Do Non-Grads Earn More?

The age-old debate over degrees versus apprenticeships continues to rage, sparked by new insights by National Electrical and Communications Association.

Australia’s peak body for electrical employers has claimed that doing an apprenticeship after year 12 is more profitable than going to university.

The controversial claims by the National Electrical and Communications Association were backed by evidence that a newly licensed electrician would be $200,000 better off than a new graduate in the year after each had completed their studies.

The NECA trains roughly one-third of Australia’s electrical apprentices. Each of these apprentices earns about $160,000 during their four-year course, and pays no tuition fees. They then go on to earn between $58,000 and $91,000 in their first year of work.

By contrast, the average university graduate would not earn while learning, unless they had a part-time job, and owe at least $20,000 in student loan debts at the end of a four-year course. In their first year of work they would earn an average of $40,000, after subtracting student loan repayments.

That means that a licensed electrician would have earned $240,000 at the end of their first year at work, in contrast to the graduate’s $40,000.

NECA chief executive, Suresh Manickam, also pointed to the skills shortage in the trades, which would also benefit a recently licenced electrician’s job prospects. According to NECA, 99% of electrical apprentices found jobs when they completed their course.

Despite this great news for those who prefer trades apprenticeships, a major Australian University group has hit back against the claims. Universities Australia has argued that Australia needs both tradespeople and university graduates to power our economy.

UA chief executive, Catriona Jackson, said she was disappointed at NECA’s “rubbishing” of the value of university education, and said it was neither accurate nor helpful to young people who are trying to decide on their futures.

Jackson’s stance was backed by a spokesman from the Grattan Institute, who said the advice given by NECA reflects early-stage career benefits rather than long-term advantages.

While electricians tend to earn more than graduates while both are in their 20s, electrician earnings tend to plateau in their 30s and 40s. By contrast, the earnings of graduates tend to continue increasing, eventually superseding their counterparts in the trades.

Data taken from the Australian Bureau of Statistics also supports this claim, showing that the median salary of someone with a bachelor’s degree is $245 higher per week than someone with a vocational qualification. And the median salary of someone with a postgraduate degree increases to $465 more per week than the vocationally qualified person.