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http://www.bbc.co.uk/news/education-26992728

Graduate starting salaries 'drop 11% over five years'

Starting salaries for graduate jobs have fallen overall over the past five years, according to new analysis.

Research for the Complete University Guide says graduate starting salaries in professional posts dropped 11%, to £21,702 in real terms, in 2007-12.

The research, based on official statistics, shows that this decline is continuing and perhaps increasing.

Graduate starting salaries fell 4% in real terms in 2005-10, according to the guide.

Even medicine and dentistry - which had the highest starting salaries in 2007 - experienced reductions of 15% and 9% respectively.

Just as important for graduates as the starting salary is the graduate premium - the difference between starting salaries in graduate-level and other employment.

'Financial returns'

Building showed the greatest increase in the gap between graduates entering professional-type jobs and those in non-graduate employment.

A building graduate taking up a graduate-level job in 2007 would have had a £4,045 advantage over a fellow student entering non-graduate work, when adjusted for inflation. By 2012, the differential had increased to £7,174, a rise of 77%.

The average for all subjects, where there were sufficient numbers to be analysed, remained level between 2007 and 2012. But the differential, after adjustment for inflation, actually fell marginally from £6,732 to £6,717.

Only two subject areas - materials technology, and librarianship and information management - showed an increase in starting salaries, of 13% and 3% respectively.

In all other subject areas where there was sufficient data for analysis, starting salaries fell by 2% for general engineering, and by as much as 25% for Middle Eastern and African studies.

'Earning potential'

Dr Bernard Kingston, TheCompleteUniversityGuide.co.uk principal author, said: "These figures show a continuing decline in the graduate premium across many subjects, and must be a concern to students when choosing what to study at university when tuition fees of up to £9,000 a year in England and Wales.

"It is helpful for young people considering which subject to choose to see how their earning potential for the occupations for which they may qualify changes over a short time.

"While financial returns should not be the only consideration, they are becoming more important, whether we like it or not. However, with a volatile labour market, it is difficult to predict the future for any particular subject."

A Department for Business, Innovation and Skills spokesman said: "A degree is still one of the best routes to a good job and a rewarding career. Typically those with a degree earn considerably more over their lifetime, an estimated £165,000 for men and £250,000 for women.

"The increased number of graduates has been met by increased demand from employers which is why last year the chancellor made an historic commitment to remove the cap on the number of people who could go to university by 2015-16."

Last week research suggested today's students would still be repaying their student debts when they reach their 50s.

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Wonder why?

http://www.theguardian.com/money/2014/jan/13/uk-graduate-job-market-strongest-2014

'Some of Britain's biggest employers including Google, British Airways, John Lewis, the police and the civil service are planning to hire a total of 18,264 graduates this year, an increase of 8.7% compared with 2012.

Around 350,000 students are expected to graduate in 2014.'

Lambs to the slaughter.

Add on roughly 40,000 SME jobs and what have you got?Financial suicide for 290,000 kids.

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Sad graduate salary £21k when you can earn £18k for working in a call centre without the 40k debt.

Also sad that £21k nominal could easily have been a graduate salary 10-15 years ago.

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Graduate pay, pay, savings, pensions what hasn't fallen in real terms? It's not a very exclusive club.

I work for a FTSE100 company, reasonably heavy recruiter of graduates. I'm ashamed to say a new graduate starting with us will earn about 10% less than I did almost 6 years ago.

Supply and demand innit?

Edited by frozen_out

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I work for a FTSE100 company, reasonably heavy recruiter of graduates. I'm ashamed to say a new graduate starting with us will earn about 10% less than I did almost 6 years ago.

Supply and demand innit?

Pah! That's nothing. I work for a FTSE100 company and we pay our graduates between £100 and £250 a week as interns. We've got a steady stream of Oxbridge undergrads prepared to work for free on work experience. The result? Loads of useless kids of senior colleagues and clients wasting everyone's time so they can fabricate some kind of experience for their CV - and a small number of talented, hard-working self-starters who quickly realise that being shamelessly exploited is a necessary evil to get their career started. I've seen these guys offered full starting salaries of about £16k (in London!) which is about the same as I earned back in 1996.

