Apprenticeships Perth: Is there an Apprenticeship Crisis?

It is very rare to find any issue that can unite both sides of trade unions, employers and politics, but these unlikely allies have been telling everyone. In 2016, the leader of the labor party in Australia, Bill Shorten, said that Australian apprenticeship and training has seen its numbers go at its lowest point since 2001. He blames the plummeting numbers to the funding cuts made by the Coalition.

This year, according to the minister of vocational education and skills, the Coalition government’s Skilling Australians Fund will restore the plummeting apprenticeship numbers to its glory years. One of the main contributors to its massive decline is the labor department’s withdrawal of employer incentive.

According to the Australian Council of Trade Unions, apprenticeship numbers have been plummeting under the previous leadership. The Australian Chamber of Commerce and Industry, Australia’s Business Council, as well as the Australian Industry Group also claimed that the apprenticeship in the country has declined by at least 45% since 2012.

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According to a new report from Mitchell Institute, some of the misconceptions behind this issue will provide truth and can give way to move forward in the apprenticeships debacle. The big question is, “What is causing these confusions?”

Apprenticeship as a term can be very misleading because it is always used to refer to both traineeships and conventional apprenticeships. Both internship and apprenticeship involve a combination of a formal contract of training and employment. But in reality, these two have different applications and backgrounds.

The word apprenticeships are usually used in trades, industries like plumbing, commercial cooking, construction, and electrical. It typically involves a contract for four years. A lot of people still associate the word apprenticeships with trades. Traineeships, on the other hand, also combine formal training and employment.

It was created in the 1980s by the Commonwealth government, to provide better job opportunities for fresh graduates and young people, especially in the service industry. Both internships and apprenticeships have a vital role in every business. But numbers and information related to both systems are usually presented together as apprenticeships. It creates a misleading picture of the state of the conventional trade-based apprenticeships structure.

So, what is the real story here?

When you separate apprenticeships and traineeships, it becomes evident that apprenticeship is not in crisis. As a matter of fact, some trade apprenticeship has experienced dramatic growth in the past years. According to recent figures, trade commencements, usually traditional trade apprenticeships, have been stable for the past 20 years.

On the other hand, non-trade commencements or internship have experienced a steep decline since 2012. But according to some reports, the increase in numbers of internships during 2011 and 2012 was caused by several policy changes. It includes the expansion of the trainee system to cover the existing system, not just for the new and part-time workers, even for full-time staff. It also includes the availability of employee incentives.

Together, the policies made it very attractive for a lot of companies to take trainees or make existing employees become trainees, like in some cases; the employee incentive will act as an effective salary subsidy. Evidence suggests that the incentives are being used in the wrong way, and the government rightly scaled back the qualification from 2012 to 2013. It explains the reason for the steady rise and the sudden drop in trainee commencements during this time. But these changes didn’t affect the fundings for the trade apprenticeships.

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What is the story behind apprenticeships?

The issue with conventional trade apprenticeships is more difficult to explain. A lot of factors influence apprenticeship commencements all over different industries. The first thing we need to address is that not every trade apprenticeships have experienced a decline since 2013.

According to reports, some have seen growth, and the decline depends on the industry. If the funding change does not account for the steady decrease in commencement, what are the factors that can explain the drop in trade apprenticeships?

The answer to this question is the range of social and economic factors that include low and negative growth when it comes to full-time employment from 2013 to 2016, the ongoing structural change in its composition of the labor market. Not only that, but it also includes the relevance of the current apprenticeship model in some industries and the supply factors that include a potential decline in the quality of the apprenticeships pool of applicants.