In the upcoming budget, Chancellor Rachel Reeves is expected to raise the minimum wage to £12.70 an hour: £26,416 annually for a full-time job. This means that the gap between salaries for minimum wage jobs and those for professional jobs that require a degree is shrinking fast.

Some smaller law firms are already paying newly qualified solicitors barely more than minimum wage. “Why would young people take on £45,000 of student debt if they can earn the same stacking shelves?” one executive told the Financial Times.

The concern from business leaders is understandable, but it’s focused on the wrong problem. This isn’t a story about university losing its value. It’s a story about Britain becoming a lower wage economy.

Based on all available evidence, university remains a sound long-term investment. The raw undergraduate earnings premium – the simple difference between graduate and non-graduate median salaries – stands at £11,500 per annum.

Earnings by education level:

Earnings typically accelerate as graduates progress through their careers and gain labour market experience. The lifetime earnings premium – the additional amount graduates earn over their working lives compared to non-graduates – remains substantial.

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