I have been overseas from late January and returned 29 March, last Friday. The last five weeks were spent at Wat Pah Nanachat in Thailand doing mindfulness of breathing. If meditation is a relatively unknown topic for you, there are two reasonable articles on it here and here. When I was at the monastery I wrote out a simple guide on meditation which is what I would tell myself if I was starting again from the beginning

On Friday a good question came in from Dianne O’Hanlon about apprentice wages:

“Discussion is currently taking place regarding the minimum wage. I believe it is time for Apprenticeship Wages to be challenged. My son was an apprentice motor mechanic 24 years ago at a very low hourly rate. The wages have not improved. My grand-daughter is currently an apprentice hairdresser and at the age of 18 is on $7.46 an hour. No overtime rates – time off in lieu. No wonder young adults these days work at Kentucky Fried Chicken or Hungry Jacks instead of completing a trade. Better wages. Why has nothing been done about Apprenticeship Wages????? Whoever is responsible for setting the hourly rate for apprenticeship wages – you live on $7.46 an hour. Like to see that. Time for a reasonable hourly rate for apprentices and SOON.”

Why has nothing been done about Apprenticeship Wages?

From what I can see the short answer is that nothing has been done about apprenticeship wages because the Fair Work Commission makes a decision every year to not raise the apprentice wage up to the minimum wage.

I base the above statement on the fact that the Fair Work Commission goes through an annual wage review each year (1) and has the authority to set/vary the minimum apprentice wage. We can see that the Fair Work Commission sets the apprentice wage as a percentage of the ‘standard rate’ (2) where the standard rate is defined as Level 3 of the adult minimum wage (3).

The longer answer to the question would have to include the view that raising the apprentice wage has political implications and that the Fair Work Commission does not have the independence to the political process as an institution such as the Reserve Bank does.

We can see the ACTU have been making submissions to the Fair Work Commission to raise the apprentice wage (4), (5) and (6) on what may be an annual basis. We can see that the Minister for Employment and Workplace Relations, Bill Shorten made new appointments to the Fair Work Commission last Thursday (7).

As I have not read the Fair Work Act 2009 I cannot be too sure about the relationship between the Fair Work Commission and the responsible minister. However, since Bill Shorten was the national secretary of the AWU (8) I am confident assuming he would be supportive of increasing the apprentice wage. However, like other members of the Labor Party, he probably has to follow the party line, which follows their polling research. I would simply assume the Labor party will do nothing about this issue until their polling research starts saying they will win more votes than they will lose by making the change.

I have added an ‘Employment Policy’ page to this website which can be found by clicking on ‘housing policy’ and then ‘attorney general’ on the menu above.

I have added the following goal to the employment page, “raise the minimum apprentice wage so that it is at least $100 a week more than the disability support pension”

The basic unemployment benefit is about $248.50 per week (9).

The disability support pension is $356 per week (10).

The first year apprentice minimum wage for an adult is $10.20 per hour which is $388 per week based on a 38 hour week (11).

From the above you can see that an adult on the standard unemployment benefit currently has more incentive to get himself/herself onto the disability support pension than becoming an apprentice, as ethics aside, the easy option is clearly to do no work for $356 per instead of working for 38 hours to only get $32 more.

I have not looked closely at the situation for teenagers, but my position is still going to be that if they are doing the work then they should get paid appropriately. The arguments put forward by the business community (12) trying to justify less than minimum wages for apprentices are pathetic in my opinion and I do not believe there should be any subsidies provided from taxpayers to employers who take on an apprentice. Taking on an apprentice and paying them an appropriate minimum wage should be a good commercial decision if it is not then you do not take on an apprentice. If after a few days or a week you realise the apprentice is completely unreliable and has no potential then you should be free to let that apprentice go, if you cannot then the dismissal laws need to be changed so you can. If your business has enough demand to justify taking on a new apprentice and paying them an appropriate wage then that is what you should do, if your business does not have enough demand then don’t take on a new apprentice. If you don’t have the time to teach a new apprentice how to do his job then do not hire an apprentice, hire a fully qualified person instead and pay the market rate for it.

Cheers,

David Collett 

(1) Fair Work Commission – about annual wage reviews

(2) Fair Work Commission – minimum wages

(3) Fair Work Commission – definitions and interpretation

(4) The Age – Apprentice wages spark union campaign

(5) The Age – Apprentice pay so low, ‘burgers the better option’

(6) ACTU – Unions push for apprentices to be paid a living wage

(7) Ministers Media Centre – New Appointments to Fair Work Commission

(8) Australian Labor – Bill Shorten

(9) Department of Human Services – Payment rates for Newstart Allowance

(10) Department of Human Services – Disability Support Pension

(11) Fair Work Commission – Minimum wages

(12) The Age – Wage rise could hinder apprentices