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Also sad that £21k nominal could easily have been a graduate salary 10-15 years ago.

lol it was that was my graduate starting at the time 1999 lol, for GSK.

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Pah! That's nothing. I work for a FTSE100 company and we pay our graduates between £100 and £250 a week as interns. We've got a steady stream of Oxbridge undergrads prepared to work for free on work experience. The result? Loads of useless kids of senior colleagues and clients wasting everyone's time so they can fabricate some kind of experience for their CV - and a small number of talented, hard-working self-starters who quickly realise that being shamelessly exploited is a necessary evil to get their career started. I've seen these guys offered full starting salaries of about £16k (in London!) which is about the same as I earned back in 1996.

I would not accept 16K nor would I 20K these days if I were a grad.

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Note: the £21k in the article is the average starting salary of all graduates, not the average salary offered by graduate level jobs. As such, it is likely to be heavily skewed down by the fact the majority of students are doing humanities/arts/etc degrees at low tier universities and will not get 'graduate level jobs'.

A better indication of the salaries associated with graduates from 'decent' degree is the High Fliers index, which is the average graduate starting salary offered by the top 100 graduate employers (i.e. the milkround scheme,s which are the typical destination of Russell Group graduates). The most recent report can be found here: http://www.highfliers.co.uk/download/GMReport14.pdf

For reference, the current median starting salary (on page 19) is £29k, and this is unchanged since 2010. So that does seem like quite a large drop in real terms, since its now been 4 years with no nominal change.

Edited by Smyth

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Pah! That's nothing. I work for a FTSE100 company and we pay our graduates between £100 and £250 a week as interns. We've got a steady stream of Oxbridge undergrads prepared to work for free on work experience. The result? Loads of useless kids of senior colleagues and clients wasting everyone's time so they can fabricate some kind of experience for their CV - and a small number of talented, hard-working self-starters who quickly realise that being shamelessly exploited is a necessary evil to get their career started. I've seen these guys offered full starting salaries of about £16k (in London!) which is about the same as I earned back in 1996.

It really depends on the industry -- for example, typical summer internship (done by students still at university in the year before they graduate) salaries in the London financial services are in the £25-45k pro rata range, which breaks down as roughly £25-30k for accounting, £40-45k for banking, and consulting somewhere in the middle. Whereas you would be lucky to get anything at all if you are doing an internship in media, even if you had graduated.

I think the main difference is whether internships are offered purely for students to boost their CV (in which case they are treated as cheap labour and wont be paid much/anything), or whether companies are using summer internships to recruit full time staff. In investment banking for example, most banks have a strong preference for hiring the graduates from their own summer internship program, so these internships are basically used as extended job interviews (if you are good during the internship, you will almost certainly be offered a permanent job at the end, and getting a permanent job without having done a summer internship is very difficult). As such, since the companies are competing with each other for the 'best' interns in the same way they would compete for the 'best' full-time staff, internship salaries get driven up to essentially the same level as permanent staff starting salaries.

I find it hard to believe that companies offering £250 a week are attracting students with highly employable degrees, unless its a 'lifestyle' job like media/science/charity/etc where people are willing to take a heavy salary cut to do something they enjoy.

Edited by Smyth

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I see nothing wrong with internships at low rates, it is an excellent way for good people to get in to organisations. The HR red tape now makes companies reluctant to hire speculatively, internships can remove a big barrier.

If graduate salaries are averaging 21K that's dreadful, I got that on leaving Uni and 70K house that year are 450K now - and we were leaving with 5K student loans not 40K (and insurance, petrol, electricity, public transport was a fraction of cost it is now).

If this isn't the definition of intergenerational theft I don't know what is.

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It really depends on the industry -- for example, typical summer internship (done by students still at university in the year before they graduate) salaries in the London financial services are in the £25-45k pro rata range, which breaks down as roughly £25-30k for accounting, £40-45k for banking, and consulting somewhere in the middle. Whereas you would be lucky to get anything at all if you are doing an internship in media, even if you had graduated.

