Overeducated & Underemployed
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In the wake of the 2014 Australian Federal Budget’s proposed reforms to higher education, let’s take a look at the reality faced by Australian university graduates.
Firstly, a quick recap of how the budget will impact university students:
- Decreased funding for university courses
- Deregulated university fees – a move expected to create US-style “Ivy League” schools and inaccessibility to tertiary education
- 6 month freeze on welfare payments to unemployed people under 30
- Higher interest rate on Higher Education Loan Payments (HELP) debts
- Earlier repayments of HELP debts
As Tony Abbott prompts young Australians to “learn or earn”, this writer wants to know… How about those who have learnt, but now cannot earn.
Most young people in Australia are taught a similar recipe for success: study hard at high school, get into university, work hard to achieve a degree and then you will be able to find a good job. For a large number of us, though, the last step of this recipe doesn’t eventuate.
Education Minister, Christopher Pyne, would have us believe that “university students, who have a less than 1% unemployment rate,” are in an ideal position to handle these budget reforms.
However, Pyne’s statistic is not reflective of the current job climate for university graduates. The Australian Bureau of Statistics finds that unemployed university graduates comprise 3.3% of the total labour force. To put that into context, 16% of unemployed people have university qualifications. Graduate unemployment is a very real phenomenon. In 2013, for example, nearly a third of Bachelor’s degree graduates did not find full-time work.
An even more prominent issue is the underemployment rate of university graduates. That is, the number of people working in jobs beneath their qualifications and those working fewer hours than desired. According to the OECD, Australia’s underemployment rate is significantly higher than the international average.
Between 1999 and 2012, university course completion numbers have risen by 82%; but the number of available jobs hasn’t risen so drastically. It isn’t that there are fewer jobs these days; rather we have an oversupply of qualified workers.
Hordes of undergraduates are completing university courses – from arts to law to business – and going out into the big wide world of work, only to find there are no opportunities for them to do what they are qualified to do.
As a result, many are returning to university to complete even higher degrees in order to obtain jobs that only require an undergraduate degree. In fact, between 2007 and 2012 post-graduate enrolment increased over 100%.
The overeducated youth population presents a trickle-down underemployment predicament. Postgraduates are securing undergraduate jobs beneath their qualifications; meanwhile, undergraduates are losing out on these jobs to their overqualified counterparts and finding themselves in positions that only require a high school education.
Being underemployed often equates to being underpaid. So after studying hard at university for years, many young people – currently drifting between casual and part time service-industry jobs that offer little stability or security – are living on less, and will soon have to face rising student loan debts.
Moreover, university graduates also have to compete in the job market with service-industry professionals who opted for industry experience over tertiary education. Oftentimes they lose out. The budget reforms will leave these qualified, unemployed individuals without support for 6 months.
It is understandable that middle-aged professionals say, “earn or learn”, as higher education previously meant higher employability. However, the reality is not so simple for young people today. Graduate unemployment and underemployment are real issues facing today’s youth, issues that have not been reasonably considered by the 2014 Australian Federal Budget.
Becky Rowe is a twenty-something passionate about writing, philosophy, holistic living, truth seeking, the Earth and a whole lot more.