Sometimes it can be hard to see the wood for the trees.
A few headlines on news stories in the last month about graduate earnings are a case in point.
Reading them, you’d be forgiven for thinking there was no longer an earnings edge for graduates in today’s job market.
But that’s not the case.
And that’s not what the latest Grattan Institute report on graduate earnings found.
In fact, it showed that a younger generation of Australian university graduates continue to have a substantial wage premium compared to people with no post-school education.
In 2006, younger female graduates earned just over $15,000 a year more than school-leavers.
In 2016, young females who had just graduated from university were still earning more — just under $14,000 a year extra.
For male graduates, they still earned around $12,500 a year more, down slightly from $14,000 a decade earlier.
So even though that gap had narrowed slightly over a decade – by 8 per cent for women and 6 per cent for men – it’s still a substantial advantage.
And over a lifetime, that premium becomes even more significant.
Men with a degree have lifetime earnings $800,000 above male school leavers. For women, this lifetime wage premium is $600,000.
These returns on a university education are after you factor in the cost of a degree and tax.
A university education also delivers greater average lifetime wage premiums than vocational education.
The median earnings of people with a Bachelor’s degree is $245 more per week than someone with a vocational qualification.
And if you have a postgraduate degree, that earnings difference increases to $465 per week.
And younger university graduates are earning these income premiums despite the hits to our national economy and jobs from the global financial crisis and end of the mining boom.
Clearly there are enduring financial benefits for younger Australians who pursue a university education – despite the significant expansion of access to higher education over the decade to 2016.
It’s also worth noting that the worst of these economic challenges appear to be behind us.
As the Grattan report makes clear, newer university graduates are emerging to better prospects in the job market.
Despite the hits of the GFC in 2009 and the end of the mining boom in 2013, there was still very strong demand for graduates to fill managerial and professional jobs.
In fact, university graduates are two-and-a-half times less likely to be jobless than people who finished their education at high school, 2017 ABS data confirms.
Australian Government data also shows that nine out of ten graduates in Australia are employed full-time within three years of finishing their studies.
Having a university education continues to be a clear advantage in the workforce.
And this will become increasingly important.
The Australian Government’s Department of Jobs and Small Business forecasts that over 90 per cent of the 940,000+ new jobs created by 2022 will require a post-school qualification.
The Department also projects that professional, scientific and technical services jobs will grow by 126,000 jobs by May 2022. This is the second largest increase of any industry – bigger than construction and education and training.
Deloitte predicts Australia will need another 3.8 million skilled graduates by 2025.
These are exactly the kind of jobs our highly-skilled university graduates are equipped to perform – and the jobs they will gravitate toward.
Of course, university study is not all about money; it teaches us to question assumptions, helps us to sort fact from fable, and sets people up for a good life.
But, choosing a university education is a smart investment. Let’s not pretend anything else.