Graduate pay falls to 10-year low after crash
THE average salary for a new graduate has fallen to a 10-year low, new research suggests.
Salary increases during the boom years of 2004 to 2007 were effectively wiped out during the recession, according to a Central Bank study.
Pay for college leavers was just under €23,777 a year on average in 2012 – a slump of 11.7pc compared to the peak in 2007.
Arts and architecture graduates have experienced the sharpest falls, while commerce, veterinary and engineering have had the smallest.
The Central Bank said its research suggests a "significant decline" in average starting wages for new graduates.
"With the majority of new jobs in the economy being filled by those with third-level qualifications, this suggests that the fall in graduate salaries could impact overall economy-wide pay trends in the coming years," the Central Bank study said.
Starting salaries for college leavers increased by 11.8pc between 2004 and 2007 to €26,919 on average. Economic growth of more than 5pc and full employment during that period pushed wages up.
But after 2007, starting salaries across all graduate areas fell steadily to an average of €23,777 in 2012. That decline brought overall salary levels back to below 2004 levels.
About two-thirds of college leavers earned more than €24,999 by 2007 compared to 45pc in 2004.
"While aggregate data and some previous research suggests only marginal reductions in overall earnings during the recession, the results presented here provide evidence of significant downward adjustment in nominal pay for graduates," the study said.
"The decline in graduate salaries is likely to be exerting downward pressure on aggregate wages in the economy."
Starting salaries for graduates with an arts degree fell 19.1pc to €19,748 in 2012.
Business graduates were getting pay of €23,860 on average, a drop of just 5pc on the 2007 peak figure.