In a recent survey by thinkmoney.co.uk, results revealed that nearly 40% of current UK graduates believe they are earning £10,000 less per year than they should be. Another survey from Satsuma Loans demonstrates that around half of all graduates feel that their starting salary is so low that they are actually ‘embarrassed’ by it.
But are graduates right to feel that they’re getting a raw deal, or are their expectations unrealistic? If the latter, what is it that’s giving them such a skewed perspective of working life?
Getting the facts straight
First things first, let’s look at whether graduate expectations match with reality. According to the Satsuma survey, when you match up student expectations with the actual salaries they are likely to receive, the data lines up. Rather than believing they will receive higher salaries then being disappointed when they receive their first job offer, it seems graduates know exactly what to expect. They don’t hold unrealistic expectations, so why the discontent?
The survey found that, while graduates are perfectly aware of the salaries on offer post-university, the frustration arises from the fact that they feel these salaries simply aren’t high enough to cover living costs.
A return on investment
But are those 40% of students right to expect £10,000 per year more than they are currently earning? To answer that, we need to look at what determines a graduate salary. One of the biggest issues is that, historically, graduates earned so much because they were part of an elite workforce; in the 1950s only 4% of the population went on to higher education. Compare that to the nearly 50% of people who go on to receive a university degree today, and it becomes apparent that graduates are simply no longer the commodity they used to be.
That being said, it is also important to take into consideration the current cost of higher education. Today’s students are paying nearly three times more than students who graduated just five years ago, or 100% more than those who graduated before tuition fees ever existed. With so much debt now tied to higher education, it’s hard to blame graduates for expecting a higher return on their investment.
The current economic climate also plays a big part in graduate expectations. According to research, a majority 65% of graduates now earn less than £16,000 per year. In comparison, the average in Britain is £921 per month – that’s £11,052 per year on rent alone. As salaries fail to rise in line with rocketing rents and living costs, 49% of current graduates are finding that they can’t afford to rent their own home on a graduate salary at all and have been forced to move back in with their parents.
It seems then that it’s less that graduate expectations are unrealistic, more that current salaries are unrealistic when it comes to sustaining graduates – especially considering the increase in fees, living costs, and competition they now face in comparison to graduates in the past. University students know exactly what they’re going to get, they just – rightly – feel they deserve more; whether or not they will ever receive it is another matter.