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An examination of award wages among Australian apprentices and trainees.

Abstract

Low rates of award pay for apprentices have been seen as discouraging young people from starting an apprenticeship as well as contributing to low completion rates. This criticism, however, assumes that few apprentices receive above-award payments. Analysis of data from the 2009 Australian Bureau of Statistics (ABS) Survey of Education and Training finds that over-award payments for apprentices are common, especially in the electro-technology, automotive, and engineering trades. Most trainees also receive over-award payments, particularly existing workers, older trainees, and male trainees. In most cases, the relevant award wage for apprentices and trainees is below the national minimum wage. More importantly, the method for determining the apprentice award wage in most cases does not take into account age or level of schooling, even though apprentices are increasingly older and are more likely to have completed Year 12. This has led to a decline in the apprentice award wage, relative to the applicable award wage in alternative employment.

1. Introduction

It has been often contended that the low level of apprentice pay is a significant barrier to increasing the number of people successfully completing apprenticeships and traineeships. Bittman et al. (2006) identified that the award pay rates for first-year apprentices in six representative occupations were all below the Henderson Poverty Line. In 2010, the Australian government commissioned an expert panel to consider reforms to the apprenticeship system. The Australian Manufacturing Workers Union (AMWU), in its response to the review, called for an increase in apprentice rates of pay. It cited its own research and other surveys that showed that low rates of pay act as a disincentive to commence and complete an apprenticeship (AMWU 2011, p. 15). In 2012, Fair Work Australia (FWA) will conduct a review into apprentice and trainee wages and conditions and, before the review had even begun, there were calls to increase the level of apprentice pay (Lewis 2011).

Minimum wages contained in awards are however just that--minima--and employers have always been free to pay employees higher wages if they choose (or if enterprise bargaining agreements require it). This paper examines the extent of over-award payments received by Australian apprentices and trainees using data from the Survey of Education and Training (SET), conducted by the ABS in 2009. We match earnings data for individuals to the rate of pay contained in the relevant pre-reform federal award or the notional agreement preserving a state award (NAPSA), taking into account occupation, age, stage of apprenticeship, and highest level of education.

With these data, we establish that most apprentices in trade occupations receive pay in excess of the relevant federal award rate. We find that above-award payments are most common in trade occupations with strong demand and high levels of collective bargaining by employees--electrical and engineering, and automotive. Where there are higher rates of award dependence by employees, as in the food trades and hairdressing, we find that wages are closer to the award rates. We also find that many trainees receive above-award rates. This, however, is influenced by existing workers who receive well in excess of the relevant training wage. New workers, particularly younger trainees, are more likely to receive close to the relevant award rates.

Although we find that over-award payments may be common, the level of award wages may send a signal to prospective apprentices about likely wages. We examine award wages for apprentices (using engineering apprentices as a benchmark) relative to award wages in the fast-food industry. We find that the changes in the attributes of apprentices overtime have contributed to a general decline in the relative award wage for apprentices. On the basis of these findings, we offer some conclusions and suggest some implications for further research and policy.

2. Award Reliance among Apprentices and Trainees

There are two reasons why modern awards are an apt starting point for the analysis of apprentices' and trainees' employment conditions: awards remain the predominant instrument under which apprentices and trainees are employed; and the standards set in awards are also relevant for the apprentices and trainees who have their conditions set by enterprise agreements. Under the Fair Work Act, an enterprise agreement may deviate from the terms included in the relevant award but must leave an employee 'better off overall' (Fair Work Act 2009, s 186). Table I shows the employment arrangements for apprentices and trainees who commenced in 2009 using data extracted from the Training and Youth Information Management System (TYIMS) administered by the Department of Education, Employment, and Workplace Relations (DEEWR). The results indicate that two-thirds of apprentices and trainees who commenced in 2009 were employed under a federal or state award. Awards are even more important for apprentices in the traditional trades areas, covering three-quarters of apprentices who commenced in 2009.

