On Sunday evening the ABC had a news item about Trade Apprentices and the benefits of trade training. The story featured Paul Naylor CEO MPA Group and was largely shot in the Master Plumbers College of Excellence. Please follow the link to see the story.
Proposed university fee rise causes rethink in value of learning a trade
Researchers suggest learning a trade might be a better investment than university if the cost of obtaining a degree increases under the Federal Government's plan to deregulate university fees.
Damian Oliver, who is a leading research analyst in the Workplace Research Centre at the University of Sydney's Business School, believes students are questioning whether it is worth all the money.
"I think there's a real case to be made for increasing the information that's made available to potential students about the value of certain qualifications and the state of the labour market," he said.
With a shrinking number of stable full-time jobs, Dr Oliver said this generation of school leavers should be asking themselves whether a university education is cost-effective and whether a vocational qualification, such as a trade, might be a better investment.
"I think that it's a real potential advantage at having a vocational qualification rather than a university qualification at the moment," he said.
"They're often cheaper and lead to much stronger and more reliable labour market outcomes."
Adding up the cost of a degree
A team of mathematicians from the Australian National University has come up with a online calculator that estimates the cost of a university degree post-deregulation.
According to their modelling, a three-year arts degree will leave graduates with a debt of $51,472 once interest is added and take 18 years to pay off.
A four-year law degree would cost $119,783 including interest and take 30 years to pay off.
Then there is the challenge of finding a job.
One in four graduates are still looking for work four months after graduating.
By contrast, second-year apprentice plumber Zach Reznik already has a full-time job in his chosen field.
He earns the award wage of $28,000 a year while he learns his trade but he can expect that to more than double once he completes his four-year training.
"You've got to stick through the apprenticeship which is not as much pay as a tradesman but once you get to the end of it, you get rewarded," Mr Reznik said.
Paul Naylor from the Master Plumbers Association of NSW said those rewards can be significant.
"We hear about young lawyers going to work in law firms in the city and earning $50,000 a year as a first year graduate," he said.
"A young plumber who has finished his four years and has gone to work for an employer and he's really a good plumber, if he can't earn $1,200 to $1,500 a week, he shouldn't be there."
That translates to more than $70,000 a year, easily beating the median starting salary for graduates of $52,000.
Previous research has estimated that over the course of a lifetime, graduates will earn 40 per cent more than non-graduates.
But that does not factor in the cost of paying back larger university debts and potentially lengthy periods of unemployment facing today's graduates.
Is learning a trade an attractive option for school leavers?
"For a long time we've suffered a problem where trades are perceived to be something where those who don't do well at school go to and that should change," Paul Naylor said.
Change is already coming, if you ask Naomi Dinnen, executive officer of the Group Training Association of NSW.
"Trades are now quite competitive as more and more people realise university's going to leave them with a debt and this is a great way of getting a qualification and being able to travel and earn good money," she said.
"I think we're seeing that university isn't the be all and end all and it's not the same when we were young when you could just go to university and not end up with a debt.
"It didn't really matter if you dropped in and out, now if you drop out, you're still going to have the debt and you're not necessarily going to have a qualification."
The vocational sector is in the midst of a major reorganisation but even with fee rises, compared with a university education, the cost will remain competitive.
For example, the NSW Education Office estimates that next year an apprenticeship plumber will pay $2,000 for a three-year training course.
An unemployed person receiving Newstart payments who embarks on a Certificate III in Aged Care will pay $240 for their qualification.
The downside to vocational training is that there are now more people wanting training than available places.
The number of apprenticeships and traineeships fell 13 per cent in 2013 due to government cuts and company belt-tightening.