This paper examines the issue of the responsibility of higher education institutions (HEIs) for and response to rising unemployment rates and economic decline within Australian society. It presents an analysis of the salary and employment status of college graduates over time, revealing that types of graduates with initially high levels of unemployment do eventually get absorbed into the workforce. Additionally, the paper examines reports from various countries in the Organization for Economic Cooperation Development on the relation of unemployment to graduates of the humanities and social sciences - the implication being that problems of employment were greatest for such graduates. Other topics discussed include: (1) changes in student distribution and enrollment in various fields of study and the responsibility of HEIs to respond to changes in educational demand; (2) the nature of technology and its relation to higher education and employment; (3) the issue of HEIs' ability to predict employers' demands for a great range of changing skills and to supply that demand with qualified graduates; and (4) HEIs' role in displacing labor through its research and development contributions to technological change. (GLR)