Award-reliant employees may nonetheless receive above-award payments, although reliable data on the pay rates received by Australian apprentices and trainees are scarce. Bittman et al. (2007) in their report did not examine the incidence of over-award payments. A survey by the Australian Chamber of Commerce and Industry (ACCI) found that a majority of their members who responded to the survey (52 per cent) paid some or all of their apprentices above-award wages (ACCI 2005). The Chamber reported that the median wage premium above the award rate was between 18 and 20 per cent.

3. Award Coverage for Apprentices and Trainees

Award coverage for apprentices and trainees, as for employees in general, depends on a number of factors including jurisdiction, occupation, and industry, and period in time. Two recent reports (NCVER 2010a; Dunn et al. 2011) set out the current arrangements. With few exceptions, under the Fair Work regime the pay and other employment conditions for trainees are set by a single instrument (the National Training Wage Schedule) (Dunn et al. 2011, pp. 223-5). The precise trainee rate of pay depends on a number of factors including qualification level, training package, the highest level of schooling completed by the trainee, whether the trainee is still at school and, if not, the n u tuber of years since the trainee left school. For apprentices, pay and conditions a re tied to the relevant trade and vary on a n occupational and (or) industry basis. In total, 46 of the 122 modern awards make some provision for apprentices. The rate of apprentice pay is usually calculated as a proportion of the relevant tradesperson rate. The proportion depends on how far the apprentice has advanced. Usually this is a time-based measure, but some awards provide for competency-based wage progression. Depending on the award, a first-year (or stage one) apprentice can expect to be paid, at a minimum, between 37.5 per cent and 55 per cent of the relevant tradesperson rate (NCVER 2010a, p. 31). Apprentices may also be eligible to receive tool allowances or other payments. Special rates of pay may apply to adult apprentices or to apprentices who have completed Year 11 or Year 12. These provisions vary award by award and are discussed in depth in Dunn et al. (2011, pp. 71-114).

Our first task here is to examine the extent of over-award payments among apprentices and trainees. Income data from the ABS SET relate to May 2009, before the commencement of modern awards. Therefore, we need to consider the regulatory arrangements that were in place at that time, which were those established by the Howard government under the Workplace Relations Amendment (Work Choices) Act 2006, commonly known as the Work Choices regime. Work Choices greatly expanded the coverage of the federal workplace relations system by capturing all employees of constitutional corporations that were previously covered by the state systems. It was estimated at the time that this increased the proportion of the Australian workforce covered by the federal system to around 85 percent (DEEWR 2009, p. 64). Employees in the federal system who were formerly covered by state awards were now covered by notional agreement-preserving state awards (NAPSAs).

Second, Work Choices removed pay scales from awards and NAPSAs, thereby creating a separate pay-scale instrument. At the same time, the reforms transferred wage-setting powers from the Australian Industrial Relations Commission (AIRC) to the Australian Fair Pay Commission (AFPC). We have calculated the applicable award rates of pay for apprentices and trainees covered by the federal system as at May 2009. The rates of pay include all AFPC decisions and AIRC Wages and Allowance Review adjustments as at 2008. (No increase was made in 2009.) Further details are given in NCVER (2010a).

4. Method

In this paper, we compare the apprentices' and trainees' actual weekly income with their award rate of pay. This is a different approach to that used in the 2005 ACCI investigation of apprentice pay, which used a survey of employers. Our approach resembles studies that have used data from the Household Income and Labour Dynamics Australia (HILDA) survey to examine the extent of minimum-wage work in Australia (Healy and Richardson 2006; McGuinness, Freebairn and Mavromaras 2007). Our task is considerably more complicated, however, because there is not a single award rate of apprentice pay. We calculate an award rate of pay using characteristics contained in the survey of education and training, such as age, occupation, and state. The following process was used to calculate the extent of above-award payments to apprentices and trainees.

First, an award wage for apprentices and trainees at May 2009 (the collection period for the SET) was determined, using the following principles.