I think the main difference is whether internships are offered purely for students to boost their CV (in which case they are treated as cheap labour and wont be paid much/anything), or whether companies are using summer internships to recruit full time staff. In investment banking for example, most banks have a strong preference for hiring the graduates from their own summer internship program, so these internships are basically used as extended job interviews (if you are good during the internship, you will almost certainly be offered a permanent job at the end, and getting a permanent job without having done a summer internship is very difficult). As such, since the companies are competing with each other for the 'best' interns in the same way they would compete for the 'best' full-time staff, internship salaries get driven up to essentially the same level as permanent staff starting salaries.

I find it hard to believe that companies offering £250 a week are attracting students with highly employable degrees, unless its a 'lifestyle' job like media/science/charity/etc where people are willing to take a heavy salary cut to do something they enjoy.

Here he speaketh.

Science is now 'lifestyle'.

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Here he speaketh.

Science is now 'lifestyle'.

In the sense that its something people choose to do because they are passionate about the work/lifestyle even if the salary isnt great, yes.

Those sort of jobs pay less than internships in (eg) finance since they are offering other things beside "lots of money":.

Edited by Smyth

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The figures may not tell the whole story. If you've got a lot more graduates, and no easy way to differentiate between them then increasingly employers are adopting the hire cheap, and get rid off/promote accordingly.

Similar thing happened in my first proper job. About a dozen of us was taken on. My salary (and a few others) nearly doubled in 3 years, others got no increase at all (and eventually got the message and left).

Graduate science jobs have paid extremely poorly for at least the last couple of decades. Reading the NewScientist is like stepping back in time - I swear the salaries have hardly moved since the mid-90s. Yet, employers are always complaining about the lack of science graduates. Strange that.

Edited by StainlessSteelCat

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If a graduate has anything about them, the pay rises will come thick and fast soon after starting. If not at the original company, then certainly following a move elsewhere. This is my experience of watching graduates come through the ranks at our place (FTSE construction company).

Having said that, we have had one or two over the last few years who weren't even worth half that amount.

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Graduate science jobs have paid extremely poorly for at least the last couple of decades. Reading the NewScientist is like stepping back in time - I swear the salaries have hardly moved since the mid-90s. Yet, employers are always complaining about the lack of science graduates. Strange that.

Yeah this is one of the dumber things about the graduate market; there is a huge oversupply of science graduates at all levels, from undergrad to PhD. Far more graduate each year than there are science jobs, and the job market is notoriously awful. As a result, many science grads end up moving into other fields due to a combination of the low pay in science and the lack of jobs, but still we have to listen to employers/government bleating about our underproduction of good science grads, as if most students with physics degrees from Oxford are going to choose to work in a lab for £22k/year rather than just moving into finance or tech.

Engineering pays pretty well though.

Edited by Smyth

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The figures may not tell the whole story. If you've got a lot more graduates, and no easy way to differentiate between them then increasingly employers are adopting the hire cheap, and get rid off/promote accordingly.

Similar thing happened in my first proper job. About a dozen of us was taken on. My salary (and a few others) nearly doubled in 3 years, others got no increase at all (and eventually got the message and left).

Graduate science jobs have paid extremely poorly for at least the last couple of decades. Reading the NewScientist is like stepping back in time - I swear the salaries have hardly moved since the mid-90s. Yet, employers are always complaining about the lack of science graduates. Strange that.

Yes, I saw a copy a while back that was advertising a real professorship - the kind of post that you'd have spent the previous 25 years working 14 hour days, amassing a huge publication record whilst supervising others, bringing in research grants and basically being an extremely serious and committed, workholic professional. In London. The salary range was set at £55-70k.

