Australia’s TAFE sector has hit out at universities for delivering Australians higher debts and weakening jobs prospects. From The ABC:
TAFE has taken a swipe at universities and their ability to make students job-ready, telling careers advisors that 30 per cent of students at one of its Sydney campuses already have degrees…
“Why is it that every Uber driver I speak to has a communications, business or law degree?” Mr Black asks.
“Just this week the Productivity Commission released a report which shows that university students are struggling to find employment relevant to their studies.
“[So] would you rather finish with a $4,000 debt or a $30,0000 debt?
“With strong job prospects or weak job prospects?”
TAFE is currently in a state of regrouping after years of budget cuts, fee increases, closures and competition with the private sector…
“The engine room of our economy comes from people that have skill, that can practically deliver work in the workplace.”
I have said it before and I will say it again: a university degree in Australia used to mean something, but no longer does.
It used to be that to gain entry to a decent course at a decent institution, students were required to work hard at school and gain a tertiary entrance score above a high threshold.
Advertisement
Those days are long gone. Thanks to the uncapping of university places, allowing universities to recruit as many students as they can fit in order to accumulate HELP/HECS funding, actual tertiary entrance scores have plummeted, meaning every person and their dog can now get a degree, devaluing their worth in the process.
Indeed, the Productivity Commission’s latest report, released on Tuesday, showed that employment outcomes for full-time graduates “have been getting worse”:
For those who do complete their degrees, post graduation outcomes have been getting worse. Full-time employment rates for recent graduates have been declining, even as the Australian economy has continued to grow (figure 3.3). Many of those who do not work full-time are not in that position by choice, with the underemployment ratio among graduates at 20.5 per cent in 2016, compared with about 9 per cent in 2008. Graduate starting salaries have also been growing slower than wages across the broader economy (declining from nearly 90 per cent of average weekly earnings in 1989 to about 75 per cent in 2015)…
Further, over a quarter of recent graduates believed they were employed full-time in roles unrelated to their studies, to which their degree added no value. To the extent that someone without a costly university education could have undertaken these roles, this can then have cascading employment and income effects down the skills ladder.
Many employers are also not satisfied with the quality of recent graduates, with about one in six supervisors saying that they were unlikely to consider or would be indifferent to graduates from the same university…
University students are also not satisfied with the teaching in their courses…
Advertisement
In short, what has effectively occurred in Australia is a form of university ‘quantitative easing’, whereby a university degree has lost its value as graduate numbers have exploded, despite the significant cost to both students and the Budget.
In a similar vein, higher education is no longer centred around boosting the nation’s productivity. Rather, it is about teaching as many students as possible to accumulate Commonwealth government funding through HELP/HECS debts.
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.