For trainees, the award wage rate was calculated using the National Training Wage Award 2000 [AP790899], using a combination of qualification level, occupation, industry, highest level of schooling completed, whether still at school and, in the case of Certificate IV traineeships, duration of employment in their current job. Trainees undertaking a Certificate I to Certificate IV qualification were allocated to wage levels on the basis of their occupation and industry. This is the best available match possible using the SET, given that the Training Package (which is the basis upon which wage levels are determined) was not within the scope of the SET. Most Certificate I to Certificate III traineeships are paid at Wage Level A (see NCVER 2010, p. 52). To simplify coding, we identified all those combinations of occupation, industry, and qualification level that correspond to Wage Level B and Wage Level C. All other combinations were assumed to be paid at Wage Level A.

Information from the National Centre for Vocational Education Research (NCVER) apprentice and trainee collection (NCVER 2010b) was used to match training packages to occupation and industry combinations. Initially, current apprentices and trainees were cross-tabulated by training package and occupation at the 2-digit level. Where it was not possible at this level of detail to match an occupation to a training package, the occupation was further segmented by industry. Where a combination of industry and occupation could apply to more than one wage level, a decision was made to allocate all trainees in that combination to the highest wage level. The final combinations of industry and occupation and their allocation towage levels are shown in NCVER (2010a) (1).

The award wage for trainees undertaking a diploma-level qualification was given as the federal minimum wage. Where the qualification level was missing (as it was in one-third of cases), the qualification level was assumed to be Certificate III.

For apprentices, the award wage rate was calculated using the relevant award rate based on stage and on whether an adult apprentice. Adult apprentices were deemed to be those who were aged 21 or older when they commenced employment in their current job. The relevant award was identified on the basis of the following criteria: occupation (to 2-digit level), industry (to 2-digit level), and state.

The principal occupational or industry award or NAPSA was selected. It is possible, however, that the apprentice is instead covered by another award or NAPSA, such as a public sector award or an enterprise award. At the 2-digit level, it is not possible to distinguish plumbing apprentices (who were covered by their own occupational award) from other construction apprentices. Technicians (ANZSCO31) were excluded, as these are generally traineeships, as were animal and horticultural trades workers (ANZSCO32) who did not self-report as apprentices, and who were not working in the nursery, landscaping, gardening, or green-keeping industries. Apprentice rates of pay have been identified for the following apprentice groups: automotive, engineering, construction (including plumbers), electro-technology, food, horticultural, hairdressing, printing trades, wood trades, and textile and clothing footwear trades. In total, 69 pre-reform awards and NAPSAs were used in the analysis and these are listed in NCVER (2010, Appendix A).

Stage (or year) was derived from duration of current employment in their current job. Part-time apprentices were assumed to progress at half the rate of full-time apprentices. All apprentices were assumed to be enrolled in four-year apprenticeships. Separate adult rates of pay were identified in nine awards. In addition, separate rates of pay were identified for apprentices working in the engineering trades who had completed Year 11 or Year 12. The rates of pay take into account the base rate, as well as any tool allowances, industry allowances, or special allowances generally payable to apprentices. The rates of pay include all AIRC Wages and Allowance Review adjustments, as of 2008. Only pay rates in the federal jurisdiction have been used. Apprentices working for most non-constitutional corporations would have remained subject to the state award rate, rather than the NAPSA rate. The standard tradesperson award rate in the state jurisdictions was between 0.4 per cent (Tasmania) and 2.1 per cent (Western Australia) higher than for the federal C10 Tradesperson rate. Apprentices with a higher likelihood of working for non-constitutional corporations include apprentice hairdressers and apprentices in food trades working in the hospitality industry. It was possible to identify a rate of pay for 475 respondents (271 apprentices and 204 trainees). Our results are weighted using the population weights calculated by the ABS.

In calculating the award wage, we assume a 38 hour week for apprentices. Apprentices who report that they usually work less than 38 hours have their award rate of pay adjusted for the number of hours that they do work. We do not adjust the award rate of pay for those working more than 38 hours per week. To do so would have involved more complex calculations and assumptions to take into account what overtime penalty, if any, applied. Likewise, the award rate of pay does not take into account any shift penalties that might be applicable, since the Survey of Education and Training contains no information on shifts. Therefore, in interpreting the results, it should be borne in mind that provisions entitling apprentices to overtime pay and shift and overtime penalties contribute to the extent of over-award payments.

