There has been a lot of noise around whether or not a university degree is a worthwhile investment. This has been largely done by looking at the annual price tag versus likely earnings premium of the individual (of course remembering that if you do not benefit financially, this will be reflected in how much you pay back). While this is an important debate, it is only a very small part of the picture. On a national scale, determining whether investing in universities – and in particular investing in increasing the total number of graduates – is worthwhile demands a wider view and arguably the stakes are much higher.
It is popularly agreed that ‘there are too many graduates’ in the UK. It is important to look at the evidence behind this claim as getting this right has big implications for the direction government policy should take as well as for individuals and the wider society. Seeking to increase the proportion of the UK workforce with degrees would be a waste of public (and, increasingly, private) funds if there really are ‘too many graduates’. Equally, moves to increase other forms of education and training or encouraging moves straight into the workforce at the expense of higher education could be detrimental to individuals, the economy and society if we do in fact need more graduates than we currently have.
However, the UK economy is not presenting any of the labour market signals that would suggest there are too many graduates in the economy. Graduate vacancies continue to grow. Jobs in ‘graduate dense’ occupations are an increasing proportion of the total workforce. Graduate employment rates have been maintained despite the rapid expansion in the number of graduates. Added to all this there is still a significant graduate premium. Contrary to popular belief, the evidence suggests that there is a shortage of graduates in the UK not too many.
This is interesting and worth reflecting on. However, the question that decision makers need to be asking is ‘what next?’ What is the bigger picture? Investing in universities isn’t primarily about short term gain (although there is some of that). It is about investing in the longer term future of individuals, the economy and society. Forecasts show that most growth in the labour market over the next decade will be in jobs typically performed by graduates. Advances in technology are changing the way we work and the type of work we do. Routine tasks within occupations are being automated or outsourced. Highly innovative businesses account for a disproportionate amount of overall business growth. And it is typically graduates who have the attributes and qualities to adapt and perform best in this emerging innovation landscape.
If you see higher education as a luxury good it would make perfect sense to limit or reduce the number of student places – an exclusive experience for the lucky, wealthy or very deserving few. But higher education is not a luxury good. It is a public good. The future labour market will need increasing numbers of graduates. As workers are displaced from routine occupations we can either open up routes into higher education to facilitate upwards mobility or we can risk seeing increased competition at the low end of the labour market, contributing to increased unemployment and difficulty in finding entry level jobs.
Demand is high. Applying market logic would see the total number of student places increased. Instead they have been quietly cut by around 24,000 places compared with last year. Budgets may be limited but we should be stating the case for increasing the budget for higher education in future years. Until then we need to think creatively about how to increase the total number of well-funded, high quality student places to meet current and future need for more graduates in the UK – answers on a postcard to 1 Victoria Street.
