Why do TAFE graduates earn more than uni graduates?

by Brett Henebery22 May 2017
A new report reveals that TAFE graduates not only have higher starting wages than university graduates, but also find work more quickly, on average.

The report, titled: ‘Perceptions Are Not Reality: myths, realities & the critical role of vocational education & training in Australia’, was released by the Skilling Australia Foundation (SAF) today.

SAF CEO, Nicholas Wyman called on Australia to raise the status of skilled education, address youth unemployment and disengagement and to ensure people graduate from our educational institutions with real-world workplace skills.

Nicholas Wyman, SAF CEO, said the report was a call to action for Australia’s vocational training industry.

“No two people are the same, nor will they travel the same path. We all have different learning styles, interests and talents,” Wyman said in a statement.

“With skills-based career development, young Australians can pursue an individual passion while gaining the knowledge and experience to build a rewarding career.”

The report also found that in comparison with university undergraduate programs, vocational education usually provides students with a faster, more cost-effective pathway to complete a qualification and enter the workforce.

“Australia’s VET sector, far from preparing students for low-skilled, low-paid or low-future work, produces highly skilled graduates with remuneration and employment outcomes comparable to – and sometimes surpassing – those of university graduates,” Wyman said.

He pointed to SAF’s research which reveals that VET graduates have:
  • higher starting salaries than university grads, on average ($56,000pa vs. $54,000)
  • are in employment in higher numbers then university grads (78% vs. 68%)
  • the graduate employment rate of trade apprentices upon completion is as high as 92%.”
He also pointed out that “there remain jobs for the taking” through studying VET sector qualifications.

“VET provides training courses for 9 out of the 10 occupations forecast to grow the most over the next five years,” Wyman said.

During 2015–2016, the biggest labour shortages were for technical and trade workers; more than one third of vacancies in the construction, food production and automotive trades went unfilled.

“Public perceptions surrounding the vocational education sector are widely out of step with the reality of the sector” Wyman said, adding he believes the VET sector is the key to future-proofing Australia’s economy.

“Political and business leaders often bemoan Australia’s perennial social and economic problems, but it is clear the VET sector can play a significant role in resolving them.”

Wyman said the report shows there is currently “an array of respectable, well-compensated, upwardly mobile careers” that don't require a university education.

These jobs, he says, exist in progressive, fast-growth industries, such as healthcare, bio-tech and cyber security, agriculture, information technology and service industries, such as tourism and hospitality.

“Unfortunately, vocational study has a history of being seen as less respectable than attending university. This must change,” he said.

The report follows a pledge by the Federal Government to create the Skilling Australians Fund, which will provide $1.5bn towards trainees and apprentices over the next four years.

Federal Treasurer, Scott Morrison, said the ongoing fund will be “a new approach”, providing long-term certainty of funding and requiring states to match funding to support apprenticeships.