Graduate Unemployment May Hit Record Levels

A research body is warning that the planned public spending cuts could have a detrimental effect on graduates over the next few years as it expects graduate unemployment to hit record levels.

The Higher Education Careers Service (HECSU) warns that because so many college leavers join the public sector, they are especially vulnerable to cuts.

At present, around 39,000 graduates join the public sector every year, and the HECSU has said that if this was to reduce by a fifth, then this would double the levels of graduate unemployment.

Forecasts show that around 610,000 jobs in the public sector could be lost by 2016 and almost half a million of those may well be gone by 2015.  This is according to the independent economic forecasting body the Office for Budgetary Responsibility.

The jobs generally taken by graduates are said to be among the ones ‘at risk’ as they are not considered front line jobs.  Front line jobs have been earmarked by the government as being exempt from the cuts. This would mean that a drop of 20% in graduates gaining these jobs remains very possible.

"That would put graduate unemployment over 20% and pushing towards 25%," said Charlie Ball, deputy research director at HECSU.

The highest graduate unemployment rate seen in the UK was 13.5% in 1983.

According to Mr Ball, "it would not take much of a shock to the graduate jobs market to make the next few years some of the toughest ever experienced".

Mr Ball also believes that the cuts are going to have an even bigger impact on parts of the country with a weak economy; this is because they are far more reliant on the public sector than other areas.

The North East and Wales were highlighted as places that are likely to be the worst hit, as a quarter of all graduates in the areas enter the public sector, many of them enter into higher education with the NHS.

"This suggests that job cuts could drive educated young people away from regions that need to retain them and into the capital, in search of work," he warned.

"We don't know exactly where the cuts are going to fall, how deep they will be or when they will take place.

"However... the impact of the proposed cuts could be sufficient to have a profound effect on the labour market for new graduates, and particularly on those outside London.

"It is possible that the next four years could be the toughest for new graduates ever."

Posted at 12:09PM Jul 02, 2010 by Marc Stenton in The Economy  |  Comments[0]