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Graduate salaries: what they don’t tell you
What's beneath the numbers in graduate salary packages? Here are four factors to consider when thinking about your graduate salary.
In a recent article, we listed the graduate careers that promise the highest starting salaries: dentistry tops the list, followed by medicine, engineering, teacher education, social work, health services, and law. Certainly, it’s encouraging to know, as, say, a law graduate, that your hard work will be rewarded with a generous and competitive salary.
However, as useful as it is to survey average salaries for first-year employees in graduate programs, one must also exercise a degree of caution. After all, a simple number on the page can conceal certain truths about the graduate experience that, once you’re in possession of them, may empower you to make a more informed choice about how to get the best return on the time, money, and effort you've invested in acquiring a competitive degree. So, with a view to laying bare all the relevant facts, this article will interrogate the available data to supplement what you’ve been told about graduate salaries with what they’d rather you didn’t know.
The gender pay gap refers to the ‘the difference between women’s and men’s earnings, expressed as a percentage of men’s earnings’. The good news is that, as of November 2018, the gender pay gap has sunk to its lowest point in 20 years. The not-so-good news is that the average national gender pay gap is still 14.6 per cent, which rises to 22.4 per cent if one considers only full-time salaries. In effect, this means that male full-time workers earn about $27,000 more per year than female workers in every industry and occupational category.
As a general rule, the gender pay gap widens as one’s seniority increases, rising to 28.9 per cent for Australians employed as key management personnel. However, evidence of the pay gap is clear even when one considers entry-level graduate positions.
For example, the 2017 Graduate Outcomes Survey (GOS), published by Quality Indicators for Learning and Teaching (QILT), identified consistent pay gaps across various professions. In 2017, the mean salary for male dentistry graduates was $94,600; for females, it was $75,100. Male architecture graduates earned a median salary of $60,000, while their female counterparts earned $52,200. In law, the gender pay gap saw male graduates earn a median salary of $63,000 and female graduates earn $58,000.
In short, though much is being done to address the gender pay gap in Australia, it continues to exert a strong influence on the respective earnings of men and women, even at the graduate level.
What you earn per year can distract from what you earn per hour
A degree in medicine is often considered to put you on a reliable path to taking home a considerable paycheck, even as a graduate—and, on the face of it, this appears to be true. For example, in 2017 new entrants to the medical profession had the second-highest graduate salaries in Australia (with an overall mean salary of $70,300).
However, there’s a catch: medical interns also work more hours per week (a mean of 46.5) than graduates in any other industry, which makes their hourly rate lower than graduates in dentistry, engineering, education, and mathematics. This difference is only more pronounced for the many medical interns who find themselves working as many as 70 hours per week, at which point their hourly earnings drop below graduates in most other industries.
Of course, it’s not only medicine graduates who can get caught in the difference between salaries and hourly wages. Law graduates who routinely stay back to finish cases, engineers who clock overtime while doing site work, nurses who cover shifts: all are liable to find that, at the hourly level, their time is being ‘sold’ for much less than they realise.
The trick then is to be savvy: before you’re won over by a lucrative salary, make sure you know exactly how much work you’ll need to do in order to earn it, and then make a decision about whether or not it’s really enough. Pro tip: use this nifty tool to convert your salary to an hourly wage.
Graduate salaries are declining relative to overall average pay in most industries
As we have seen, determining a benchmark salary in any industry is complicated by the fact that the benchmark still shifts depending on an individual employee’s gender. To get around this, statisticians use male average weekly earnings (MAWE) as the standard benchmark for comparisons because it’s typically higher and represents the presumptive overall average if complete gender pay equity is achieved.
Unfortunately, a historical review reveals that, relative to MAWE, of graduate starting salaries (GSS) have steadily declined over time. This indicates that overall salary growth has benefited experienced employees more than it’s benefited graduates, whose salaries are more in keeping with a national trend towards sluggish wage growth.
Additional training is often required before salaries really take off
Architecture graduates know that they can’t call themselves architects until they finish their masters. Medical graduates know that they’re not ‘really’ doctors until they complete their internship, then their residency, and then their specialist training. Law graduates know that, even after obtaining their degrees, they must complete additional study at the College of Law before gaining formal admission as lawyers.
In short, across various industries, additional study or practical training is often required before one receives the professional accreditations necessary to ‘unlock’ competitive salaries. Hence, according to the 2018–2019 Hays Salary Guide, there is often an early salary bump for graduates who enter their second and third years as full-time professionals (this also, of course, reflects increasing experience). For example, the average salary for a full-time graduate lawyer at a top-tier firm in Sydney is $59,000. This jumps to $64,000 following admission. Similarly, the average salary for a graduate mining engineer in Western Australia is $90,000. This grows to $122,500 following the receipt of professional certifications.
Figuring out what counts (and what doesn’t)
Having read this article, you’re now more familiar with the various factors that can affect graduate salaries, and should also have a clearer picture of what you can expect to earn both as an hourly rate and as a proportion of overall industry averages. However, it’s understandable if you still find the data to be abstract and unhelpful as a guide to your next career move.
In a way, this is as it should be because your salary isn’t everything. Yes, it’s important, and you should take it into consideration: but, if you’re still uncertain, it can be useful to turn to other sources of information. For example, what do graduates currently receiving the salary you hope to earn for yourself say about their lived professional experience? Do they feel that it’s worth it?
To find out, you can turn to the GradAustralia website: simply search for your target employer, navigate to the reviews section, and then use the right-hand column to learn what current graduate employees are saying about their salaries. Are they happy with how much they’re earning for the work they do? Pay close attention to their answers: they will tell you far more than any mere number ever can.