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Graduates face 17-year high in unemployment

By Richard Garner

Unemployment among Britain's graduates is at its highest level for 17 years, according to figures released today.

They show that more than one in 12 (just over 21,000 or 8.9 per cent) of those who left university in the summer of 2009 were still unemployed six months later. In addition, more than one in three of those who found work – 48,000 – are in stopgap rather than graduate jobs.





In all, 70,000 of the 224,495 graduates surveyed were either on the dole, or pulling pints or waiting tables.



The figures emerged as ministers are on the verge of announcing they will raise the £3,290-a-year cap on student tuition fees to as much as £9,000 a year. An announcement is likely within the next fortnight.

Worryingly, the rise in unemployment among graduates in the past two years has been cushioned only because recruitment to public-sector jobs remained steady. But with 490,000 jobs expected to disappear in the sector following the Comprehensive Spending Review, this safety blanket is likely to start fraying.



The new figures show more young people are also opting to stay in full-time education after graduating rather than looking for a job. This accounts for a further 15.4 per cent of graduates – up 1.3 percentage points from the previous year.



Today's figures, from the Higher Education Careers Service Unit, show that graduate unemployment has risen by one percentage point to 8.9 per cent this year – leaving the class of 2009 the worst off since 1993 in the search for jobs.



Aaron Porter, the president of the National Union of Students, said: "These latest figures show that students are graduating from university into the bleakest employment market for decades.



"This is yet further proof that the radical proposals in Lord Browne's review [of student finance] to remove government funding for the majority of subjects and simply transfer this cost to students is unfair and illogical."



The figures coincide with one of the country's biggest graduate recruiters reporting that applications to its graduate training programme for next year have doubled. Ernst and Young, the professional services firm, says 4,500 graduates are chasing 700 places.



Stephen Isherwood, head of graduate recruitment at the firm, said: "Over the last two months we've seen interest in our graduate recruitment programmes rocket."



However, today's unemployment figures are still markedly lower than they were in the wake of the recession of the early 1990s, when the figure reached 11.6 per cent



Graduate employment experts point out that the rise appears to be peaking. Unemployment the previous year rose by 2.4 percentage points to 7.9 per cent. However, they acknowledge that the unknown factor is the impact of public spending cuts.



Charlie Bell, the deputy research director at HECSU, said: "Prospects for graduates in the short term look brighter, with unemployment likely to have peaked, and next year we expect to see a decline. However, with the public-sector job cuts, the future in the medium-term looks less clear."



However, Sally Hunt, general secretary of the University and College Union, warned: "We fear it is perhaps a little optimistic to assume that graduate unemployment has peaked.



"We believe there are all sorts of benefits from a university education. However, the Government cannot make a case for increased contributions from graduates, students or their parents based on specious graduate pay premiums."



Ministers have said the average graduate earns £100,000 more over their career than those who have not been to university. However, bleak employment prospects threaten to torpedo their argument that, because of this, students would be prepared to pay higher tuition fees.



Ministers are now said to be ready to announce raising the cap to £8,000 or £9,000 a year. An earlier plan to limit the rise to £7,000 is being rejected because universities say that would barely cover the cuts in the teaching budget announced in the Comprehensive Spending Review.



The Universities minister David Willetts favours a two-tier approach to tuition fees – fixing a minimum fee of around £6,000 a year and a maximum approaching £9,000. However, those charging the higher fee may have to face a public benefit test similar to that imposed on charities – and show they were still attracting students from disadvantaged backgrounds.



A final decision on fees has yet to be made. Ministers will, though, put a package before Parliament for approval by Christmas. Mr Willetts has already said they have rejected Lord Browne's most radical option – that of lifting the £3,290 a year cap on fees altogether and letting universities charge what they like.



Today's graduate employment figures show the biggest drop in recruitment was among IT graduates, with 16.3 per cent unemployed. In addition, media studies graduates' unemployment rate increased by 2.6 percentage points to 14.6 per cent.



The biggest boost to recruitment was in retail services – up 3.8 percentage points to 14.4 per cent of the graduate employment market.



Also on the rise were recruitment to social and healthcare jobs – up 0.5 percentage points to 5.2 per cent and 0.2 points to 14.8 per cent respectively. However, they are both public-sector jobs. Graduates salaries, though, have continued to rise – albeit modestly.



This year's graduates can expect a salary of £19,695 on average – £18 more than those in the previous year.





Source: Independent

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