When reporting the proportion of apprentices and trainees paid at the award wage we include a tolerance of plus 10 per cent. We do not report separately those apprentices and trainees who are paid less than the award wage. That is, if our award calculations indicate that an apprentice with particular characteristics should be paid $500 per week, we count all those apprentices earning up to and including $550 per week as being paid the award wage.

5. Results

We now examine the extent of over-award payments among apprentices and trainees. We report the average (median) weekly award wage as calculated, the average (median) weekly income from the main job, and the average (median) weekly above-award payment. (2)

Looking first at income for apprentices, we find that most apprentices receive over-award payments. As Table 2 shows, however, there is substantial variation by occupation. More than one in seven automotive and engineering apprentices and more than one in four electrical apprentices earn more than twice the relevant award wage. While a majority of construction apprentices receive close to the relevant award rate, this partly reflects the higher award rates for apprentices in the construction trades who are paid a weekly industry allowance at the same rate as tradespeople, as well as a special allowance which is paid at the same ratio as their ordinary wages. This aside, apprentices from the other categories (comprising the food trades, horticultural trades, hairdressing, wood trades, printing trades, and textile, clothing and footwear trades) are less likely to earn income well in excess of the relevant award wage. The average weekly income for automotive and engineering, construction, and other trades apprentices were still below the federal minimum wage at the time ($543.80 per week).

When considered by stage of apprenticeship, there is a sharp difference between apprentices in the first two years of their apprenticeship, who earn well below the minimum wage, and those in the later stages, who do considerably better. The insertion of adult apprentice pay clauses into awards appears to have made an impact, with adult apprentices receiving a higher award rate as well as having a higher average income. There is little difference in the incomes of apprentices working in capital cities and those working elsewhere, although it does appear that apprentices working outside the capital cities are less likely to receive above-award payments. As expected, apprentices working in small businesses are less likely to receive above-award payments.

In general overtime hours do not explain the distribution of over-award payments: the median working hours for all overpayment categories was 40, except for the 110 to 149 per cent range where the median weekly working hours was 39. The exception may be electrical apprentices. The median working hours for electrical apprentices receiving 200 per cent of the award wage, or more, was 45 (data available from author on request). To a lesser extent, the same applies to automotive and engineering apprentices.

Turning now to trainees, we see that a majority of trainees also earn incomes well in excess of the relevant award wage. This picture varies distinctly by age and duration of employment. These results are shown in Table 3. Most trainees who were younger than 21 when they started their current job receive the award wage or up to 149 per cent more, whereas a majority of trainees over the age of 21 earn at least 150 per cent of the relevant weekly award wage. A similar split occurs for duration of employment. Existing workers who commence a traineeship are entitled to continue to receive their existing wage, which must be at least equal to the minimum wage. As the highest training wage rate was worth 91 per cent of the minimum wage in 2009, existing adult workers, by definition, will receive in excess of 9 per cent of the relevant award rate. As a proxy measure, we define existing workers as those who have been in their current job for more than 24 months. More than nine in 10 non-trade apprentices and trainees complete their training within this period (NCVER 2010b, p. 20). Existing workers are much more likely to earn income well in excess of the relevant trainee award wage. Male trainees, reflecting their concentration in the driver and machinery operator occupations, are much more likely to earn above-award wages, whereas female trainees a re more likely to earn close to the relevant award wage. Junior trainees, new trainees, and female trainees earn on average less than the federal minimum wage.

6. Relative Award Wages

we now briefly examine the matter of relative award wage level for apprentices and trainees. It is clear that for some groups of apprentices and trainees, wage levels are very low and earnings fall substantially below the minimum wage. While the absolute wage level is important to considerations of the living standards of apprentices (Bittman et al. 2006), it is arguable that the relative award wage--or the award wage an apprentice could expect to receive relative to what they could earn in alternative employment--matters more. Karmel and Mlotkowski (2011) found that trainees are less likely to complete their training if the wage they ca n expect to receive in alternative employment is higher than the training wage. They did not find a similar effect for apprentices, finding instead that what matters is the completion premium--the gap between the wage on completion and the wage someone could expect to receive in alternative employment. Notwithstanding this, low wages are thought to discourage potential apprentices and trainees (Misko, Nguyen and Saunders 2007).

