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Does a university degree have much value in today’s gig economy?
The UK government projects job growth, but non-graduates do not fare as well in today’s modern and flexible economy.
As the British economy shakes off the great recession and has continued to be subject to an age of austerity, the good news is that, according to UK Commission for Employment and Skills (UKCES), there continues to be projected growth in jobs over the foreseeable future. This is especially true in the construction, business, business services, trade, accommodation and transportation sectors. (Gov.uk, 2017) This is the headline news, but the details tell a much more complicated story.
Not all jobs are created equally
As one can expect, job growth is not equal amongst sectors, or between education levels. The UKCES predicts that within England between 2014 and 2019 job growth in professional services will increase by 15% for university graduates, but will stagnate at 0% for the non-graduate workforce. According to these statistics, the non-graduate work force will actually shrink -3% in the media-related sector and up to -9% in the financial sector. At the same time, the job market for the degree holding workforce will increase by 4% in the media sector and increase by 1% in the financial services sector. (Gov.uk, 2017)
While a graduate can’t be guaranteed a job, the statistics indicate that having a university degree will improve employment prospects. The report states, “The demand for skills, as measured by the numbers employed in higher level occupations, and the numbers employed holding higher level qualifications, is also projected to rise.” (Gov.uk, 2017)
The rise of the gig economy
This decline in non-graduate degree jobs seems surprising because we are also seeing a dramatic rise in what is called the “gig economy”, which encompasses a flexible workforce that are contracted on short-term or freelance agreements. According to the think tank the New Economics Foundation, London’s gig economy grew by 72% between 2010 and 2016. And that’s just in London, imagine the growth across the UK. Many of these newly created jobs are non-graduate level jobs such as Parcelforce and Uber drivers, couriers for DPD and Deliveroo delivery personnel.
There seems to be an explosion in the gig economy, but it isn’t reflected in the government reports on the future of jobs and skills. Are these jobs falling through the cracks of official employment statistics? Perhaps the decline in non-graduate jobs isn’t as pronounced as the statistics reveal and, as the numbers suggest, maybe more are moving to the gig economy?
But there is controversy about this modern and flexible economy and it seems that the non-graduates are bearing the brunt of it. According to a recent report by former work and pensions committee chair, Frank Field MP, these workers are being exploited through punitive contracts and “poverty pay”. He sites the example of employment practices at Parcelforce, DPD and British Car Auctions (the owner of webuyanycar.com) where drivers are ending up earning as little as £2.22 an hour. The jobs highlighted in Field’s report are all school-leaver level work.
A graduate degree may offer some protection
Investing in a graduate degree may offer a safeguard from the erosion in both contract and wage protection that is unfolding in the gig economy. It’s a bold statement to make and it certainly is no guarantee, but university graduates tend to secure higher-level jobs than school-leavers. According to the Institute of Fiscal Studies, the wage gap between graduates and non-graduates has averaged about 35% for the last two decades.
Yet why do these discrepancies exist and, more importantly, what is exacerbating these workforce trends? Exponential technological innovation and relentless digital disruption means the demands on the workforce continue to stretch, morph and evolve. The gig economy is a reality of the modern world and will not disappear any time soon. Therefore, a workforce equipped with problem solving, creative thinking and empathy skills will withstand the uncertainty and volatility that the job sector predicts in the foreseeable future.
Bucks New University’s Business and Management Top-up degree is designed to enhance career progression in a world of uncertainty, volatility and ambiguity. It’s designed to upgrade a foundation degree in business to a Bachelor of Arts (Hons) in Business and Management from Bucks New University. It is taught at both Uxbridge and High Wycombe campuses as a part-time evening course. For more information, visit https://bucks.ac.uk/courses/undergraduate/management-and-professional-studies/pt/business-management-top-up-pt-1720.
The article’s author, Greta Paa-Kerner is a Principal Lecturer at Bucks New University. With over 20 years of practitioner experience, she now develops course content and lecturers on business and marketing programmes at the university. She is actively involved in industry both as a guest lecturer and as a content contributor.