, as Robbins famously said, find ways of getting those who will benefit from HE into it.
There are some things to like here. The points on graduate debt, and a broader perspective on what counts as educational success are well made.
The reduction of the matter to starting graduate salary is depressing, though. There is more to this than what graduates earn and pay back into the state’s coffers – statistically better health outcomes, for instance.
In this and in Mr Wiltshire’s other writing there is a conflation between earning a degree and participation in HE. This is understandable given the sector’s obsession with completion rates and other measurables, but something I would like to see disaggregated as one way of thinking about participation rates in more flexible ways.
University education was originally meant to be elitist for a very good reason. I went to university 50 years ago, when they were so selective. They promised not the alure of riches but an opportunity for growth that could not be measured in money terms. Anyone going to university lost 3 years of contributions to their pensions and salaries that were behind their classmates who did not go to university. Universities today promise riches to students who would not have gained admission 50 years. It would be better economics to fix schools to deliver technical excellence. Universities today are running ponzi schemes.
This argument ignores education’s transformation of work (Baker, 2009). Even notionally unskilled work is transformed by workers being literate, numerate, and able to put their work in a broader context. Baker extends the argument to the higher knowledge, skills and attributes developed by higher education.
‘Abstract
‘Formal education not only educates individuals, it reconstitutes the very foundations of society through a pervasive culture of education with a legitimate capacity to reconstruct work and its central components such as ideas about human productive abilities, new organisations and management, widespread professionalism and expertise, and the emerging educated workplace. The ubiquitous massive growth and spread of education has transformed the world into a schooled society, and in turn the schooled society has transformed work. The implications of the educational revolution and empirical findings from a range of recent research studies are applied to – the narrow version of human capital theory and education‐as‐myth sociological theory – two widely employed theories of education and work over the past 40 years. And a new theoretical synthesis that takes into account the empirical realities of the schooled society is proposed.’
Baker, D. P. (2009). The educational transformation of work: towards a new synthesis. Journal of Education and Work, 22(3), 163-191.
https://www.researchgate.net/publication/248975353_The_educational_transformation_of_work_Towards_a_new_synthesis
I do feel that there is something a bit off about someone who has styled themselves here as “a parent campaigner against mass higher education” having sent four of their children to university.
Presumably he does not consider his four children to be part of the masses whose education he is campaigning against?
My support goes to Paul Wiltshire in this debate. The graduate premium is fading fast. We need to be open and honest when quoting graduate salaries so as not to give prospective students untrue expectations. At the moment there is hardly ever an adjustment to reflect graduate debt.
The reality is that a gross salary of £40,000 a year comes down to around £35,000 after real time debt repayments for the month are taken off.
Excluding inflation, a 20 year income of £40k a year earns £800k but over the 40 years of repaying your student loan for fees and maintenance you might pay back around £100k.
When you are looking for a 30 year mortgage your lender will take into account your monthly student debt repayments and an apprentice on the same gross income is likely to get a better deal.
I think the sector should forecast a 50% reduction in the number of students applying to do a degree over the next 10 years, under current circumstances.
The value added by having a degree is a myth. To get into university in the first place you will generally have gone to better schools, have more affluent parents and achieved better qualifications to date than most of your age group. You are highly likely to continue to prosper with or without a degree.
Yes, going to University is likely to give you further advantages and new experiences and may well make you a healthier, happier “better person” and contribute more to society but the odds have changed and you need to consider this.
The young people who are going to suffer most are those that had the lowest points on their application forms, who chose business studies and related subjects delivered by franchised providers making huge profits.
Some in the sector should be ashamed.
Partially agree but if we were back to 100 years ago , could we use the same argument to argue secondary education and territory education isn’t worthy it?
Assuming they would need to pay it to get the secondary and territory education.
Since most of the Europe advanced economy do not charge tuition fee on their students why the UK must need to charge it? If secondary and territory education can be free why no universities?
If I am reading it right, apart from anecdotal evidence and media stories, the claim that mass higher education has failed stands on the comparison with minimum wage. The fact that we are looking at a 60% increase in average graduate pay in the 22 years doesn’t count. Also, this growth has been achieved with an expansion of number of graduates (because of mass higher education) doesn’t count too. Most importantly, that the minimum wage more than doubled and grew in real terms, a remarkable policy feat, is overlooked too. I don’t know what I am missing, but this seems to be a case where conclusions were drawn long before the arguments were arrayed.
To be playful, an argument, at least as valid as this one, could be made that the right comparison of average graduate salary should be made with the teenage national wage figures, because without public funded university, that is where most graduates have to start (though they would start younger) and we would hopefully recover the comfort of a significant graduate premium.
