Opinion & Commentary
A degree of dissatisfaction
The annual offers for university places bring joy for many but disappointment for others, whose applications find no takers.
Many politicians take these rejections as solid evidence that the Federal Government should be providing more places.
The strongest case for expanding the university system comes from Queensland federal Labor MP Craig Emerson and prominent Monash University academic Bob Birrell.
Their statistics show that the jobs graduates typically seek -- those classified as professional, associate professional and managerial by the Australian Bureau of Statistics -- are increasing more quickly than overall employment growth. By contrast, annual university commencements were only slightly higher in 2005 than they were in 1996.
But does it follow that we need more university places? A closer examination of the Bureau of Statistics' employment figures gives cause for doubt.
In practice, only jobs classed as "professional" are at present mainly occupied by graduates. This is because for many of them people without qualifications in appropriate fields are prohibited by law from being admitted to practise.
You don't get to be a doctor without studying medicine first, or work as an engineer without an engineering degree. Overall, 70 per cent of professionals have a degree.
Though many management degrees are on offer at Australian universities, managers are not legally required to possess one. The skill level required to be a manager is classed as being equivalent to, rather than actually holding, a degree. Through experience, imitation and non-university study many people learn to be good managers without having a management degree.
The skill level required to be an "associate professional" is a diploma rather than a degree, and only two in 10 such workers actually have a degree.
So any plan to increase university enrolments cannot just calculate net job growth in these occupations and conclude that this tells us how many graduates we need. In reality, graduates will compete with non-graduates for those positions.
Past graduates have enjoyed only partial success in this competition. A significant minority of graduates in the workforce, about 20 per cent in most years, do not hold professional, associate professional or managerial jobs.
Most of the around half million people in this situation hold clerical, sales or service jobs, while some others work as labourers or are unemployed. Consistent with the labour force data, a survey found one in five bachelor-degree holders believed that they did not use their abilities or qualifications in their workplace.
We don't know exactly how serious a problem these over-qualified workers represent. As over-qualification is more common among graduates in their 20s than in their 30s, it is a temporary situation for some. It will be a matter of choice for others, who took a university degree out of interest only, or who prefer less-demanding employment. But others will be bored by jobs that cannot utilise their university-acquired knowledge and skills.
On these figures, there is little reason for expanding higher education enrolment overall. But, as Birrell in particular has diligently pointed out over many years, Australia does have shortages of particular types of graduates. These are chronic in the health professions, despite extensive international recruitment, and have become more serious in engineering as the mining industry has boomed.
Though the resources boom's scale was hard to predict, population ageing plus the feminisation of university enrolments (women are much more likely to be out of the labour force or working part-time than men) meant it ought to have been obvious that historic enrolment numbers in health-related courses were inadequate. Yet the proportion of university completions in these courses actually declined slightly between 1995 and 2004.
Enrolments of HECS students are controlled from Canberra, so this represents a major policy failure. It's clear from the historical evidence that a market-based higher education system, which has been proposed several times in the past, would have produced better results.
We know from the annual surveys of unmet demand for university places that thousands of applicants for health-related courses miss out every year. So we had the potential students. And we know from the way universities offered full-fee places, particularly to overseas students, that they were capable of creating extra places.
No system can deal fully with hard-to-predict skills shortages. But our current system cannot even deal with the skills shortages that were obviously on the way. Giving greater room for markets to work, without Canberra's bureaucracy standing in the way of demand and supply meeting, ought to be a top policy priority.
Andrew Norton's paper "Mismatch: Australia's Graduates and the Job Market" is published by The Centre for Independent Studies, www.cis.org.au