It is not possible simply to compare apprentice wages and the minimum wage because of the age profile of apprentices. At the time they commence, a majority of apprentices in the traditional trades are under 18 years of age and many more are under 21. Therefore, junior rates may apply in alternative employment. Lower rates of pay for workers under 21 continue to be common across the Australian workforce. Two further issues complicate the comparison. Different junior rates apply in different industries and occupations. In some awards, junior rates have been removed or wound back to apply only to workers under 18.

A second challenge--arguably more important in comparing apprentice wages--is that the age and education profile of apprentices has changed over time. Throughout most of the post-war era, apprentices usually commenced their apprenticeships immediately after reaching the end of compulsory schooling (Knight 2012, p. 13). As governments implemented school-retention strategies, more students stayed on to complete Year 12 and the average age of commencing apprentices rose. In 1980-81, the most common commencing age for an apprentice (there were no trainees at this point) was 16 (DEYA 1982, p. 16). In 1995, the most common commencing age for a trade apprentice was 17, and 16 per cent were aged 21 or older (NCVER unpublished statistics). In 2010, the modal commencement age was 18, and 38 per cent of commencing apprentices were aged 21 or older. Similarly, the proportion of commencing apprentices (excluding school-based apprentices) who had completed Year 12 increased from 39 per cent in 1995 to 44 per cent in 2010 (NCVER unpublished data).

Over the last 20 years, various haphazard approaches have been introduced to take account of the changing circumstances of apprentices and to increase their incomes. These are surveyed elsewhere (Dunn et al. 2011, pp. 4-13; Oliver 2010, pp. 109-11), but the most significant are the introduction of separate pay rates for adult apprentices, the introduction of separate rates for commencing apprentices who have completed Year 11 or Year 12, and introducing competency-based progression as a means of accelerating an apprentice's progression to higher-paying stages, where appropriate. In 1997, the Metal Industry Award 1984 was varied to provide an adult apprentice rate, set at the National Training Wage Award Level B exit rate for the first year and the federal minimum wage in the second year (Dunn et al. 2011, p. 9). In 2006, the AIRC introduced higher pay rates into the Metal, Engineering, and Associated Industries Award 1998 for junior apprentices who had completed Year 11 or Year 12, in recognition of 'higher competency levels as measured by experience, maturity and skills acquired at higher levels of schooling' (AIRC 2006, p. 9).

The effect of these changes was to improve the award wage that an engineering apprentice could expect to receive, relative to the award wage that they could earn in alternative employment, given their age and schooling. This is demonstrated in Figure 1. Apprentice wages under the Manufacturing and Associated Industries and Occupations Modern Award 2010 (and its predecessor federal awards) are compared with rates based on the Fast Food Industry Modern Award 2010 (and its predecessor federal award, the National Fast Food Industry Award 2000) for junior employees, and with the national minimum wage for adult employees. Based on the percentages contained in the fast-food awards, we have assumed that a 16 year old fast-food worker receives 50 per cent of the national minimum wage, a 17 year old 60 per cent, and an 18 year old 70 per cent. We selected fast food as it is an industry in which many young people have direct experience from working part time while still at school. As the default scenario, the standard wage for a commencing apprentice (including the appropriate tool allowance) is compared with that of a 17 year old junior working full time in fast food. In most jurisdictions, someone leaving school after Year 10 is more likely to only be 16 but, since the modal commencing age of an apprentice in 1994 was already 17, we have erred on the conservative side. As shown in the graph, a commencing apprentice would earn 88 per cent of a 17 year old fast-food worker's earnings in 1994, rising to 98 per cent in 1997, before declining gradually to 91 per cent in 2011.

