Apprenticeships now more popular than university

Anna Clearwater got a degree in international politiics, and is now apprentice carpenter.
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Anna Clearwater got a degree in international politiics, and is now apprentice carpenter.

Anna Clearwater enjoyed the degree in international politics she did at university.

But after graduation, it quickly became clear her education provided no direct path into the workforce.

"I loved it, but I realised there were just no jobs. It was a bit depressing," Clearwater recalls.

Not one to be got down by circumstances, Clearwater took a long, hard look at the world and decided to do a trade apprenticeship as a carpenter.

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She landed herself a trial with a building company, and two and a half years later is nearing the end of her apprenticeship with an impressive set of skills.

Josh Williams from the Industry Training Federation says: "We now have over 42,000 apprentices in New Zealand, and a ...
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Josh Williams from the Industry Training Federation says: "We now have over 42,000 apprentices in New Zealand, and a further 109,000 industry trainees across a huge range of industries."

Though it is still unusual for a woman to do a building apprenticeship, apprenticeships are far from unusual.

There are now more apprentices and industry trainees than there are students in university, says Josh Williams, head of the Industry Training Federation.

"We now have over 42,000 apprentices in New Zealand, and a further 109,000 industry trainees across a huge range of industries gaining skills and qualifications on-the-job."

Apprenticeships have had a renaissance.

Many people have the misguided impression that apprenticeships have been in decline since the late 1980s.

"The proportion of our workforce doing an apprenticeship is about the same today as it was in 1987, which people think was the end of heydays of apprenticeships," Williams says.

They did dip dramatically in the 1990s, but Labour under Helen Clarke breathed life into them again, creating Modern Apprenticeships.

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National carried on the work, with what are now called New Zealand Apprenticeships.

Though Williams says the guiding assumption of high schools is that they are training pupils to go on to university, the reality is "apprenticeships are definitely an option".

In fact, the number of apprenticeships on the go has risen by 12 per cent in the last two years.

While university degrees have been a route to employment, often well-paid, university educations are also a route to a student debt.

For youngsters like Clearwater, who do not pick a degree sought after by employers, that debt can feel like a millstone around their neck when they finally try to enter the workforce.

"I wish I could turn back time and get rid of that stupid student loan," says Clearwater.

The economics of apprenticeships work very differently.

The bulk of a university education is paid for by the taxpayer, and the remainder by students themselves, usually using a student loan.

By contrast, employers pay the bulk of the cost of apprenticeships.

Though there are some direct costs apprentices pay - like Clearwater buying her tools - they are learning on the job, and are being paid.

The wages may not start out very high but once they have the skills and qualify, their pay leaps. Many turn to working on their own account, launching businesses - some in their 20s.

Clearwater says her apprenticeship has been a mix of theory and practical learning, and as she has progressed, her wages have risen.

"My boss always said the more valuable you are, the more I will pay you," she says.

"This makes the most sense to me about any way of learning. By the time you qualify, you can do everything. It was such a change from university."

"It still blows my mind you can pay fees of $400-$500 a year for an apprenticeship. Compare that to the cost of a university degree. I don't know how you could justify it."

Williams says 53 per cent of the Vote Education budget goes to universities, and just 7 per cent goes to fund apprenticeships through the 11 industry training organisations (ITOs) which are members of the Federation.

And, Williams says, as apprentices pay tax on their wages, they are contributing to the cost of their educations.

There's another financial aspect to the skills Clearwater acquired.

At a time when home ownership is years away from the vast majority of university leavers, Clearwater has been able to buy a run-down "old school Kiwi bach" in Mangawhai and is renovating it.

"If you had told me a few years ago I would have been doing up my own house, I would have laughed in your face."

She's literally building equity with the sweat of her brow and the skill of her hands, though she ruefully admits she has spent rather more time on her surfboard in the last few months than with a hammer in her hand at work on her own place.

As with degree courses, the earning potential of different apprenticeships varies.

There are apprenticeships for everything from tourism and food service, to carpentry and boat-building.

So persuaded is the Government that apprenticeships are good for the economy, especially one which has been woefully behind in its house building, Williams says it has set a target of 50,000 new apprenticeships by 2020, and set aside $10 million of extra funding to be spent this year to reach that goal.

There is one missing brick to put into the apprenticeship wall though, Williams believes.

More high schools need to recognise apprenticeships are not a poor second to university, only for pupils who fall short academically.

"More schools need to reorientate their curriculums to be employment-facing," he says.

"Three out of 10 school leavers go to university, but 10 out of 10 go to the workforce."

"Not only have apprenticeships not gone away, they are big, and they are not the domain of lower-performing students."

Some parents should think carefully about whether pushing their children to go to university is also a good idea, he believes.

"The mums and dads of New Zealand have been pushing the university line because they think that is in the best interests of their kids, but I think the doubts are growing about the lack of guarantees of a good job as more and more people get degrees."

STUDENT LOANS

  • At the end of June, the average loan held by Inland Revenue was $20,983 and the median loan balance was $14,904.
  • The average repayment time for people who finished study in 2014 was 8.4 years.
  • At the end of June, the average loan to complete a bachelors degree was $29,610
  • Earnings for people qualifying with a bachelors degree was 140 per cent of the media national earnings after three years of entering the workforce.

 - Stuff

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