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Tuesday 19 April 2016

What the great degree rip-off means for graduates: low pay and high debt

Aditya Chakrabortty in The Guardian


 
‘Ministers needed to sell universities to teenagers and their families – and in the process they have mis-sold them.’ Illustration: Bill Bragg



A few years back, I got my knuckles rapped by a government minister. In public. It was 2010: David Cameron had just come to power, and he was about to thrust university students into a new regime of higher tuition fees and debt.

Against that backdrop, I’d written a column criticising the way in which both Labour and Conservative governments marketed degrees as being some kind of social-mobility jetpack, zooming their wearers to more money and high-powered jobs. It was no such guarantee, I said, citing among other things Whitehall’s own plunging estimates of how much more graduates earn over a lifetime. Graduates, I said, would “probably end up doing similar work to their school-leaver parents – only with a debilitatingly large debt around their necks”.

For David Willetts, then universities minister, this was sheer and unpalatable sauce. In a speech to the annual conference of Universities UK, representing the top management of higher education, he named me – then tried to shame me. I was “wrong”, he claimed. Previous governments had indeed claimed that a graduate could expect to pull in £400,000 more over their lifetime than someone who hadn’t been to university. And, yes, his officials had knocked that estimate down to £100,000. But the difference, you see, was nothing to do with the increase in graduates – but “an improved methodology”. So I was “not comparing like with like”. Two Brains, one slap!

Willetts has since left parliament and gone to a far, far better place: the Resolution Foundation, an inequality thinktank that does much better work than the coalition government ever managed. But looking back, I shouldn’t have been surprised by either the reproof or the forum in which it was made. To sprinkle even a little doubt over the instrumental value of a degree is to take on both the well-paid managers of our universities, and Whitehall orthodoxy.

Higher education is “a phenomenal investment”, Conservative ministers tell us – even with tuition fees at nine grand a year. Repayments are only the equivalent of one “posh coffee” a day, according to the then universities minister Greg Clark (who is now communities secretary). “I think people recognise that that is a phenomenal investment,” he said. “It’s not just a good investment for the student, but actually it’s a good investment for the taxpayer.” I’ve seen ads on daytime TV for loans that do a softer sell than that.

And the marketing is still wrong. Take a look at research published last week by a team of economists from Cambridge, Harvard and the Institute for Fiscal Studies. They found that at 23 universities men typically earned less even 10 years after graduating than their counterparts who’d never been. The disparities are so yawningly wide that it makes a nonsense of talking about the “graduate premium”.

A student of economics at the LSE may walk into a City job and very soon be earning six figures. Their life and career will be utterly different from someone doing business studies, say, at a post-1992 university close to home in the north-east, and then chooses to work in the same area. Yet both are deluged with the official and industrial marketing that a mortar board and gown is worth an extra £100,000 over a lifetime.

Both New Labour and the dwindling band of Cameronian Conservatives have peddled the line that higher education breaks down class barriers. Again, untrue: last week’s research shows that students from the richest families did better than everyone else in the graduate job market – and earned far more than even those who’d done the same course at the same university at the same time.

Ministers needed to sell universities to teenagers and their families – and in the process they have mis-sold them.
In this new world of tuition fees and debt, children and their parents have been assured that degrees earn big salaries. At the same time, voters have been told that higher education brings social mobility. Both claims have been made far too broadly – and the losers are those now coming out of university with 50 grand owing to the student loan company, a socking great overdraft and the discovery that internships and coffee shops are the only prospects.

I and others have argued down the years that there is no point in creating more graduates unless you have more graduate-level jobs. Such a position strikes me as being so obvious as to be crass, but it has been ignored by successive governments.

The result can be seen in research published last August by the Oxford economists Ken Mayhew and Craig Holmes. They found that the UK now has proportionately more graduates than any other rich country bar Iceland – yet uses their brains much less than most other countries: the “underutilisation” of graduates – at work but not using their skills – is higher in the UK than anywhere in the EU bar Romania, Greece, Croatia, Latvia and Slovenia.

So what are our graduates doing? Jobs that previously didn’t need a degree. Over one in 10 childminders (11.5%, according to the 2014 Labour Force Survey) are graduates. One in six call-centre staff have degrees, as do about one in four of all air cabin crew and theme-park attendants. In a labour market flooded with graduates, picky employers are now able to take the CVs boasting a university education. And so any young person who didn’t go to university now stands to be treated as a second-class employee.

And universities – with the connivance of their vice-chancellors and marketing departments – have allowed themselves to be sold to the public largely as CV-finishing schools. It is a gross act of vandalism to have committed on a higher education system that the rest of the world once admired. And it has displaced all the other values that accrue both to the individual and to society from education. Critical thinking, public knowledge? You won’t get much change for those from a government that plans to gag academics from using their publicly funded research to question public policy and hold politicians to account.

As for Willetts, he owes me an apology. But nothing like as big as the one he and his colleagues owe to tens of thousands of university graduates, stuck in low-paying jobs that don’t use their expensively acquired skills and certainly don’t pay off their vast debts.

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