What constitutes graduate employability is discursively framed. In this paper we argue that whilst universities in the UK have long had an involvement in producing useful and productive citizens, the ongoing neoliberalisation of higher education has engendered a discursive shift in definitions of employability. Traditionally, universities regarded graduate employment as an aspect of institutions' relationship with the labour market, and one where they enjoyed a significant degree of discretion. Now, employability is a performative function of universities, shaped and directed by the state, which is seeking to supplant labour markets. We argue that this has three profound implications. First, state intervention in labour markets adjusts power balances in favour of employers. Second, contrary to the legitimising rationale of enhancing social justice, pursuit of employability agendas may well be creating two tiers of universities--those that produce docile employees and those that produce employers/leaders. And third, employability discourses may be adversely affecting pedagogies and curricula, to the disbenefit of students, institutions, employers, social justice and civil society. (Contains 2 notes.)