Changes to the profile of apprentices, however, means that the ratio of the apprentice wage to the alternative award wage was much lower. Following the introduction of adult rates in 1998, the ratio of the apprentice wage to the alternative wage for a commencing apprentice aged 21 or older went from 54 per cent to 82 per cent, eventually increasing to 95 per cent in 2005. The impact of the new rates for Year 11 and Year 12 completers in 2006 was less marked but still significant. The ratio of the apprentice wage to the alternative wage in fast food for an 18 year old apprentice who had completed Year 12 increased from 73 per cent in 2005 to 87 per cent in 2006. The result of all the changes is that for the three scenarios the appropriate apprentice wage is between 85 per cent and 95 per cent of the corresponding wage in alternative employment. (The gradual decline for all ratios over the period 1997 to 2010 is due to the compression of the relativity between the minimum wage and the C10 tradesperson rate on which apprentice wages are based (see Healy 2009)).

Most modern awards do not provide for higher relative wages for adult apprentices or junior apprentices who have completed Year 11 or Year 12. Only 22 of 46 modern awards that provide for apprentices include separate pay provisions for adult apprentices (Dunn et al. 2011, p. 80). To date, only four modern awards take into account an apprentice's highest level of schooling when determining their level of pay (Dun et al. 2011, p. 74). There are also other provisions that may result in higher wages for apprentices--such as recognition of pre-apprenticeship qualifications and competency-based progression--but these are also uncommon and, in any case, they do not lend them selves to a straight forward calculation of a relative wage. Therefore, it remains the case that relative wages for most apprentices have declined overtime, as apprentices have become older with higher levels of schooling.

The profile of trainees has also changed overtime, with trainees becoming older (Dunn et al. 2011, pp. 199-200) and with higher levels of schooling (Dunn et al. 2011, p. 213). This change, however, has not affected relative wages over time, because since the National Training Wage Award 1994 was made, trainee wages take into account the trainee's highest year of schooling and the number of years since the trainee left school. A trainee who has just left school after finishing Year 12 and who is undertaking a traineeship in Wage Level B would have consistently received around 75 per cent of the award wage for an 18 year old employed in fast food 3. An adult trainee receiving the top rate for Wage Level B would have received 94 per cent of the national minimum wage in 1994, and 88 per cent in 2011. As with apprentices, the gradual decline is due to compression of the relativities between the national minimum wage and award rates of pay for skilled and semi-skilled workers.

[FIGURE 1 OMITTED]

7. Conclusion

This article examined award wages for apprentices and trainees, looking at the extent of over-award payments among apprentices and trainees, and the level of award wages for apprentices and trainees compared to award wages in jobs for workers with similar attributes. We find that over-award payments for apprentices and trainees are in fact quite prevalent. This is likely to be a reflection of a number of factors:

* Strong market demand for skilled labour, especially in the electrical and automotive and engineering trades.

* The opportunity to work additional hours as overtime or shiftwork, which continue to attract penalties in most awards, but which have not been taken into account in this study.

* Coverage of apprentices by other wage instruments, such as collective agreements, that cannot be identified in the data available.

* Existing workers undertaking traineeships and, to a much lesser extent apprenticeships, and so are entitled to receive a wage higher than the apprentice or trainee wage.

Consistent with our expectations, we find that among apprentices, over-award payments are most common in the electrical and automotive and engineering trades and least common in the other trades. Against our expectations, we find that over-award payments are quite common among trainees. Over-award payments for trainees are, however, segmented by age, sex, and employment duration. Female trainees, young trainees, and new workers are much more likely to earn wages close to the award wage.

The award wage remains relevant, especially as an indication to potential apprentices of what they could expect to earn. It is therefore important to note that as the typical apprentice has become older and has completed more schooling, the apprentice award wage relative to the award wage in alternative employment has declined. Innovations such as separate wage rates for adult apprentices and for apprentices who have finished Year 11 or Yea r 12 have offset this, but they have not been implemented in the majority of awards covering apprentices. The same issue has not arisen in the case of trainees, because of the different process for calculating wage rates.

Award wages and the extent of over-award payments are germane to a consideration of increasing apprentice and trainee commencement and completion rates, but the scope of the discussion needs to be broader than just examining the absolute level of the apprentice wage, encompassing apprentices and trainees, the occupations open to apprentices and trainees once they complete their training, and the alternative occupations and jobs that are available to apprentices and trainees if they do not complete their training.

References

Australian Chamber of Commerce and Industry (ACCI) (2005), 'Paying Apprentices-The Market Responds', ACCI Review, No. 120, February, pp. 5-9.

