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For newly minted grads, higher pay but possibly fewer jobs: StatsCan

Have a university degree? In the long run you will likely be better off. In the short run, you may have to settle for working at a coffeeshop. Getty Images

It’s well known that more time spent in school tends to pay off with jobs that come with fatter paycheques. But are Canada’s university graduates having a rougher time than their peers with less education in getting their foot through the door?

That’s the question raised by a recent Statistics Canada study. Based on data that the agency only started collecting in 2015, the research dissects 2016 private-sector job vacancies that required no prior experience, a.k.a. entry-level jobs.

READ MORE: Here are the jobs with the highest — and lowest — wage growth in Canada

Unsurprisingly, the report finds that higher levels of education tend to command higher pay. The average entry-level hourly wage offered by employers looking for candidates with a university degree was $29.30. This compared with $18.20 for gigs requiring a college diploma or apprenticeship training; $14.00 in occupations that required a high school diploma; and $12.70 for jobs that required no education.

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Even within the same sector, entry-level jobs requiring more education paid significantly better. In the field of applied and natural sciences, for example, your first job will likely pay an average of $28.90 per hour if you have a university education and $19.90 an hour if you have a college education.

WATCH: In which sectors is your salary most likely to stay ahead of inflation?

Click to play video: 'Industries in Canada where wages have grown the fastest and slowest' Industries in Canada where wages have grown the fastest and slowest
Industries in Canada where wages have grown the fastest and slowest – Nov 10, 2017

But when it comes to the number of available entry-level jobs, more educated Canadians may be facing worse odds.

“Entry-level positions are largely concentrated in jobs where employers require little or no minimum level of education,” writes author Marie Drolet, senior analyst with the Labour Statistics Division at StatsCan.

In 2016, around one in two entry-level jobs did not require a minimum level of education (87,500 vacancies). A quarter of those gigs (48,400 vacancies) required a high school diploma and one in five (18,300 vacancies) required a college diploma. Only 14,000 entry-level jobs required a university degree.

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For comparison, over 250,000 Canadians graduated from university in 2010.

The survey on which the study is based only captures private-sector jobs, vacancies where work must start within 30 days and positions for which employers aren’t recruiting internally. Many highly skilled Canadians flock to the public sector, and it is possible that many entry-level jobs for university graduates involve longer start-date windows and internal recruitment (with employers, for example, hiring on a select number of interns).

Still, “the demand for entry-level jobs that require a university degree falls short of meeting the available supply of eligible workers,” writes Drolet. “As a result, recent university graduates may be required to accept jobs for which they are overqualified, leading to lower earnings and lower productivity.”

READ MORE: Here are the provinces with the highest and lowest disposable income growth, according to StatsCan

But if university graduates are facing a rougher start in the job market, they are likely in for smoother sailing than less educated Canadians once they do get their foot in the door.

“As the experience required to do the job increases, so too does the educational requirement,” noted Drolet.

In 2016, 40 per cent of job vacancies that required more than two years of experience also required a university degree, while another 20 per cent required a college diploma. Research has also shown that Canadians aged 25 to 34 with a bachelor’s degree are more likely to be employed on a full-time, full-year basis.

By comparison, nearly half of entry-level jobs posted last year were part-time.

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