The Times Australia
The Times World News

.

Graduates lose pay advantage in tougher times, but overall workforce entrants seem surprisingly satisfied

  • Written by Roger Wilkins, Professorial Fellow and Deputy Director (Research), HILDA Survey, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne
Graduates lose pay advantage in tougher times, but overall workforce entrants seem surprisingly satisfied

Around 400,000 people under the age of 25 leave full-time education and embark on their careers each year. The latest HILDA Survey Statistical Report[1], released today, shows how they have been faring since 2001. Full-time work has become harder, and the pay advantage university graduates enjoy has decreased. Yet, overall, new recruits to the workforce remain at least as happy with their jobs as they have been over the past two decades.

Over most of this century, and probably much of the 20th century, getting a foothold in the labour market and progressing up the career ladder has been a significant challenge for these young people.

Today, about 40% find full-time work in their first year out of full-time education. A further 35-40% get part-time work.

Their median hourly earnings are about two-thirds of median earnings of all workers. But, because many don’t have full-time jobs, their median weekly earnings are just over half those of the median worker.

Read more: Students' choice of university has no effect on new graduate pay, and a small impact later on. What they study matters more[2]

Five years after entering the workforce, about 85% are employed, two-thirds of them full-time. Earnings have also increased relative to the median worker five years after entry, but remain about 10% lower.

The educational attainment of young new entrants has increased considerably since 2001. The proportion with a university degree has increased from 15% in the early 2000s to 23% in recent years. The proportion who did not complete high school has halved from 24% to 12%.

Poorer rewards for better qualifications

Despite having better qualifications, young people’s employment outcomes and trajectories have not improved at all. Indeed, since the boom years before the global financial crisis (GFC), there has been a marked deterioration.

Full-time employment in the year of labour market entry has fallen from 50% to 41%. Unemployment has risen from 8.4% to 11.2%. Full-time employment rates in the following years have similarly fallen.

Read more: 1 in 4 unemployed Australians has a degree. How did we get to this point?[3]

The fall was most dramatic between the pre-GFC boom years (2004-2007) and the 2012-2015 period, and has been especially large for university graduates.

Those graduating in the pre-GFC boom years had a full-time employment rate of 68%. This fell to 53% for those graduating between 2012 and 2015.

In the boom years, graduates’ median earnings were 97% of overall median earnings in the year after graduation. By 2012-15, that proportion had fallen to only 82%.

There has since been a slight improvement. Some 56% of those who graduated between 2016 and 2018 were employed full-time in the year following graduation. However, outcomes for graduates were still considerably down on the early years of this century.

Vertical bar chart showing new graduates' rates of full-time employment and earnings compared to other workers, 2004-18
Chart: The Conversation. Data: HILDA Survey 2021, CC BY[4][5] Read more: Want to improve your chances of getting a full-time job? A double degree can do that[6] Perhaps most striking is the decline in the relative earnings of university graduates in the years after they join the workforce. Career trajectories are now considerably “flatter” for more recent graduates. For example, five years after entering the workforce, median earnings for those graduating in the first three years of this century were 23% greater than overall median earnings. By contrast, for graduates who entered the labour market in 2013 and 2014, median earnings five years later were still slightly below overall median earnings. More part-timers, paid less, but fairly satisfied In short, new entrants to the workforce are more likely to be part-time and paid less relative to the general population of workers. Curiously, however, they do not seem to be unhappy about their jobs. In some ways, quite the reverse is true. The HILDA Survey measures workers’ satisfaction with a variety of aspects of their jobs. These aspects include the job overall, pay, job security and flexibility to balance work and non-work commitments. Moreover, a battery of questions are administered each year that provide measures of “job quality”. These include the extent to which the job makes (excessive) demands of the worker, the level of autonomy the worker has, the interest and variety of the work, the security of employment and the fairness of the pay. On all of these measures of job satisfaction and job quality, young new entrants report their jobs being at least as good now as they did in the early years of this century. Line graph showing employed new entrants' ratings of job satisfaction against key criteria, 2001-19 Chart: The Conversation. Data: HILDA Survey 2021, CC BY[7][8] It is of course possible that job quality has on average improved. Aspects that come to mind include job security, flexibility to balance work and non-work commitments, job demands, autonomy and task variety. However, it remains somewhat perplexing that, on a 0-10 scale (0 represents complete dissatisfaction and 10 complete satisfaction), average satisfaction with pay has increased from 6.7 to 7.4 between early this century and recent years. Similarly, average agreement of workers with the statement that they are fairly paid has risen from 4.4 to 4.9 on a 1-7 scale (1 corresponds to strong disagreement and 7 to strong agreement). Objectively, pay has declined for new entrants relative to the broader workforce, particularly for university graduates. It therefore seems new entrants’ expectations have been recalibrated to reflect the harsher reality of the modern labour market. Still, it is hard to understand why subjective assessments of jobs have improved in the context of objective data to the contrary. Perhaps young new entrants have lowered their expectations too much. References^ HILDA Survey Statistical Report (melbourneinstitute.unimelb.edu.au)^ Students' choice of university has no effect on new graduate pay, and a small impact later on. What they study matters more (theconversation.com)^ 1 in 4 unemployed Australians has a degree. How did we get to this point? (theconversation.com)^ Chart: The Conversation. Data: HILDA Survey 2021 (melbourneinstitute.unimelb.edu.au)^ CC BY (creativecommons.org)^ Want to improve your chances of getting a full-time job? A double degree can do that (theconversation.com)^ Chart: The Conversation. Data: HILDA Survey 2021 (melbourneinstitute.unimelb.edu.au)^ CC BY (creativecommons.org)

