In my experience and for everyone I knew that had a PSW, it was less about *wanting* to not work or take low wage jobs and more about having no other option. I was unemployed for a year and a half, aside from the seasonal temp job I managed to get at HMV for 2 months. It was not "just a way to stay" for anyone I knew and I found the government's stance to be pretty misguided, which is not unusual for them.
Yes, you're right. I was going to go back and edit my post to include this as well, but I didn't have time this morning before work.
It wasn't just a case of people trying to use the PSW just to stay in the UK, but also that a lot of the foreign graduates couldn't find graduate level jobs and so had to take what they could get.
I remember a news story coming out a couple of years ago where they were like: 'X percent of Tier 1 PSW holders are not working in graduate level jobs'. It was spun as though they were taking the lower wage jobs away from the UK population and therefore ruining their chances of getting work, but in reality, for a lot of the visa holders it wasn't a choice to work in those jobs.
I was looking for graduate jobs at the same time as many of those on or switching to Tier 1 PSW visas and although I'm a UK citizen and have qualifications in a so-called 'shortage occupation', there were just no jobs at all - it took me 2 years of job hunting to secure a position, and in the meantime I had to work in retail, earning just above minimum wage, to support myself.