Modern Apprentices: Background Paper

Introduction
The Modern Apprenticeships (MA) scheme is a flagship Government initiative aimed at rebuilding trades training for young people in New Zealand. It provides young people with work-based training towards nationally-recognised qualifications. The 2006 Budget speech noted “the most important contributor to economic growth in a modern economy is human capital” and then detailed increased investments in education and training. One key component was $34.4 million over 4 years allocated to expand MA numbers to 14,000 by December 2008.

The MA programme is intended to address skills shortages and equip young people with skills and qualifications. It is also aimed at improving employment outcomes for women (and other groups including young people, Māori, Pacific peoples, migrants and ethnic communities). This prioritisation, reflected in the rising level of public funding for the MA scheme, heightens the importance of ensuring the policy design meets both its equity and efficiency objectives.

Women remain very significantly under-represented in the MA scheme, comprising just over one in every twelve Modern Apprentices (MAs). Pacific peoples also continue to be under-represented, making up only 2.8% of all MAs. This is despite the requirement in section 17(c) of the Modern Apprenticeship Training Act 2000 that MA Coordinators “have particular regard to the needs of Māori, the Pacific Islands people of New Zealand, people with disabilties and women”. Māori comprise 14.1% of all MAs, which roughly equates with the proportion of the working age population that is Māori. There is no publicly available data on disabled people’s participation within the MA scheme.

The EEO Commissioner first raised concern about women’s low participation in the MA scheme in a 2003 discussion paper, Modern Apprenticeships: Training for the boys? published by the Human Rights Commission. At that time women comprised just 6.6% of all MAs. The 2003 report contained twelve recommendations covering actions required by industry, MA Coordinators, government agencies and schools. As this report was published women were 8.5% of Modern Apprentices. Statistics on women’s participation across each MA industry are attached as Appendix 3. They provide some indicaton as to whether progress has been made since June 2003.

The rationale for change

There are both social justice and business case reasons for promoting the greater inclusion of women in the MA programme. The social justice argument respects the freedom of human beings to develop their capabilities and to choose and pursue their professional and personal aspirations to their best ability. If individuals are denied equal opportunities, they are restricted from developing their skills and competencies and from receiving the full rewards associated with paid work.

The social justice case is strongly linked to the current debate about pay equity and the gender pay gap in New Zealand. Of the eight major issues identified as contributing to the gender pay gap, one is particularly relevant to the lack of women’s representation in the Modern Apprenticeships scheme. This is occupational segregation – the jobs that women do and how jobs are valued. In New Zealand, 20 to 40 percent of the gender pay gap has been attributed to occupational segregation, with women clustered in a relatively narrow range of traditionally female-intensive lower-paying occupations. Clearly increased opportunities for women in non-traditional work and greater uptake of work-based trades training would help reduce the high level of occupational segregation. This issue has been consistently raised by the New Zealand trade union movement. In a June 2006 speech CTU Secretary, Carol Beaumont told female fire fighters:

“There is an urgent need to transform the world of work. Measures of success must include the extent to which there is equality of participation and outcomes. The New Zealand Council of Trade Unions believes that a strong labour market cannot be built on foundations of structural disadvantage. The paid work that many women do is still undervalued – and workplace cultures and practices are often impervious to the diverse needs of women workers. We do need to get more women into non-traditional work which often provides better pay, conditions and career opportunities.”

As noted in the 2003 ILO Global Report Time for Equality at Work, education and skills “act as a powerful device to overcome unproductive, volatile, low-paid and low-status work in which groups that are discriminated against are often clustered. From a society’s perspective, the benefits derived from more productive and more responsible citizens may surpass private returns”.

The business case relates to the waste of human talent and resources which has negative effects on productivity, competitiveness and the economy in general. At a practical level the business case has recently attracted publicity through the release of a business report on the skills gap. Business NZ, representing 76,000 employers covering 80% of private sector employees, states that improving New Zealand’s skills deficit and addressing skills shortages are essential to economic performance relative to comparable countries. In relation to training and apprenticeships generally, Business NZ states that increasing the number of new skilled workers will help with skills shortages although the lead-in time is usually several years. It supports the Government’s commitment to a target of 250,000 people in industry training or apprenticeships as soon as possible but supports a different funding regime. It states:

One way of achieving the target in training and apprenticeship would be to remove or raise the funding cap for this art of the education system, since trades training is the only part of the higher education system that is not demand-driven. It does not make sense to limit the number of builders or plumbers that can be trained while
allowing unlimited places in university arts courses. Funding for academic courses is through a formula called the EFTS/Student Component. Funding for trades course is through a formula called Standard Training Measure funding. These two funding streams should be put on a more equitable basis.

However, reforms announced by the Tertiary Education Minister on 27 July 2006 signal that tertiary education as a whole is moving away from being a demand-led system. Instead, from the beginning of 2008, funding will be based on three-year plans agreed between education providers and the Tertiary Education Commission, with student numbers comprising just one component of the overall funding formula.

Overseas Developments

In the United Kingdom, improving women’s access to MAs has been identified as necessary to address ccupational segregation and its impact on the gender pay gap. In March 2005, after a two year investigation, the Equal Opportunities Commission produced a detailed report, Free to Choose – tackling gender barriers to better jobs. Phase 1 of that investigation verified acute skills shortages in traditional male-dominated trades. Phase 2 then established there is a broad UK consensus supporting wider occupational choices for girls and boy. That commitment is reflected in subsequent government research on pay rates for apprentices, which illustrated how the acute level of occupational segregation by gender reinforces the gender pay gap.

