Yesterday, the Council of Ontario Universities released the results of the Ontario Graduates’ Survey for the class of 2012. This document is a major source of information regarding employment and income for the province’s university graduates. And despite the chipperness of the news release (“the best path to a job is still a university degree”), it actually tells a pretty awful story when you do things like, you know, place it in historical context, and adjust the results to account for inflation.
On the employment side, there’s very little to tell here. Graduates got hit with a baseball bat at the start of the recession, and despite modest improvements in the overall economy, their employment rates have yet to resume anything like their former heights.
Figure 1: Employment Rates at 6-Months and 2-Years After Graduation, by Year of Graduating Class, Ontario
Now those numbers aren’t good, but they basically still say that the overwhelming majority of graduates get some kind of job after graduation. The numbers vary by program, of course: in health professions, employment rates at both 6-months and 2-years out are close to 100%; in most other fields (Engineering, Humanities, Computer Science), it’s in the high 80s after six months – it’s lowest in the Physical Sciences (85%) and Agriculture/Biological Sciences (82%).
But changes in employment rates are mild compared to what’s been happening with income. Six months after graduation, the graduating class of 2012 had average income 7% below the class of 2005 (the last class to have been entirely surveyed before the 2008 recession). Two years after graduation, it had incomes 14% below the 2005 class.
Figure 2: Average Income of Graduates at 6-Months and 2-Years Out, by Graduating Class, in Real 2013/4* Dollars, Ontario
*For comparability, the 6-month figures are converted into real Jan 2013 dollars in order to match the timing of the survey; similarly, the 2-year figures are converted into June 2014 dollars.
This is not simply the case of incomes stagnating after the recession: incomes have continued to deteriorate long after a return to economic growth. And it’s not restricted to just a few fields of study, either. Of the 25 fields of study this survey tracks, only one (Computer Science) has seen recent graduates’ incomes rise in real terms since 2005. Elsewhere, it’s absolute carnage: education graduates’ incomes are down 20%; Humanities and Physical Sciences down 19%; Agriculture/Biology down 18% (proving once again that, in Canada, the “S” in “STEM” doesn’t really belong, labour market-wise). Even Engineers have seen a real pay cut (albeit by only a modest 3%).
Figure 3: Change in Real Income of Graduates, Class of 2012 vs. Class of 2005, by Time Graduation for Selected Fields of Study
Now, we need to be careful about interpreting this. Certainly, part of this is about the recession having hit Ontario particularly harshly – other provinces may not see the same pattern. And in some fields of study – Education for instance – there are demographic factors at work, too (fewer kids, less need of teachers, etc.). And it’s worth remembering that there has been a huge increase in the number of graduates since 2005, as the double cohort – and later, larger cohorts – moved through the system. This, as I noted back here, was always likely to affect graduate incomes, because it increased competition for graduate jobs (conceivably, it’s also a product of the new, wider intake, which resulted in a small drop in average academic ability).
But whatever the explanation, this is the story universities need to care about. Forget tuition or student debt, neither of which is rising in any significant way. Worry about employment rates. Worry about income. The number one reason students go to university, and the number one reason governments fund universities to the extent they do, is because, traditionally, universities have been the best path to career success. Staying silent about long-term trends, as COU did in yesterday’s release, isn’t helpful, especially if it contributes to a persistent head-in-the-sand unwillingness to proactively tackle the problem. If the positive career narrative disappears, the whole sector is in deep, deep trouble.