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Yeah this is one of the dumber things about the graduate market; there is a huge oversupply of science graduates at all levels, from undergrad to PhD. Far more graduate each year than there are science jobs, and the job market is notoriously awful. As a result, many science grads end up moving into other fields due to a combination of the low pay in science and the lack of jobs, but still we have to listen to employers/government bleating about our underproduction of good science grads, as if most students with physics degrees from Oxford are going to choose to work in a lab for £22k/year rather than just moving into finance or tech.

Engineering pays pretty well though.

That's how markets work. She should welcome over supply of science grads driving down their pay.

If they're surplus to demand they can always work in Starbucks but I doubt many have the requisite skill set.

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Yes, I saw a copy a while back that was advertising a real professorship - the kind of post that you'd have spent the previous 25 years working 14 hour days, amassing a huge publication record whilst supervising others, bringing in research grants and basically being an extremely serious and committed, workholic professional. In London. The salary range was set at £55-70k.

Academic salaries are very low in the UK compared to (eg) the US or Australia, but that salary range is just be a guideline and most professors will get either the top of it, or higher. Professor pay is negotiated off the nationwide academic salary scales so there are no limitations on what universities can pay, and if you are in a strong position to negotiate a higher salary (due to research income/etc) then its often possible.

You can see the actual average professorial pay here, broken down by institution: http://www.timeshighereducation.co.uk/download?ac=8050 .Looking at the best London universities, the average salaries for full professors seems to be £73k (Kings), £77k (UCL), and £87k (imperial). So definitely higher than the quoted range, and you have to factor in pension, which is worth around 10-20% on top of that. Those salaries are still very low compared to what these people could earn in the private sector or US academia (since as you say to get a professorship you have to be very established in your field) but its not like theyre living on baked beans. The problem is more that £70k isnt enough to live in London if you have a family these days, not academic salaries as such - if you are outside the south-east then £70k will get you a very comfortable life. But as you can see from that link, London universities dont tend to offer much/anything more than non-London universities.

Also, there are opportunities for academics to top up their salary with private consulting, which can add on an extra £500-1000/day depending on field, probably even more at the professor level. Doing 20-30 days consulting a year isnt uncommon, although some fields obviously have a lot more opportunities for this than others.

Edited by Smyth

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Supply and demand innit?

Seems obvious- yet the advocates of the 'knowledge economy' seemed to overlook this basic principle imagining a world in which swarms of 'symbolic analysts' sat around their PC's sipping Latte in blissful isolation from the basic principle that the more graduates you produce, the less scarcity value each will have.

Also in a digital world what is more portable and offshore'able than information and knowledge?

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Yeah this is one of the dumber things about the graduate market; there is a huge oversupply of science graduates at all levels, from undergrad to PhD. Far more graduate each year than there are science jobs, and the job market is notoriously awful. As a result, many science grads end up moving into other fields due to a combination of the low pay in science and the lack of jobs, but still we have to listen to employers/government bleating about our underproduction of good science grads, as if most students with physics degrees from Oxford are going to choose to work in a lab for £22k/year rather than just moving into finance or tech.

Engineering pays pretty well though.

Not here it doesn't and this after 4 years intensive study and requires a fair bit of responsibility.

http://m.icerecruit.com/touch/?hq_e=el&hq_m=3148437&hq_l=14&hq_v=fc6e35a9f1#/job/130404/professional-civil-engineering-graduate/

Seeing lots of sub 20k grad jobs advertised in civil engineering lately. Experienced engineers are in short supply though.

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Guess it depends on the field; the people I know who did chemical engineering at uni are all making £££ in oil now. Aeronautical and Electrical engineering also pay well afaik. CompSci pays very well at the top end.

Surprised structural/civil engineers dont make much given that the cheapest I've been able to find someone to come over to my house and spend an hour drawing up a diagram for an RSJ beam is £600!

Edited by Smyth

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Yes well we aren't talking top end. The link above is for a Desmond in Lancashire. If you are a good talker with a 2.1 or 1st from red brick or Oxbridge, civils grad schemes might pay up to 28k if you are lucky. But after 5-6 years ought to be earning in low 40s. Not good for London but decent any where else.

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