If anything, the data, contextualised, seems like a remarkable success of public higher education – it educated more people with more university places, on an average they earned more and the state made sure all boats are lifted through minimum wage.
I would love to be corrected, and have my faith in meaningful use of data restored. Until then, however, I wouldn’t see any alternative, in the face of rapid technological change, to rapidly expanding public higher education, doing the job which required additional years of schooling at public expense in the twentieth century.
Reply to Peter : Yes, all 4 of my children are currently at University or have recently left. But this fact informs my point; they had little or no choice other than to go to University or be treated by their teachers, the workplace and their peers as a failure. And now as they emerge from Uni, they have only actually managed to get themselves into the bloated pool of graduates fighting for junior trainee roles, yet they have a lifetime of debt to show for it.
Reply to Bernard,
I think that 15-20% participation would be sufficient to match the needs of the work place. I think that University is a very positive force for good , but we just need to keep the numbers down to avoid a large proportion going to Uni and ending up in jobs that really didn’t need them to have got themselves into £50-£100K debt
Reply to Gavin,
Yes University is a force for good. Yet it also leaves individuals £50-£100k in debt (and the taxpayer possibly picking up the write off in 30-40 years) , so for pragmatic reasons you can’t simply have unlimited access for all. It needs to be rationed to about 15-20% of the population who will really benefit.
Reply to Paul,
I didn’t mean to imply that graduate salary was the only measure of success of participation in HE. It just so happens though that measurement of pay is far easier than other success indicators. And I was responding to the head of UUK, Sally Mapstone who recently made it ‘all’ about increased earnings to justify calling for even higher 70% participation :
“Sally Mapstone, (head of UUK) the vice-chancellor of the University of St Andrews, said: “It undoubtedly is the case that if you learn more, you earn more, and you have to look at the benefit of university education across a lifetime. There is very good evidence that if you go to university in your 20s and in your 30s, you will be earning more than if you didn’t.”
Reply to Paul:
I wholly agree that going to Uni isn’t all about getting a higher paid career , but it is undoubtably a very important aspect considering the amount it costs the participant.
And Sally Mapstone, Head of UUK has clearly made career earnings a main driver with her recent quote below :-
“It undoubtedly is the case that if you learn more, you earn more, and you have to look at the benefit of university education across a lifetime.
There is very good evidence that if you go to university in your 20s and in your 30s, you will be earning more than if you didn’t”
Reply to Zijun :
I agree that if society decided to pay for unlimited free HE for all citizens through general taxation (like schooling up to age 18), then this would undermine my argument. But the general taxpayer doesn’t pay for it, the individual does, and to start life with at least £50k of debt as a necessity to have even a chance of being considered for a junior job is unfair. My solution is to make HE ‘free’ (or at least heavily subsided) again , but restrict it to only 15-20% of the population.
Reply to Supriyo:
I do agree that my argument hangs on a simple comparison between National Minimum Wage and Average Graduate starter salary. To be honest, it is difficult with the restriction of the 800-1000 word limit of a blog to deeply analyse all of the possible contributing factors . However, I do think that the mere fact alone that the NMW and the AGSS have converged in this manner is quite startling and should concern HE policy makers. Because at the moment UUK is attempting to persuade policy makers to increase participation to 70% and don’t seem at all concerned that this is highly likely to make the NTW and AGSS converge to a ridiculous 10% or 15% – i.e To make having a degree virtually worthless in the jobs market.
Reply to Paul:
Thank you for the response. The NMW and the AGSS are converging, but that doesn’t denote a fall in Graduate Salary that the headline implies. Rather, this is because the NMW has risen faster (and it seems it would continue its rise in this budget).
I believe that this is how it would be, at a time of rapid technology adoption in the workplace and a transformation of the economy, where work would increasingly demand complex capabilities. In an advanced economy, we would both need higher minimum wage and more educated workforce.
Whether universities are doing this job well is another debate, as is whether universities are geared up to serve a relatively older population, who would need to adapt to these changes.
Reply to Supriyo :
I agree that the fall in AGSS is relative (to NMW) rather than absolute and that this could have been made clearer in the headline. I agree that the NMW is rising quite remarkably at the moment and appears to be outstripping general wage inflation. But this doesn’t change the fact that it is remarkable and interesting that AGSS is not rising proportionately with NMW which is the thrust of the article. Surely it should be a concern to HE policy-makers if our young adults are being enticed by UUK in ever greater numbers to get themselves into debt are only going to be paid marginally more than completely unskilled and less academically able workers performing low value jobs.