Too many uni graduates, not enough jobs


By Leith van Onselen

The conga-line of commentators criticising Australia’s demand-driven university system just grew a little longer, with Fairfax’s Nicholas Stuart penning a well-argued piece on the massive waste inherent in the university system:

Degrees have become commodified; just another product. The only difference is they operate in a hugely protected and subsidised market.

If there was a 10 per cent failure rate for anything else we bought we’d be outraged: yet we happily accept the massive waste and despair that comes each year as thousands drop out of uni. The taxpayer effectively hands over billions of dollars to fund a system where we know way over ten percent of the money will be wasted each year…

It’s difficult not to suspect that if universities had to pay a financial penalty every time a student dropped out, admissions procedures would suddenly become far more rigorous.

…why do we believe that everyone needs a degree to have a good life, or that the country will be stuffed if people don’t? Particularly when the evidence seems to be suggesting we’ve got far too many people with degrees…

A bit of transparency might help to introduce some accountability into a sector grown bloated and wealthy without feeling any obligation to justify its own shortcomings. It’s time to challenge the system. University training offers people a chance to take their lives in new directions. So do trades. Both are vital for our future.

Stuart makes some pertinent points.

Australia has created a system whereby it has far too many university graduates chasing too few jobs. This was highlighted in no uncertain terms by the Department of Employment’s (DoE’s) latest skills shortages report, which showed there were a record 1 million domestic students enrolled in a bachelor degree:

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However, bachelor degree graduate employment outcomes are falling and are at “historically low levels”:

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Meanwhile, the one area where “skills shortages” are more widespread – technicians and trades:

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Are experiencing relatively few commencements and completions:

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One of the biggest mistakes Australia ever made on the education front was to gradually close secondary technical schools between the 1970s and 1990s, in the false belief that it is more desirable for young people to go to university.


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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.