Interview: Battle Stations
Unions: The Workers, United
Politics: The Lost Weekend
Industrial: Truth or Dare
History: A Class Act
Economics: The Numbers Game
International: Blonde Ambition
Training: The Trade Off
Review: Bore of the Worlds
Poetry: The Beaters Medley
The Locker Room
After the Action
Power and the Passion
Mao and Then
The Third Way Hits A Dead End
Unfair For All
What Is To Be Done?
Black Hawk Up
The Trade Off
There is a dirty little secret behind Australia's current skills crisis. When it comes to our long-term economic prosperity, the market is failing us.
As labour market economists scratch their heads looking for an answer to this structural defect, they are refusing to admit the underlying problem - their own doctrine which breaks economic activity into unrelated, discrete units.
In this world there are no causes and effects, no flow-on effects, no long-term investments, just a balance sheet.
The shortage in building industry apprentices is a classic example of this type of thinking; a shortage that anyone who has tried building or renovating a home in recent years can attest to.
Building apprentices are in decline - over the past 15 years the number of building apprentices has dropped by nearly ten per cent - at a time when industry activity has more than doubled.
The reasons behind the shortages are, of course, complex but there are two culprits that stand out from the pack.
First, the value of young apprentices is measured only in the short term; and this leaves apprentice wages at such a level that very few people are attracted to the trades.
With more and more builders working on low margins in a cut-throat tender market - and many companies rising and falling on the strength of a single project - the criteria for economic success is, by definition, short term.
Now the construction industry - which in reality is a gaggle of project managers, principal and sub-contractors are actually punished by the market for any fat on their balance sheets. And that includes the young workers who are new to the tools.
And the days are gone when Governments corrected the market dysfunctions - that is the Dept of Public Works, the Railways, the MSB trained quality apprentices.
From the other end of the equation, wages for apprentices have not kept pace with developments in the industry - or with other industries - meaning they have fallen below a level that will actually attract young people.
Traditionally, apprentices had a wage based on the presumption that a first-year apprentice had left school at year 10, was living at home and had no extra commitments. These days, HSC level mathematics is a general requirement; while some 18 and 19 year olds who are entering the building industry already have family responsibilities.
To put these wages into perspective, a first year apprentice carpenter receives $5.80 per hour; more than $2.00 per hour less than apprentices in other industries such as chefs, postal workers or retail workers
In the context of the building industry, a general site hand - with no recognised skills - is a paid a minimum of $15.00 per hour - nearly three times the apprentice wage.
And in comparison with the ubiquitous burger-flipper? A Full-time 18 year old working at McDonalds can expect to earn around $9.00 per hour, while a casual would take home about $11.00 an hour.
At these wages, it is not the low apprentice numbers that are surprising; it is the fact that anyone at all chooses to commit to a trade. Of those who do, with the best intentions, an alarming number drop out in their first year, squeezed by the low wages, long hours, night study and arduous nature of the work.
These are the reasons the CFMEU is currently seeking an average increase of $2.20 per hour for apprentices in the AIRC, not as a simple wage rise, but as part of a broad solution to the skills crisis that affects every Australian homeowner.
Gimmicks from the Federal Government, including $800 tool kits, special non-union technical colleges and overseas apprentices, will do nothing unless the underlying issues are addressed.
Our argument is that if we are serious about resolving this skills crisis, we need to make the trade, if not lucrative, then at least a viable option to smart young people.
Not surprisingly, the building employers are resisting the modest increases, claiming that an industry that delivers multi-million profits can't bear a small upward movement in wages.
These are the same industry leaders moaning about the skills shortage; a short-sighted view that sees everyone responsible for their problems but themselves. Then again, maybe they should try a career as economists.
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