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UK on brink of low-waged high-skilled economy
4 December 2008
Higher education's role will spark debate as the returns on knowledge fall, writes Rebecca Attwood
UK graduates will struggle to reap a return on their investment in higher education, in salaries and career prospects, research suggests.
University student numbers around the world have doubled, and multinational companies are increasingly ready to recruit employees from countries that can deliver high-skilled labour at low cost, the authors of the seven-country Economic and Social Research Council-funded study warn.
They say their report, Education, Globalisation and the Knowledge Economy, raises fundamental questions about the future role of higher education.
In his foreword to the report, Ian Diamond, chief executive of the ESRC, writes: "We may be entering an era in which many young people now investing in education across the developed world may struggle to attain the comfortable jobs and careers to which they aspire.
"They risk being bypassed by decisions to send work ... to people in Asia and elsewhere, who bring the same skills to employers at much lower prices."
The report points out that university enrolments around the world reached close to 63 million by 2005 and that China now has more students in tertiary education than the US. It warns that: "While it is too early to reach firm conclusions, we must confront the prospect of a high-skilled, low-waged economy for the UK."
The report's authors - including Phillip Brown, professor in the School of Social Sciences at Cardiff University, and Hugh Lauder, professor of education at the University of Bath - say a disjunction between education, jobs and financial rewards would have "profound implications" for our understanding of educational opportunity, justice and social mobility. "The role of higher education will be subject to intensive political and educational debate as the returns (of) knowledge decline for many, and when income inequalities are increasingly seen to be divorced from 'meritocratic' achievement," they suggest.
Meanwhile, a University of Oxford academic has suggested that some UK students with vocational qualifications might end up better off financially if they opted for apprenticeship not a degree.
At the Society for Research into Higher Education's annual conference next week, Geoff Hayward, associate director of the Centre on Skills, Knowledge and Organisational Performance, will argue that students progressing to higher education with vocational qualifications should be given better information on the likely graduate salary "premium" for specific courses.
While the Government claims that the wage premium for graduates is about £100,000 before tax over a working lifetime, research suggests this varies by course and institution.
Dr Hayward said: "Those with suitable levels of prior attainment to undertake apprenticeship at level 3, where there are known skills shortages, may be deterred from doing so by government rhetoric that promotes higher education even though the wage premium associated with undertaking an apprenticeship may be higher than the wage premium associated with holding a degree."
rebecca.attwood@tsleducation.com.
Readers' comments
It is a world wide phenomenon that increased skills means less pay. The trouble with companies as they expand is that they outsource, offshore and export their services to the cheapest bidder to get the job done. So it will always be a battle for the lowest salary. Secondly, with the dumbing down of academic degrees worldwide more and more candidates should opt for professional vocational qualifications which includes experience, skills and achievements. The academic degree has been over-rated and now obviously minimised in importance. A piece of paper with a nice waxed or paper stamp with a signature by the VC.
There's nothing wrong with having a well educated but modestly paid population. Sweden has succeeded very well with this model. <p>However, the UK is not like Sweden - the UK education system is geared towards giving out certificates and not education. <p>I foresee problems ahead...
I don't know why this is such a big surprise. You only need look at the terms and conditions of contract university staff to see that high academic achievement results in a stunted career, low-paid future.
As in their previous publications, Brown and Lauder fail to distinguish between 'skills' (which they cannot define) and qualifications. So the story is we are headed for a low wage/ highly certified society - not a 'high skilled' one, which is nonsense on stilts! Needs no ghost come from the grave to tell us this.
This has been going on for at least 15 years. <p>With the number of graduates rapidly increasing, there has not been a corresponding increase in 'graduate' jobs. The same number of vacancies but many, many more suitably qualified applicants. This means a lot of wasted talent, in terms of employment. A redefining of what is a graduate job has happened whereby working in a call centre is called a graduate job by some employers, because with the surplus of grads they know they can get a highly qualified person to do a fairly basic post which previously a non-graduate would do. <p>Then there is the trend that degrees and knowledge are not recognised as being as important as some other skills such as 'sales' or making money probably started during the Thatcher era and carried on with subsequent govts. Making money was all, knowledge and being educated was considered less important, employers became caught up in this dumbing-down culture. <p>This has all more recently been compounded by companies now outsourcing overseas. <p>There may be a situation soon, as happened in post-Communist Russia, where highly-qualified academics are forced to drive taxis for a living!
The comments above by Roger and The Magnetist remind me that very highly qualified and successful people in the arts have frequently been paid a pittance. So nothing new there.... though that's not an excuse for poor pay. <p>Education is important for many more reasons than 'just' (!) money; for a start, it's been shown that well educated parents (especially mothers) are a factor in benefitting the next generation. It's important to look at more outcomes than salary, critical though this is. <p>Does the same outcome, salary-wise and in employment terms generally, apply when additional factors such as professional qualifications (MBA, accountancy, teaching...) are also considered? <p>Whatever, a triple bottom line should be considered when looking at educational level and outcomes. Education in any real sense will equip people better to lead their lives, not just do their jobs - as I'm sure that those who produced this report would readily acknowledge. <p>Hilary B. www.hilaryburrage.com
We can safely ignore the jeremiads about 'dumbing down', but from bitter experience I certainly agree with @The Magnetist. <p>Still, money isn't everything: while I have certainly sacrificed income for higher academic qualifications, they can offer huge cultural, psychological and intellectual benefits in themselves. High earners expend a lot of cash and energy pursuing prestige goods, whereas the greater one's educational self-confidence, the more that one can enjoy the really important things that the public sphere thankfully still offers for free or for modest sums: culture, art, health, relationships.