Uni v TAFE:

Anthony O’Brien

Money Magazine Australia - - CONTENTS - ANTHONY O’BRIEN

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.

Missed op­por­tu­ni­ties?

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.”

Elec­tri­fy­ing suc­cess

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.

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