Unemployment among services sector degree-holders rises 12-fold

UNEMPLOYMENT rates among young people with degrees to work in the services sector rose 12-fold in less than two years.

The proportion of those aged 25 to 34 with at least a level 8 degree in services — covering areas such as sports, catering and transport management — rose from 1% in the first quarter of 2008 to 12% at the end of last year.

Analysis by Fás’s skills and labour market research unit also reveals that young graduates in teaching, engineering, manufacturing and construction also quadrupled.

However, the figures, in a report from the Expert Group on Future Skills Needs (EGFSN) on education and training outputs, also highlight the relatively high levels of employment among third-level graduates compared to those with lower qualifications.

For example, the 78% of those in the 25 to 34 age bracket who had a level 8 or higher qualification in services fields was the lowest rate among a range of categories.

The highest was 92% among those with teaching or other education degrees, despite the numbers unemployed in that category rising from 1% to 4% from the first quarter of 2008 to the final quarter of last year.

More than a third of all graduates who were working at the end of 2009 — about 69,000 people aged 25 to 34 — had a qualification in social sciences, business or law.

In a reflection of the impact of the collapse of property and related industries, the biggest decline in employment levels was among young graduates from the engineering, manufacturing and construction fields, down from 90% to 80% — a drop of 7,700 jobs.

The overall rate of 85% of young graduates in employment — with another 8% involved in further study or not seeking work — was described by EGFSN chair Una Halligan as an overwhelming message that further education creates opportunities.

The figures may also strengthen arguments for some form of student contribution towards higher education. It has been argued that the higher earning capabilities of those with third-level qualifications justify them paying tuition fees, with proposals shelved last year by former education minister Batt O’Keeffe which would have seen graduates repay the state after reaching certain income levels.

Although the Green Party ruled out any such return of fees in the renegotiated government programme last autumn, Fine Gael has also proposed a graduate tax under which degree holders would pay increased PRSI contributions. Opponents of the mid-1990s abolition of fees argue that highly qualified workers already repay the state through the higher income tax rates they are more likely to pay.

The EGFSN report shows that, despite Government cuts which are set to drive up pupil-teacher ratios in schools, 25-to-34-year-olds with education qualifications were the only category in which the number of working graduates rose. This is likely to be linked to the fast-rising numbers of primary and second-level pupils, also highlighted by the skills needs report.


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