Jobless graduate tally to hit 100,000

Sun, 8 Nov 2009 - 5:56pm

THE number of jobless university leavers is expected to break the 100,000 barrier this week, heightening fears of a “lost generation”. Tens of thousands of out-of-work graduates from the class of 2009 have joined the 70,000 from last year who have still not found employment, official figures are expected to confirm.

The flood of applicants for the shrinking number of graduate jobs has led recruiters to become increasingly tough in their entrance requirements. Sainsbury’s has joined the growing ranks of companies that will not accept any entrants to its graduate programme with a degree lower than a 2:1, a threshold once confined mainly to elite City firms and consultancies. Unemployment data to be published on Wednesday by the Office for National Statistics will also show that the total number of jobless under 25 passed the 1m barrier in October, up from 946,000 in August.

The number of new graduates unable to find a job means nearly 8% of those aged under 25 with a degree are now without a job. David Blanchflower, professor of economics at Dartmouth College, New Hampshire, and a former member of the Bank of England’s monetary policy committee, said the level of joblessness among graduates and other young people was a “national crisis”. He called for the suspension of national insurance contributions for the under-25s and subsidies for employing the young. “A spell of unemployment is bad when young and the longer it is, the worse it is,” said Blanchflower. “We want to do everything to prevent it becoming long-term unemployment.”

The rise in the numbers leaving university and entering the jobs market, with 300,000 graduating this year, has led to increasingly strict selection criteria. In addition to asking for at least a 2:1 degree, companies are demanding strong grades at A-levels and even GCSEs to pick the best candidates. KPMG, the accountancy firm, demands that graduates have at least an A and two Bs at A-level rather than the three Bs it required in 2008. Similarly, Accenture, the management consultancy, has raised the A-level grades threshold graduate applicants must reach from one A and two Bs, to two As and one B. “We’ve done that to manage the volume of applications,” said Julia Harvie-Liddel, recruitment director for Accenture UK and Ireland.

The competition for jobs is illustrated by companies such as the budget retailer Aldi, which received 22,000 CVs for 130 graduate places this year. PriceWaterhouseCoopers, the accountants, saw a 35% jump in graduate applications with 12,000 vying for 1,000 jobs.

There is also heavy competition in the public sector. Rachel Cowe, 22, has a psychology degree from Liverpool University and £13,000 of student loans to repay. She would like to work with young offenders but every job application she has made to the prison service has been rejected. “Almost everyone from my course is in the same situation. I desperately want to get my career started but I can’t see things improving. “I might go to Australia and try to get a job there. I’m open to anything at this stage,” Cowe said.

Jackson Almond, 22, has a 2:1 in business studies from Liverpool. He would like to get a job in marketing but so far the most positive reaction he has had from the dozens of companies he has applied to is that they will keep his CV on file for future positions. “It is frustrating that someone who walked out of university with exactly the same degree as me a few years earlier would have walked into a really good job, whereas now that seems impossible,” he said.

Charles Ball, research director at the Higher Education Careers Services Unit, said graduate unemployment was at its worst since 1992 when it peaked at 13%. If the current downturn continues, the graduate unemployment rate may continue to rise. The overall impact could be bigger because in 1992, 160,000 people obtained degrees, just over half the current figure. The expansion of higher education has been fuelled partly by better job prospects and the promise of higher salaries. Ball warned that the market may not pick up soon. “If we are to follow the pattern of other recessions, the graduate market is unlikely to return to normal until 2013,” he said. Four years from now might be too late for many of today’s graduates. Previous studies have found that graduates who fail to find work are still held back in their forties.

Fees review

Lord Browne, former chief executive of BP, is to be named tomorrow as chairman of a government review of university funding, which could lead to tuition fees of £5,000-£7,000. The review may also increase help for part-time students and link funding to teaching quality. Poor standards have sparked student protests. Higher fees could fill the gap if, as expected, Treasury funding is cut. Lord Mandelson, the first secretary, has held talks with David Willetts, shadow universities minister, to agree the review’s chairman and remit. Browne will report after the election, denying voters a say. Browne’s spokeswoman said he would not comment before tomorrow’s launch of the review. The National Union of Students warned of a “cosy stitch-up” between political parties and vice-chancellors.