Read more https://theconversation.com/graduates-lose-pay-advantage-in-tougher-times-but-overall-workforce-entrants-seem-surprisingly-satisfied-173152

Times Magazine

Building a Strong Online Presence with Katoomba Web Design

Katoomba web design is more than just creating a website that looks good—it’s about building an online presence that reflects your brand, engages your audience, and drives results. For local businesses in the Blue Mountains, a well-designed website a...

September Sunset Polo

International Polo Tour To Bridge Historic Sport, Life-Changing Philanthropy, and Breath-Taking Beauty On Saturday, September 6th, history will be made as the International Polo Tour (IPT), a sports leader headquartered here in South Florida...

5 Ways Microsoft Fabric Simplifies Your Data Analytics Workflow

In today's data-driven world, businesses are constantly seeking ways to streamline their data analytics processes. The sheer volume and complexity of data can be overwhelming, often leading to bottlenecks and inefficiencies. Enter the innovative da...

7 Questions to Ask Before You Sign IT Support Companies in Sydney

Choosing an IT partner can feel like buying an insurance policy you hope you never need. The right choice keeps your team productive, your data safe, and your budget predictable. The wrong choice shows up as slow tickets, surprise bills, and risky sh...

Choosing the Right Legal Aid Lawyer in Sutherland Shire: Key Considerations

Legal aid services play an essential role in ensuring access to justice for all. For people in the Sutherland Shire who may not have the financial means to pay for private legal assistance, legal aid ensures that everyone has access to representa...

Watercolor vs. Oil vs. Digital: Which Medium Fits Your Pet's Personality?

When it comes to immortalizing your pet’s unique personality in art, choosing the right medium is essential. Each artistic medium, whether watercolor, oil, or digital, has distinct qualities that can bring out the spirit of your furry friend in dif...

The Times Features

How much money do you need to be happy? Here’s what the research says

Over the next decade, Elon Musk could become the world’s first trillionaire[1]. The Tesla board recently proposed a US$1 trillion (A$1.5 trillion) compensation plan, if Musk ca...

NSW has a new fashion sector strategy – but a sustainable industry needs a federally legislated response

The New South Wales government recently announced the launch of the NSW Fashion Sector Strategy, 2025–28[1]. The strategy, developed in partnership with the Australian Fashion ...

From Garden to Gift: Why Roses Make the Perfect Present

Think back to the last time you gave or received flowers. Chances are, roses were part of the bunch, or maybe they were the whole bunch.   Roses tend to leave an impression. Even ...

Do I have insomnia? 5 reasons why you might not

Even a single night of sleep trouble can feel distressing and lonely. You toss and turn, stare at the ceiling, and wonder how you’ll cope tomorrow. No wonder many people star...

Wedding Photography Trends You Need to Know (Before You Regret Your Album)

Your wedding album should be a timeless keepsake, not something you cringe at years later. Trends may come and go, but choosing the right wedding photography approach ensures your ...

Can you say no to your doctor using an AI scribe?

Doctors’ offices were once private. But increasingly, artificial intelligence (AI) scribes (also known as digital scribes) are listening in. These tools can record and trans...