Graphic: Sydney Morning Herald 25 July 2007
I find it interesting that starting salaries for Australian university graduates have declined in real terms. According to the Graduate Careers Australia's annual survey, university graduates under 25 earned an average $40,800 last year, up just 2 per cent from 2005.
By comparison, Australian Bureau of Statistics figures show that the mean weekly earnings for employees in all jobs increased by 6.8 per cent over roughly the same period. New graduates are now earning less than 80 per cent of average weekly earnings for only the second time since the figures were first collected in 1977.
According to Harriett Alexander in the Sydney Morning Herald , the figures continue a three-decade trend of graduate salaries slipping against average earnings.
The Graduate Careers' report suggests that the trend could represent the effect of more university graduates entering the workforce. I am sure that this is right, although other factors are at play as well.
There seems to be an increasing degree of reluctance among professional services firms to recruit and train raw graduates given that they are increasingly unlikely to stay with the firm. Instead, firms are targeting graduates with a few year's experience who can be productive immediately.
This gives rise to a chicken and egg problem in that the supply of such graduates depends upon firms accepting and training raw graduates.
In this context, I was interested in the very low median starting salary for accountants. I have a young colleague, an accountant, who has been struggling to get a job to gain experience. At the same time, KPMG in Australia is recruiting accountants from Latin America.