The federal government will be forced to reveal its hand on forcing businesses to pay apprentices higher wages to improve their retention rate when a report from Fair Work Australia is released today.
Fair Work Australia president Iain Ross will release the background paper on the implications by lifting wages for apprentices and junior employees. It is part of an overall review of the award system.
Unions have applied to raise the pay of about 200,000 adult apprentices to the minimum wage in their industry, along with an application for the adult wage to be paid to 20 year olds instead of it starting at 21.
The unions, led by the Electrical Trades Union, argue a pay rise is vital to boost the completion rate for adult apprentices, which they say is only about 60 per cent, but employer groups say the move could backfire.
Workplace Relations Minister Bill Shorten has said existing low wage rates have to be addressed, but a balance is required so it does not become too expensive to train apprentices.
The ETU has been lobbying Mr Shorten and Skills Minister Chris Evans to have apprentice wages increased and both have given tentative support.
The ETU argues today’s apprentices often have completed high school and have a driver’s licence, while in the past they were 15 or younger when they started work.
“It’s little wonder that four in 10 apprentices don’t complete their training,’’ ETU national secretary Peter Tighe said.
“It’s almost impossible for them to survive on the wages they receive. Australia is headed into a multi-decade resources boom and unless we boost wages and apprentice completion rates, there will be a chronic shortfall of skilled electricians,” Mr Tighe said
The ACTU congress last week passed a resolution seeking to ensure the wages were lifted. But employer groups say higher wages could reduce training places.
“Australia needs to do everything possible to encourage more businesses to employ apprentices, particularly in the many trades necessary to secure a strong a productive economy in the future,” Australian Chamber of Commerce and Industry chief executive Peter Anderson said.
“Employers generally report that, particularly in the first year or two of an apprenticeship, the cost of the apprenticeship exceeds the productive benefit of the employee,” Mr Anderson said.
“This is especially true of the licensed trades, such as apprentice electricians, where there are strict limitations on unsupervised work.”
The ETU says a first-year electrical apprentice is paid as little as 40 per cent of average weekly earnings, or $225.04 per week, or $11,700 a year.
Half of all apprentice electricians are over the age of 20, and a quarter are over the age of 25, they said.
By PIP FREEBAIRN AND MARK SKULLEY
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