Australian Industrial Relations Commission (AIRC)(2006), Application to Vary the Metal, Engineering and Associated Industries Award 1998, Decision PR6968890, 21 February.

Australian Manufacturing Workers Union (AMWU) (2011), Submission in Response: Apprenticeships for the 21st Century Expert Panel, AMWU, Melbourne.

Bittman, M., Reavell, R., Smith, G. and Battin, T. (2006), Living Standards of Apprentices, report prepared for Group Training Australia, Centre of Applied Research in Social Science (CASS), University of New England, Armidale.

Department of Education and Youth Affairs (DEYA) (1982), Apprenticeship Statistics, 1972-1972 to 1980-81, Australian Government Publishing Service, Canberra.

Department of Education, Employment and Workplace Relations (DEEWR)(2009), Inquiry into the Fair Work Bill 2008: Department of Education, Employment and Workplace Relations Submission, Parliament of Australia, Canberra.

Dunn, A., Rozenbes, D., Maltman, M, Leung, E., Pung, A., Waugh, B., Dixon, C., Cagorski, T., Linehan, A. and Tisseverasinghe, R. (2011), Australian Apprentice Minimum Wages in the National System, Fair Work Australia, Melbourne. Healy, J. (2009), The Wages Safety Net of the Australian IndustriaI Relations Commission, 1993-2005, PhD Dissertation, Flinders University, Adelaide.

Healy, J. and Richardson, S. (2006), An Updated Profile of the Minimum Wage Workforce in Australia, report commissioned by the Australian Fair Pay Commission, Research Report No. 4/06, Melbourne.

Karmel, T. and Mlotkowski, P. (2011), The Impact of Wages and the Likelihood of Employment on the Probability of Completing an Apprenticeship or Traineeship, NCVER, Adelaide.

Knight, B. (2012), Evolution of Apprenticeships and Traineeships in Australia: An Unfinished History, NCVER, Adelaide.

Lewis, S. (2011), 'Rising out of Poverty--Apprentice Revolution', Daily Telegraph, 6 December.

McGuinness, S., Freebairn, J. and Mavromaras, K. (2007), Characteristics of Minimum Wage Employees, revised edition, July, research report No. 2/07, commissioned by the Australian Fair Pay Commission, Melbourne.

Misko, J., Nguyen, N. and Saunders, J. (2007), Doing an Apprenticeship: What Young People Think, NCVER, Adelaide.

National Centre for Vocational Education Research (NCVER) (2010a), The Apprenticeship and Traineeship System's Relationships with the Regulatory Environment, report No. 3 prepared for the Australian Government Expert Panel on Apprenticeships, NCVER, Adelaide.

National Centre for Vocational Education Research (NCVER) (2010b), Apprentice and Trainee 2009 Annual, NCVER, Adelaide.

Oliver, D. (2010), 'Modern Awards and Skill Development through Apprenticeships and Traineeships', The Economic and Labour Relations Review, vol. 21, pp. 99-120.

(1) The spreadsheets used to allocate industry and occupation combinations to wage levels are available from the author on request.

(2) The average weekly above-award payment is smaller than the difference between the average weekly award wage and the average weekly income because a tolerance of 10 per cent is applied to the calculated award wage.

(3) Author's calculations.

Damian Oliver, National Centre for Vocational Education Research (NCVER), Adelaide
Table 1: Percentage of Commencing Apprentices and Trainees
Employed under an Award, 2009

Occupation (ANZSCO category)                 Apprentices and
                                                    trainees

1 Managers                                              75.5
2 Professionals                                         55.3
3 Technicians and Trades Workers                        78.5
4. Community and Personal Service Workers               76.4
5. Clerical and Administrative Workers                  60.7
6. Sales Workers                                        64.5
7. Machinery Operators and Drivers                      49.0
8. Labourers                                            55.7
Total                                                   67.5

Sources: Customised data supplied by the Department of Education,
Employment and Workplace Relations, August 2010.

