Degree holders better paid than non-graduates
May 12 2011
Evidence over the last decade reveals a pay discrepancy between those with degrees and those without
Degree holders earned an average of £12,000 a year more than non-graduates over the past decade, research finds.
According to analysis from the Office for National Statistics, graduates aged 22 to 64 had median salaries of £30,000 compared with £18,000 for non-degree holders.
For those without a degree, earnings initially increased for each year of age but levelled off around the age of 30 and peaked at the age of 34, where earnings stood at £19,400. For those with a degree, earnings increased faster for each year of age. They also increased for longer, levelling off around the age of 35 and peaking at the age of 51 at £34,000.
Earnings for women, for both those with and those without a degree, levelled off at a younger age than for men with the same level of qualification.
Over the last decade, a male graduate could expect to earn on average 20 per cent more than a female graduate – however the gap was marginally wider for non-degree holders at 23 per cent.
In 2010, around one in three female graduates had a degree in either health-related studies or education, compared with only one in 11 male graduates, while almost one in two graduates had degrees in business and finance, sciences or engineering compared with only one in five female graduates.
Professional negotiator Clive Rich says that it may be difficult for small businesses to recruit graduates due to graduates’ high expectations of what they are able to negotiate for themselves.
Says Rich, ‘The best way for a small business to tackle this perceived deficit would be to focus on their own bargaining ‘aces’ when seeking to recruit graduates. For example, compared to a bigger company, smaller firms might be able to offer shares, freedom to act, independence, and the potential to achieve something new and innovative. For a graduate who has an ‘achievement’ need as a negotiator this might be highly motivating even if they could negotiate a higher salary somewhere else.’
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