New graduates' incomes decline in 'real terms'

University of Otago student India Leishman (19) looks at new data revealing her future earning potential. Photo by Peter McIntosh.
University of Otago student India Leishman (19) looks at new data revealing her future earning potential. Photo by Peter McIntosh.

New graduates are feeling the recession's pinch more than the rest of the population, a Ministry of Education report shows.

The report, which examined how much graduates earned depending on what subject they studied, showed in ''real terms'' the incomes of new graduates had declined between 2009 and 2012.

The median income of graduates one year after they finished study had gone from $39,701 in the 2009 and 2010 tax years to $37,959 in the 2011 and 2012 tax years.

In the same period, the median income of graduates five years after finishing study had increased slightly from $50,938 to $51,627 - which in ''real terms'' was a decline.

The report also showed a vast difference between the top and bottom-earning subjects, with health professionals taking up most of the top-earning subjects and artists forced to get by on the least.

The top earners - medical students - had a median income of $110,324 five years after graduating, compared with the bottom earners - performing arts students - with a median income of $37,229.

Tertiary Education Minister Steven Joyce said it was important to note the report was using 2012 statistics and the economy had picked up since then.

The figures were aimed at ''providing better data'' to help young people choose a career and about filling gaps in demand.

''A lot of people do go to university with the aim of getting a well-paid job afterwards,'' Mr Joyce said.

''It's not the only factor, but it's obviously a significant factor.''

Media, film and communications student India Leishman said it was concerning to hear incomes had decreased.

Learning that students who graduated from her subject had a median income of $33,535 was a ''bit scary''.

''Trying to live off that will be difficult,'' she said.

However, she did not regret her choice as she had wanted a career in broadcasting and media since she was young.

Fellow students Milena Janke (21) and William Taylor (24), who were studying for exams together at the university yesterday, both chose subjects they were passionate about rather than chasing the money.

Ms Janke, who is studying environmental management, said this was not the case for most of her friends.

Completely agree

I don't understand how this issue remains under the radar - you could come up with a few ideas such as people in positions of influence (media, politics) are older and removed/unaware of the plight of young people, but even then I don't get why it isn't further up the national agenda. It's like a large proportion of the population musn't care. Or maybe young people are so used to being trodden on they don't realise things could be different.

At least in places like Chile they protest the cost of education. Here I don't see any hope of things changing for a long time.

Will be less than that

The graduate earnings will be less than that. Take into account deductions for general tax, earners levies, KiwiSaver (if heaven forbid, you try and plan for the future) and the inescapable student loan repayments. 

That's if they are lucky enough to be in a graduate position that they trained for. More than likely they will be in general positions earning the same wage as non-graduates. In which case, loan repayments mean they will be earning less than the non-graduates. Suddenly, education has become a punishment.  

Even if you manage to make a contribution to a savings account with surplus earnings, student loan payments must still be made from any interest earned.   

With the exception of a few idealists, passion has absolutely nothing to do with it. The majority of students will select degrees based on interest and aptitude all because they believed the lie they were told in high school that it would lead to a better life and income. 

The current system is education for profit and is a bubble. It can't burst soon enough.