Graduates' starting salaries will fail to rise this year for the first time in three recessions and more than three decades, according to an authoritative survey that underscores the drastic effect that the downturn has had on Britain's labour market. For the graduating class of 2009, earnings will be no higher than they were for the class of 2008 across a range of sectors, including investment banking, retail and the public sector. At law firms, many of which have been hit by the travails of their City clients, they are even set to fall slightly.
The freeze in starting salaries at £25,000, revealed today by the Association of Graduate Recruiters, is a far cry from the heady days of 2005, when employers ramped up earnings for new graduate trainees by 7 per cent. It is the first time that earnings have not risen since the AGR's survey began in 1977.
The stagnation in graduates' first pay packets follows a series of company-wide wage freezes hitting staff of all ages, which have helped to push the headline rate of earnings growth across the economy down to the lowest since records began in 1997.