Labor's education and training strategy: building on false assumptions?

Author:Birrell, Bob
 
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INTRODUCTION

The incoming Rudd Labor Government believes that skill shortages are an important component of Australia's inflationary breakout. The government's leaders have repeatedly asserted that, unlike the departed Coalition Government, Labor will attack the supply side of the inflationary equation. To this end, the government will promote education and training for skilled occupations where shortages are most evident.

The government has so far announced two key policy commitments on the training supply side. First, it will enhance the quality of school education. Second, it will open up new trainee opportunities for young people in the trades area. Under its Skilling Australia for the Future initiative, administered through the Department of Education, Employment and Workplace Relations, funds have been allocated for 450,000 new training places over four years. An initial 20,000 training places will be made available between April and June 2008 for persons wishing to undertake training to upgrade or update their qualifications in areas of skill shortage at the Certificate II, III and IV level. (1)

Until recently, the Rudd Government has been silent on what it will do to increase domestic training at the university level. This stance changed when the Minister for Education and Minister for Employment and Workplace Relations, Julia Gillard, addressed the Australian Financial Review higher education conference on 13 March 2006. She acknowledged that 'over the past decade, Australian higher education has barely stood still in terms of numbers, quality and output, while our competitors have surged ahead'. (2) In support of this contention, she cited various skill shortages, including doctors, teachers and engineers. However, all that was offered by way of a policy response to this situation was the announcement of a Review of Higher Education, which is to report in October 2008.

As indicated, at present, the Labor Government's emphasis is on the Vocational Education and Training (VET) sector, just like the previous Coalition Government. The former Prime Minister, John Howard, repeatedly asserted that parents, educational planners and education providers should focus on trade skills. He claimed that there was excessive emphasis on university education, which he believed was motivated by misguided status aspirations.(3) Reflecting this judgement, the Coalition only marginally increased the number of Commonwealth-subsidised university places for domestic students between 1996 and 2007.

This focus on the VET sector is curious. It has occurred in the face of evidence that we, among others, have collected which shows that the most rapid growth in employment in Australia is amongst professionals, managers and associate professionals, employees who, for the most part, need university credentials as their entry point to these occupations. This rapid growth has occurred at a time when domestic training at university level has been static, a situation that has produced chronic shortages. Such shortages have been alleviated somewhat by a massive increase in the intake of migrant professionals. (4)

This article revisits this disjuncture between labour market demand and policy response via new data on employment levels by industry and occupation over the decade 1996 to 2006. It explores the skill demands of the industries which have dominated employment growth over this decade. This inquiry shows that most of the growth in skilled occupations has been amongst those requiring university credentials. By comparison, the growth in occupations requiring trade or semi-skilled credentials has been far lower.

DATA AND APPROACH

Census data on employment by industry and occupation for 2006 was released late in 2007. The Centre for Population and Urban Research purchased this data in customised form. The Centre holds comparable data for the 1996 census. This allows a comparison of job growth by industry and occupation by location in Australia over the period 1996 to 2006. Job growth refers to the net outcome of new jobs minus any losses in the industry and occupation in question. The 2001 census data on industry proved to be incompatible with that for the 1996 and 2006 censuses, because the Australian Bureau of Statistics (ABS) used a different methodology for determining the industry of respondents in 2001 to that used in the 1996 and 2006 censuses.(5)

JOB GROWTH BY INDUSTRY IN AUSTRALIA 1996 TO 2006

Table 1 shows the share of total job growth by industry group in Australia over the 1996 to 2006 period. There has been little or no growth in the main goods and commodities producing industries--agriculture, mining and manufacturing. Indeed, in the case of agriculture there has been a decline. Since these are the industries usually thought of as important employers of tradespersons, this raises the question--what is the source of the alleged shortage of tradespersons? One answer may be the construction industry, where there was a massive 45 per cent growth in employment over the decade. To explore this issue requires an analysis of the occupational makeup of changes in employment by industry. We begin with the trade issue before exploring the sources of demand for other forms of skilled labour, particularly professionals.

