Graduate Salaries not keeping up with inflation

[sloaneydogge]

I know this is a problem that many workers face, but this discussion is for graduate jobs only.

But it seems that graduate salaries this year are staying at the same level in a few sectors that I know about. Some haven’t increased since 2020. In which time, inflation means things are 20% more expensive, and my dds rent this year alone has gone up 25%.

Has anyone else noticed this? When you don’t earn a huge amount, these sorts of sums mean that there isn’t money leftover for treats or niceities/eats into the ability to save.

I don't think they've really increased since the year 2000 from what I can see. Would be an interesting data analysis alongside the cost of a 2 bed home.

I only have data going back 10 years for my employer. The entry level salary increased by 32% between 2012 and 2022. (Although I think you’d need a masters, rather than just a bachelor’s degree).

(Increased by 14.9% since 2020).

I don't think most salaries are keeping up with inflation.

Wasn’t the point I was making @JenniferBarkley

@HainaultViaNewburyPark you’re absolutely right. Some of the big 4 have seen salaries stagnate since the 00s! @Rollercoaster1920

I have no idea about lots of other sectors mind you, might be even worse

Agreed, DD has a first and only earning £24 for central London. Her outgoings are big so she feels like she had more money to spare when working at a shop while at uni. It goes nowhere.

Supply and demand? Over the last twenty years there are twice as many Grad's, and four times as many firsts. If you have a large willing pool of resource, you don't need to raise the wage to get who you want.

I know you only want to talk about graduate salaries but they are impacted by other salaries because that's the next step a graduate takes.

So if graduate salaries has risen but others hadn't they would have ended up being higher than the next grade up which doesn't make sense.

What has increased, quite dramatically, is the minimum wage and the difference between that and graduate salaries has been reduced. It seems unfair but it's the case across all industries where you earn very little more than NMW now than you do for jobs requiring an education and or jobs with quite a bit of responsibility.

However if wages were to rise, inflation would be worse, so I don't think this Government have much incentive to encourage it.

It is relevant though OP. If graduate salaries increase in line with inflation, then experienced staff will (justifiably) expect their salaries to increase by the same percentage. Not many businesses can afford that unfortunately.

@Ohmylovejune makes a good point. Teacher recruitment is low and one of the incentives (along with generous bursaries)is an increase in starting salary to £30k. Pay up the scale hasn't increased relatively so the whole pay scale is compressed.

I am in accountancy and I don’t think graduate salaries have increased much since I started in 2015 - maybe only £1k/£2k!

Tbh all salaries in accountancy haven’t moved much in the last couple of years, that’s why everyone is leaving 😂

Do you know ANY salaries that are keeping up with inflation? MPs maybe but that's all. Graduate rates aren't set in isolation.

Our graduates start on 35k (small IT co.) in central London and seem to manage ok.

My DD's has just been put up 11% she's happy

And I have to say, OP, I tried to recruit a several graduates in 2021/22 and the standard was so poor, I gave up and employed a 28yo 2nd jobber graduate for the same salary.

DS knows new graduates in London and he says they are just existing as all their money goes on rent. It’s going to undo years of widening access if only those with family in London / SE can work there. That’s been an issue for internships for years. I’m expecting a lot of graduates to go abroad or join regional firms instead. But there’s also a huge issue with current student rents which are exploding as landlords pass on mortgage rate rises to tenants while the loan stays the same.

My DH has a graduate job in a sector that's always been low pay (ecology). His salary has barely increased in the 8 years since he started working in that sector and he now earns only a little above minimum wage (which was of course a lot lower in 2015 at £6.50 an hour compared to £10.42 today).

Where are all the accountants leaving to @PurplePear7 ? Other sectors, other professions? Other countries?

I think a mixture really! A lot have gone into other finance/finance adjacent roles and some just having complete career changes.

To be fair it’s not just the money, work/life balance isn’t great especially in the junior years. Less graduates are going into accountancy now too, my thinking is that you get better money elsewhere now (tech).

https://www.theaccountant-online.com/news/over-a-third-of-accountants-considering-leaving-the-profession-in-next-five-years/

I don't understand the shock why would you expect a graduate to be any different it's not like they are the only ones surely it would be really odd if basically non experienced employees outstripped and caught up with the experienced?

Graduatejobs.com gives a realistic salary picture for the majority. IFS found firsts and 2:1 make a difference over lower classifications but only firsts from a select few elite universities make much difference over a 2:1 from RG and a few others. Subject matters a lot. The web site above lists employment sectors. Like all job sectors, you have to evaluate likely salary progression. Yes, starting salaries have not moved much. Many have stagnated for years. Also some jobs have annual increments and a cost of living hike. Others don’t have increments. So all 6th formers should think about possible salary before their degree snd evaluate if it matters to them.

Graduate salaries have barely risen since I graduated over 10 years ago. There is an oversupply of graduates.

Also, as others have pointed out, graduate salaries aren't going to rise while nobody else's salary is!

Sad but not surprising re Purple link re accountants leaving.

I'm not disputing what you say. However, it is depressing to know that salaries will not increase in line with inflation, and that we are all becoming poorer and poorer as the years go by.

When/if inflation goes down will people accept a decrease in salary?

We rarely see no inflation. There was a big reset in salaries after the fiscal problems in 2008. Many companies did cut salaries. It was done in order to protect jobs. Otherwise we would have seen mass redundancies and firms going under.Remember Lehmann Brothers? I don’t think salaries have recovered since then for mainstream employees. We are just about to see Canary Wharf hollowing out too as WFH and firms pulling out of London takes hold.

There are always high earners in some sectors but the average employee hasn’t seen big rises in state or private sectors. Even now they are mostly below inflation. The only way up is promotion or doing more business if you are self employed and don’t have big overheads elsewhere!!