Owner of B Phase Electrical James Brookfield (middle), with employees Tristan Johns, and Jordan Williams, says tradies’ salaries are on the rise. Dion Georgopoulos

From AFR 19/09/23 Julie HareEducation editor

University enrolments have headed south as potential students opt for trades over study in a heated labour market that has delivered big salaries and pay rises – without the student debt.

The lowest paid and most unskilled have received the biggest pay rises, proportionally, as the economy struggled to find enough electricians, mechanics and other blue-collar workers.

Experts said declining demand for university study – enrolments dropped by 109,600, or 8.7 per cent in the year to May 2022 – was the result of skill shortages and big salaries on offer in blue-collar jobs.

Higher pay and no uni debt

Adecco country manager Nicholas Lee said shifting dynamics in the workforce should push more people to think about whether university was the right path.

Apprentice electricians could earn $55,000 a year while they learnt on the job. “Admittedly, it’s low wage, but it’s a good return on investment. Once fully qualified, they almost double their earnings earning up to $100,000,” Mr Lee said, and salaries can jump to $200,000 in certain parts of the country and in sectors such as mining.

James Brookfield left school halfway through Year 11 for an apprenticeship and now runs his own business, P Phase Electrical, employing five staff members. “With the amount of infrastructure going on around Sydney some of the guys working on mines and tunnels and so on are earning $300,000 to $400,000,” Mr Brookfield said. While he can’t compete with that, he is paying new fully qualified electricians around $110,000 a year, compared to $70,000 five or six years ago.

One of his employees, Tristan Johns, 25, is in the final year of his psychology degree at Western Sydney University but said his mind was open to taking a trade in future. “Being a tradie wasn’t on my radar prior to working for James, but the more I’ve learned while on the job I would definitely think about it in the future. I could definitely earn more as a tradie at least for a few years, than I will be able to as a psychology graduate,” Mr Johns said. His student debt was close to $35,000.

Train drivers could also earn between $150,000 to $180,000 with just a certificate level qualification, with those in remote areas earning up to $250,000 – with no student debt to pay off.

Meanwhile, the median salary for university graduates in 2022 was $68,400, while the average student debt was $24,770.

Mr Lee said many blue-collar workers now earned salaries usually associated with white-collar jobs and earn-while-you-learn training meant they graduated debt free.

“These are roles that are not going to be easily replaced by artificial intelligence and automation,” he said.

“Roles that use hands and heart and mind are going to increase in importance and value.”

Trades back in demand

Australian Bureau of Statistics data reveal that university enrolments fell by 5 per cent between 2021-22 as school-leavers and mature-age students responded to the healthy jobs market.

Andrew Norton, a higher education policy expert with Australian National University, said school-leavers with high ATARs were going to university anyway, but those with lower ATARs were “making a sensible trade-off” and going into trades and other jobs.

Data suggests that after years of being the poor cousin to university study, trades and vocational education have regained lost ground.

The trend appeared to undermine federal education minister Jason Clare’s target for 55 per cent of people aged 25 to 34 to have a university degree by 2050, which require a doubling in the number of students from current numbers.

At the end of 2022, there was a 10 per cent increase in the number of people starting an apprenticeship compared to a year earlier, according to the National Centre for Vocational Education Research.

South Australia and Queensland had the highest growth, with the number of apprentices in training rising by 16 per cent.

Those figures coincide with an increase in the number of people who did not complete year 12.

“It’s causing universities quite a lot of problems, but it’s mostly benign from the point of view of students because they are doing something constructive,” Mr Norton said.

Demand is so soft that the University of New England last week promoted a guaranteed place in 2024 – without an ATAR score. All potential students need is a letter of recommendation from their school.

In its September labour market update, Jobs and Skills Australia said that employment had continued to increase across all five skill-level groups with the biggest rises in the lowest and middle groups and the lowest rise in the highest skill level.

Mark Diamond, national secretary of the Rail, Tram and Bus Union, said there was a lot of anecdotal evidence of older workers looking to move into the occupations the union represented.

“While that may be taking some people away from studying at university, those workers are usually substituting one form of education for another,” Mr Diamond said.