A new report from Incomes Data Services (IDS) shows the average starting salaries for graduate positions this year could reach their lowest in real terms since 2003.
Although the typical pay rate for graduate roles is frozen at £25,000 for this year, an adjustment to account for high inflation means a 2 per cent pay cut, down from £19,020 in 2011 to £18,705 this year, the IDS found.
According to the research, graduate starting salaries peaked at just over £20,600 three years ago but have since dropped to their lowest in nine years. In 2003 the figure stood at £18,524.
Despite a large number of employers looking to recruit more university leavers compared to last year, 90% intend to freeze graduate pay rates for 2012, the study based on figures from over a hundred graduate employers revealed.
Head researcher at IDS, Nasreen Rahman, explained the trend, stating: "Even though the demand for graduate recruits is showing signs of revival, the competition for places means that employers are under little pressure to increase current rates despite high inflation."
"It remains a buyer's market for graduate recruiters this year, with starting salaries set to stagnate for a further year. High rates of price inflation over the last few years have been eating away at the purchasing power of starting salaries for new graduates," Ms Rahman added.
This may seem rather gloomy, and in a way it certainly is. Effectively the period of less bang for your working buck is set to continue - and potentially worsen - for at least the next year. However, as a graduate, stumbling into an industry for the first time, is your salary the bottom line? For many the answer is a disgruntled, but emphatic, no.
Sure, we'd all love to roll out and earn fistfuls of cash straight away, but this is a privilege closest achieved by the lawyer and banker types (who are expected to receive the highest starting wage amongst all graduate positions, earning a predicted £36,000 and £31,250, respectively). For the rest of us - indeed everyone to some extent or another - the first year(s) of employment will be an investment, with the real benefits accrued later.
Ultimately, then, displeasing as any news of reduced earnings might be, those lucky enough to secure work will hopefully see the positives and acknowledge the sacrifice of a few shopping/pub runs here or there - for a while at least.
Jordan, GRB Journalist