Table 2: Apprentice Average Weekly Income and Award
Overpayment by Selected Characteristics

                            Average         Average           Average
                    (median) weekly        (median)   (median) weekly
                     award wage ($)   weekly income       above award
                                                ($)       payment ($)

Occupation

Automotive and                  356             500                55
  Engineering
Construction                    399             441                27
Electrical                      518             652               179
Other trades                    414             502                49

Stage

Stage 1                         274             403                72
Stage 2                         356             400                 0
Stage 3                         484             614                65
Stage 4                         567             672                57

Age

Adult                           517             620               168
Junior                         3S6              464                24

Location

Capital city                    383             503                74
Balance of state                368             500                18
or territory

Size of Business

Under 20                        356             477                19
20 to 99                        518             638               180
100 and over                    383             550                89

Total                           383             500                57

                    Paid up to 110     110%-149% of     150%-199% of
                       per cent of   relevant award   relevant award
                    award wage (%)         wage (%)         wage (%)

Occupation

Automotive and                43.2             20.3             22.5
  Engineering
Construction                  42.4             40.3              6.1
Electrical                    24.4             31.1             19.0
Other trades                  29.1             40.7             18.3

Stage

Stage 1                       22.4             32.7             24.5
Stage 2                       57.6             23.4              8.1
Stage 3                       34.7             40.6             13.8
Stage 4                       38.9             30.8             16.5

Age

Adult                         19.2             38.9             22.0
Junior                        42.1             28.5             15.7

Location

Capital city                  30.0             36.8             16.9
Balance of state              43.2             25.0             17.8
or territory

Size of Business

Under 20                      42.2             32.1             15.6
20 to 99                      25.7             28.7             24.9
100 and over                  33.3             30.0             19.4

Total                         36.3             31.1             17.3

                      200% or more
                       of relevant
                    award wage (%)

Occupation

Automotive and                14.0
  Engineering
Construction                  11.1
Electrical                    25.6
Other trades                  11.9

Stage

Stage 1                       20.4
Stage 2                       11.0
Stage 3                       10.9
Stage 4                       13.8

Age

Adult                         19.9
Junior                        13.7

Location

Capital city                  16.4
Balance of state              14.1
or territory

Size of Business

Under 20                      11.1
20 to 99                      20.7
100 and over                  17.3

Total                         15.3

Note: the award wage calculations take into account the small
number of part-time apprentices but do not take into account
overtime hours for full-time apprentices or any penalties that
may be payable for shiftwork or overtime hours. Stage is
calculated in EFT years of duration of employment in their
current job. Part-time apprentices are assumed to progress at
half the rate of full-time apprentices. Apprentices with an EFT
duration of greater than 4 years are grouped with Stage 4.

Source: 2009 Survey of Education and Training, various awards

Table 3: Trainee Award Over-payment by Characteristics

                           Average         Average           Average
                   (median) weekly        (median)   (median) weekly
                    award wage ($)   weekly income       above award
                                               ($)       payment ($)

Adult                          501             761               207
Not adult                      269             380                60
Existing worker                501             750               167
Not existing                   437             450                94
  worker
Males                          501             700               216
Females                        483             450                60
All trainees                   483             550               105

                   Paid at award     110%-149% of     150%-199% of
                        wage (%)   relevant award   relevant award
                                         wage (%)         wage (%)

Adult                       22.7             25.6             24.8
Not adult                   18.7             43.9             24.7
Existing worker             16.5             27.9             28.2
Not existing                23.8             38.5             22.4
  worker
Males                       12.8             26.1             37.4
Females                     27.4             40.9             14.3
All trainees                20.8             34.2             24.8

                     200% or more
                      of relevant
                   award wage (%)

Adult                        26.9
Not adult                    12.8
Existing worker              27.4
Not existing                 15.3
  worker
Males                        23.7
Females                      17.4
All trainees                 20.2

Note: An adult is defined as 21 years or older when they started
their current job; an existing worker is defined as one whose
current job duration is greater than or equal to 24 months.

Source: 2009 Survey of Education and Training, various awards.
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Author:Oliver, Damian
Publication:Australian Bulletin of Labour
Article Type:Abstract
Geographic Code:8AUST
Date:Jun 1, 2012
Words:6208
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