Young Graduates Need a Postgraduate Qualification to Get Ahead in Earnings

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New income data released by the UK government has suggested that young graduates in England need a postgraduate degree if they want to earn significantly more.

The UK Department of Education recently published the graduate earning figures for 2018. The data shows that, for students aged between 21 and 30, the average salary is £30,000 for postgraduates, £25,500 for graduates, and £21,000 for non-graduates.

According to the data, up to the age of 30, postgraduates earn on average 40%, or £9000, more than non-graduates. In contrast, graduates earn on average 21%, or £4500, more than non-graduates.

A similar gap exists when one looks at the entire working population.  For workers between the ages of 16 and 64, on average, postgraduates make £40,000, graduates make £34,000, and non-graduates make £24,000.  This means that, on average, postgraduates earn 67%, or £16,000, more than non-graduates, while graduates earn 42%, or £10,000, more than non-graduates. 

The latest data shows that the pay advantage for young graduates in England is narrowing, with the pay gap between graduates and non-graduates decreasing from £6000 in 2008 to £4,500 in 2018. It also shows that a lower number of young graduates are working in “high skilled” jobs in 2018 than in previous years.

These figures demonstrate a whole decade of wage stagnation and decline in real terms. Young graduates were earning £24,000 in 2008 and, if wages had kept up with inflation, they should have been earning £31,500 in 2018, rather than £25,500. In real-terms, this means a major drop in earnings.

The average salaries of young graduates also vary greatly depending on ethnicity, gender, and region. Up to the age of 30, male graduates earn an average of 

£3,500 more than female graduates, white graduates earn an average of £4,000 more than black graduates, and graduates in London earn an average of £9,000 more than graduates in the North-East.  

With regards to the gender pay gap, it’s worth mentioning that, according to the data, the average annual salary of female postgraduates in 2018 was £37,000, while the average annual salary of male graduates in the same year was £38,500, or £1,500 more than female postgraduates.

This new income data comes as the UK government undertakes a review of undergraduate fees in England to determine whether they represent enough value for money. The current undergraduate fee in England is £9,250 per year.

UK Universities Minister Chris Skidmore, while welcoming the “graduate premium” in salaries, admitted that “there is clearly much further to go to improve the race and gender pay gap.”

With regards to what is being done to solve the problem, Skidmore stated that the UK government has “introduced a range of reforms in higher education which have a relentless focus on levelling the playing field, so that everyone with the talent and potential can not only go to university, but flourishes there and has the best possible chance of a successful career.”

Image: [The Times]