Uni v TAFE:
Thanks to an education system that favours university qualifications, plus pressure from their baby boomer parents, school leavers increasingly shun trades. Only one in five baby boomers (born between the late 1940s and early 1960s) have a university degree but four in five parents prefer their children go to university rather than undertake a vocational education training (VET) pathway, such as a TAFE course, into a trade.
According to the Bureau of Statistics, the number of people who hold a qualification above a bachelor degree has more than tripled in the past 30 years. In 2016, two in five tertiary students were enrolled in a bachelor degree compared with just one in five enrolled in a certificate III or IV course at TAFE .
While our education system is geared toward the attainment of university degrees, social researcher Mark McCrindle, principal of McCrindle Research, maintains that the VET sector is a foundational rung on the ladder of Australia’s future economic prosperity.
In collaboration with the Skilling Australia Foundation, McCrindle has released a ground-breaking report, Vocational Education and Training: Myths, Realities and the Future of Skills in Australia, which maintains that vocational training graduates get a job more easily and can be paid more than those with university degrees.
Myths and misperceptions
“The core of the myths and false perceptions surrounding VET simply do not stack up against the facts,” says McCrindle in his report. “Compared with university, VET is often considered the poor second cousin, seemingly receiving less positive attention in the media, among career counsellors and, significantly, with parents.”
McCrindle shows the median full-time income for a VET graduate is $56,000, whereas the median salary for a bachelor degree graduate is $54,000. He says VET graduates also have the capacity to earn comparable salaries to bachelor’s degree graduates: the highest average starting salary for a VET qualification is $85,400 (for Certificate IV in Hazardous Areas – Electrical), which is not far behind the highest starting salary for a bachelor-level degree, $90,000 for a GP (See table 2).
This is despite the fact a university degree costs a lot more than a TAFE qualification. Moreover, university fees are set to increase after changes announced in the federal government’s May 9 budget. The cost of getting a degree will rise by 7.5% over the next four years, and the threshold for paying back a HECS-HELP debt will fall from $55,000 to $42,000 on July 1, 2018.
Australia is experiencing a trade skills shortage. According to the latest data from job finder Seek, new job ads for the trades and services sector were up 19% compared
If we don’t get people ready for employment they get left behind”
with the same period last year. Despite the opportunities these job vacancies present, there has been a 51% drop in TAFE enrolments in NSW in the first six months of this year.
The enrolment slump has been blamed on competition from universities offering “sub-bachelor” level diplomas, changes to government funding, increased TAFE fees and, not least of all, social attitudes towards the VET sector. But Peter Mansfield, national manager of the Career Development Association of Australia, says parents and educational professionals need to take a closer look at the VET sector. “TAFE is focused on vocational skills which will provide work and fulfilment for many people. If we don’t get people employment-ready they get left behind and that can come at a great cost,” he says. “Over the past 10 years, the pendulum has swung away from trades, with most parents now wanting their child to get a degree.”
Mansfield says the situation has the potential to lead to kids enrolling in university, where they might not succeed, while they miss out on rewarding vocations that often have similar earning potential.
This is a scenario that fourth-year electrical apprentice James Smyth identifies with. When he left school in 2008, he headed directly to university to study chemistry. He wasn’t even sure what he would do with a chemistry degree, and for the next 2½ years he dropped in and out, all the while racking up a $20,000 HECS debt.
By 2011, Smyth finally figured out university wasn’t for him. “I wanted to be hands-on and I felt claustrophobic in an office or a classroom,” he says.
He will have a certificate III in electrotechnology electrician when he finishes his apprenticeship this year, and it cost around $5000 a year in fees. Now 27,
he hopes to earn around $75,000 a year. He says he wished he had known more about trades when he first left school and that the career advice at his school was “pretty useless”.
A trade isn’t for everyone
Kaitlyn Brown had the opposite experience to Smyth. She enrolled in a bachelor of arts (teaching) degree when she left school but dropped out after four weeks. “I did one assignment and realised I just wasn’t ready to commit,” she says. Over the next three years she worked as a dance teacher, a cocktail waitress at a casino, a helper at a preschool and in sales for a telecommunications company.
By the age of 21, Brown realised she did have a passion for teaching and went back to studying full time. graduating as a secondary English/drama teacher in 2016 with a HECS debt of just under $50,000. Her earning potential will be $65,000 a year when she is fully accredited, which is $10,000 less than what tradie Smyth expects.
Although Brown says she could have earned the same amount working in alternative employment, she loves teaching, and another incentive is that she has the opportunity to one day earn $150,000 if she makes it to the level of government school principal.
Same goal, different pathways
Teaching is one career where a university degree is essential. But there are plenty of jobs that can be done with either a TAFE qualification or university degree. Take accounting, for instance. The average cost of a certificate IV in accounting at TAFE is $3949. Meanwhile, the cost of a three-year full-time bachelor of commerce with a major in accounting at my alma mater, Sydney’s Macquarie University, is $31,788 .
According to the Robert Half 2017 Salary Guide, a finance graduate can look forward to an entry-level job as an assistant accountant with a salary between $55,000 and $70,000 – and, at the very top of the tree, upwards of $ 450,000 as a chief financial officer at a large company. For what it’s worth, I have a mate who has an accounting certificate from TAFE and is now a very successful investment banker. I’m confident he’s earning significantly more than $450,000, and he’s never forked out for a HECS-HELP debt in his professional life.
TAFE graduates get the jobs
Jenine Smith, secretary of the Careers Advisers Association of NSW & ACT, says the focus of any decision-making about tertiary study should first be on the student’s skills and interests, as that will help them identify a course of study best suited to lead to a job they will find interesting.
“Current research is finding that some university graduates are finding it hard to gain employment after graduation, while TAFE graduates are often gaining employment before they complete their course of study,” she told Money.
“In terms of earning potential, if you are good at what you do and enjoy your job, then you are more likely to be successful in the industry.” Smith cited studies that found a university qualification isn’t necessarily a guarantee for getting into one of the higher-paying occupations. “TAFE qualifications can also lead to financially rewarding occupations in the trades, information technology industry or real estate and building industries, for example,” she says.
McCrindle maintains that Australia cannot afford to overlook the VET sector and today’s new workers will have to be lifelong learners with hands-on skills, not just academic qualifications. “In a multi-career era, it is upskilling and retraining that will create a nimble and relevant workforce,” he says.
There’s little doubt a university education is regarded as far more prestigious than a TAFE education and possibly offers better long-term earning potential. That said, TAFE graduates can learn and earn at the same time and are often able to reach major milestones faster than their university counterparts.