First-year apprenticeship wages below the poverty line are part of the reason almost 50% of apprentices drop out before they finish their training, a new national report shows.
The UNE’s Living Standards of Apprentices shows wage levels for new apprentices were barely above the level of unemployment benefits and below the 2006 Henderson poverty line threshold of $276.75 a week.
Findings suggest retaining apprentices is just as important for the economy as attracting people into apprenticeships, which has been the main focus of both political parties.
The report says new apprentices in 2006-07 were unable to attain a “modest and adequate” living standard, unless their award included large allowances. These allowances are largely confined to the booming construction industry, which has strong union bargaining power.
This situation is compounded by the fact that just one-third of Australian apprentices are under the age of 19, with quite a lot of people taking up apprenticeships in middle age, says research convener Professor Michael Bittman.
“Rates of pay are really stuck in past. Before, a 15-year-old school leaver had three years before they could legally drink or drive, and they were probably living at home. Now, with only one-third under 19, the consumption bracket is quite a lot higher,” Bittman says.
Bittman says while qualified tradespeople now earned significantly higher wages, this hadn’t added much to apprentice income. “ACCI has done a survey which shows 87% of apprentices earn above award wage, but our study shows the average is just $6 above the award.
“If you compare first-year apprentice wages with those of a school leaver earning a junior wage, apprentices earned $70 less than those flipping burgers.”
Some observers argue some businesses are happy to lose their first year apprentices at the end of the first year so they can keep paying first year apprentice wages to their most junior staff.
Six industry categories were reviewed in the report – building and construction; metal trades and engineering; electrical trades; butchering; pastry cooks; and hairdressing – with first-year apprentice hairdressers paid the least.