Worst Graduate Jobs Market on Record: “This Is Exactly What Labour Were Warned About”

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Vacancies for university leavers collapse by 45 per cent to the lowest level ever recorded, even as a record wave of school-leavers heads off to rack up debt for degrees that may lead nowhere.

“This is precisely what Labour was warned about,” says Andrew Griffith, the shadow business secretary, as figures revealed that Britain’s graduates now face the worst jobs market since records began, and that this year’s crop of leavers is “paying the price” for the government’s own decisions.

He is not wrong. Behind the blunt verdict lies a set of figures so bleak they ought to be causing alarm in Downing Street: just 8,383 graduate roles were advertised in July, a collapse of 45 per cent on the same month last year, and, remarkably, the lowest total since comparable records began in 2016. From a peak of more than 55,000 graduate vacancies in 2017, postings have now cratered by a staggering 85 per cent, a decline that has accelerated sharply on Sir Keir Starmer’s and now Andy Burnham’s watch.

The timing could scarcely be crueller. This same month, a record 262,820 eighteen-year-olds secured university places on the back of their A-level results, cheering their way into an education system that is about to funnel them, three or four years from now, into a jobs market with almost nothing waiting for them.

And the warnings Griffith refers to were not vague or hypothetical. Employers, squeezed by Rachel Reeves’ twin increases to National Insurance contributions and the minimum wage, have simply stopped taking a chance on inexperienced staff, because Labour has made the cost of doing so far harder to justify. Even the Bank of England’s own chief economist, Huw Pill, has broken with convention to tell MPs that the tax rise had a “particular effect on young people,” a striking admission from an official who is not in the business of scoring political points.

Large firms, including the Big Four accountancy houses, are compounding the damage by turning to artificial intelligence to handle the paperwork once given to junior staff, further narrowing the path into professional careers just as Labour’s tax rises make that path more expensive to walk.

The human cost is already visible. More than 16 per cent of 16 to 24-year-olds are now out of work and looking, and over a million young people fall into the bleak “Neet” category, meaning they are not in employment, education, or training. A review led by former Labour minister Alan Milburn found that, remarkably, one in seven of these young people already holds a university degree, a stark illustration of how little a degree now guarantees.

Graduate pay offers little comfort either. The average advertised salary of £25,813 works out at roughly what a full-time worker earns on the minimum wage of £12.71 an hour, meaning years of study and, increasingly, tens of thousands of pounds in tuition debt, now buy little more than a minimum-wage income.

Griffith’s charge is straightforward: Labour was told, in unambiguous terms, that piling hundreds of pages of new employment red tape on top of a National Insurance rise would hit hiring hardest at the bottom, among the young and the inexperienced, and that is exactly what has happened.

Andy Burnham, under mounting pressure from rising unemployment and a swelling benefits bill, has offered little beyond warm words about apprenticeships and technical routes into work, insisting last month that Britain must “value the hard hat every bit as much as the graduation cap.” It is a slogan that will offer cold comfort to the hundreds of thousands of students now embarking on degrees, encouraged for years by government policy to do so, only to discover that the jobs they were promised have simply stopped existing.

The wider labour market tells a similarly grim story. Overall vacancies fell to 791,490 in July, the first drop in five months, while the number of jobseekers competing for each vacancy climbed to 2.14, up from 1.93 a year earlier. Healthcare, nursing, logistics, warehousing, and hospitality have all seen hiring pull back sharply under the weight of higher taxes, even as wage growth continues to cool from its peak.

A government spokesman insisted ministers were “determined to go further to restore opportunity for young people” through a £2.5 billion youth employment package, and pointed to further reforms expected to follow the Milburn Review. Chancellor John Healey will face pressure to go considerably further than that when he delivers his first Budget in October, with graduates, employers, and Labour’s own backbenchers all waiting to see whether he can undo the damage his predecessor’s tax rises have done.

Image: For illustration purposes.