Table 1: Rate and share of job growth by major industry, Australia, 1996 to 2006 1996 2006 Agriculture, foresty and finishing 323,936 285,528 Mining 86,117 106,327 Manufacturing 964,570 998,259 Electricity, gas and water 58,913 70,990 Construction 484,300 704,840 Wholesaling 446,776 434,174 Retailing 1,036,385 1,300,223 Accommodation, cafes and restaurants 355,199 433,413 Transport and storage 331,895 403,377 Communications 150,313 131,991 Finance and insurance 296,273 346,822 Property and business services 750,190 976,297 Government administration and defence 373,488 493,484 Education 539,907 678,275 Health and Community services 725,219 976,408 GEH subtotal (a) 1,638,614 2,148,167 Cultural and recreeation services 178,781 200,531 Person and other services 277,893 323,845 Total 7,635,036 9,101,956 change Change Share of 1996-2006 1996-2006 additional as percent jobs of 1996 Agriculture, foresty and finishing -38,408 -11.9 -- Mining 20,210 23.5 1.4 Manufacturing 33,689 3.5 2.3 Electricity, gas and water 12,077 20.5 0.8 Construction 220,540 45.5 15.0 Wholesaling -12,602 -2.8 -- Retailing 263,838 25.5 18.0 Accommodation, cafes and restaurants 78,214 22.0 5.3 Transport and storage 71,482 21.5 4.9 Communications -18,332 -12.2 -- Finance and insurance 50,549 17.1 3.4 Property and business services 226,107 30.1 15.4 Government administration and defence 119,996 32.1 8.2 Education 138,368 25.6 9.4 Health and Community services 251,189 34.6 17.1 GEH subtotal (a) 509,553 31.1 34.7 Cultural and recreeation services 21,750 12.2 1.5 Person and other services 45,952 16.5 3.1 Total 1,466,920 19.2 100.0 Source: ABS, customised 1996 and 2006 census datasets held by CPUR Note: (a) Government administration and defence, Education, Health and community services combined INDUSTRY CHANGE AND THE EMPLOYMENT OF TRADESPERSONS

Table 2 allows an investigation of the source of growth in employment of persons in trade occupations by industry. The construction industry is distinctive among industries that employ a high proportion of tradespersons. It is growing rapidly and a major share of the additional construction workforce consists of tradespersons. Table 2 indicates that some 92,338 of the total 220,540 overall growth in construction industry employment between 1996 and 2006 was for tradespersons. By contrast, employment in Australia's manufacturing industries grew by just 20,210, and only 370 of this growth comprised tradespersons.

Table 2: Change in number of tradespersons by industry group and by state/territory 1996 to 2006 Tradespersons NSW Vic Qld Agriculture, forestry and fishing -250 -371 -407 Mining -921 514 1,320 Manufacturing -6,144 -5,321 9,531 electricity, gas and water 193 3 1,371 Construction 16,233 26,809 25,729 Wholesaling -3,817 -1,357 -63 Retailing -1,320 -428 3,690 Accommodation, cafes and restaurants -90 1,467 651 Transport and storage -347 33 665 Communication services -2,926 -1,853 -1,528 Finance and insurance -367 -236 60 Property and business services 972 597 1,772 Government administration -466 -986 -201 Education -597 -586 -285 Health and community services 23 -284 255 Cultural and recreation services 595 954 356 Personal services 3,750 3,740 3,199 Non-classifiable economic units 836 -591 697 Not stated and inadequately described 1,465 1,721 528 Total 6,795 23,825 47,3401 Tradespersons SA WA Tas NT Agriculture, forestry and fishing -255 -689 -66 64 Mining 590 2,093 -139 -191 Manufacturing -1,462 3,447 8 209 electricity, gas and water 64 22 317 -56 Construction 7,564 13,325 1,214 185 Wholesaling -665 -591 5 -2 Retailing 680 515 -79 136 Accommodation, cafes and restaurants 139 366 125 -3 Transport and storage -261 235 -61 12 Communication services -436 -558 -156 -125 Finance and insurance 23 29 12 5 Property and business services -140 629 -47 100 Government administration -200 83 -76 736 Education -367 -419 -300 -61 Health and community services 63 -15 -46 -49 Cultural and recreation services 13 56 31 68 Personal services 931 1,093 269 67 Non-classifiable economic units 90 746 320 22 Not stated and inadequately described -1,043 -524 -442 -89 Total...

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