These concerns are reiterated in the UK Women and Work Commission’s February 2006 report Shaping a Fairer Future. The Commission was set up by government in 2004 to consider ways to close the gender pay and opportunities gap within a generation. Occupational segregation, alongside the impact of family responsibilities and unequal pay, were the three core issues identified. The Commission specifically noted the importance of removing barriers to women in occupations traditionally undertaken by men. Many of their recommendations are relevant to New Zealand’s MA scheme, for example:

working with employers on providing and promoting apprenticeships for women in industries where there are skills shortages

making reduction of gender segregation a component of plans for tackling skills shortages in relevant sectors such as construction (including those related to the 2012 Olympic games)

ensuring young people have access to careers information which gives a real understanding of the pay, rewards and challenges of occupations, particularly those not traditionally taken up by their gender

Government information campaigns should show women in occupations not traditionally taken up by them, and men as parents and carers

further pilots of adult apprenticeships, with a particular focus on women returning to paid employment

the promotion of Young Apprenticeships to 14–16 year olds in occupations not traditionally taken up by their gender

employer visits to schools and ‘taster’ days for primary school pupils

work experience placements for pupils pre-14 years in an occupation not traditionally undertaken by their gender

careers education coordinators in schools to organise the provision of group visits, ‘taster days’ and work experience

In Australia, publicity material for their New Apprenticeships (NA) scheme profiles success stories from female apprentices and their employers. Australia has placed a higher priority on increasing women’s participation by extending the breadth of industries covered by the NA scheme. As a result, while the number of women starting apprenticeships or industry training has risen significantly, there has only been a slight increase in the proportion of women within traditionally male industries and occupations.

International Conventions

Since the inception of the MA scheme, there have been concerns that it may replicate the gender bias of the traditional apprenticeship system. This is despite both international and national obligations to ensure women have equal access to vocational training opportunities.

New Zealand is party to the 1995 Beijing Declaration and Platform for Action which sets goals for the global advancement of women. This covers women’s access to vocational training, particularly in non-traditional fields. Strategic Objective B3 focuses on improving women’s access to vocational training, science and technology and continuing education. Action 82 includes the recommendations to:

“provide information to women and girls on the availability and benefits of vocational training” – Action 82 (c)
“diversify vocational and technical training and improve access for and retention of girls and women” – Action 82 (e) and
“take positive measures to promote training for the full range of occupational choices of non-traditional careers for women and men” – Action 82(g)

ILO Convention 111 Discrimination (Employment and Occupation), which has been ratified by New Zealand, requires a national policy designed to promote equality of opportunity and treatment, including access to vocational training.

The Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) is the principal international convention promoting equality for women. Article 11(1)(c) of this convention includes “the right to receive vocational training and retraining, including apprenticeships” on an equal basis with men. The EEO Commissioner’s 2003 report cited questions raised by the United Nations Committee monitoring the New Zealand Government’s fifth periodic CEDAW report.16 Specifically the Committee asked whether the Government had “considered an approach which would endeavour to make the sectors currently targeted by Modern Apprenticeships Coordinators more appealing to women”

In March 2006 the NZ Government submitted its sixth periodic CEDAW report to the United Nations. That follow-up report acknowledges that “women’s uptake of Industry Training and Modern Apprenticeships continues to be considerably lower than men’s” citing September 2005 data showing women comprised just 8% of all modern apprentices.

Appendix 4 of the Government’s CEDAW report depicts the relationship between CEDAW and New Zealand’s Action Plan for New Zealand Women (published in March 2004). It lists ‘changes to the Modern Apprenticeships Scheme’ as one of the actions which will help to meet NZ’s obligations under the Convention. The four key steps and related milestones set out in that Action Plan are attached as Appendix 2.

From December 2003 onwards, MA Coordinators’ contracts were to contain a stronger emphasis on encouraging and supporting the participation of under-represented groups. A 2005 evaluation of the MA scheme by the Tertiary Education Commission (TEC) was also designed to identify what impact, if any, the programme has had on young Māori, Pacific peoples, and women pursuing a trades pathway.

The Ministry of Women’s Affairs conducted interviews with MA Coordinators as part of the TEC evaluation of the scheme. In addition, they have commissioned some indicative data on pay rates and training costs for apprentices in male-intensive and female-intensive trades, to be completed in 2006.

Despite these efforts, updated TEC data shows there continues to be very slow progress in diversifying uptake of the MA scheme, particularly in expanding women’s occupational choices.

Women’s Participation – 2006

As at 31 March 2006, there were 8,838 MAs, a 14% increase in the year since 31 March 2005. Appendix 3 lists data on female and male participation in MAs, by industry, since the EEO Commissioner’s 2003 report. Over that period the proportion of MAs who are female has increased from 6.6% to 8.5%.

Since June 2003, there has been some progress in increasing women’s overall participation in MAs, with female apprenticeship numbers rising from 381 to 747. However, these 366 additional MAs comprised just 11.8% of the additional 3,099 MAs over this time period. If the five sectors where women currently make up at least a third of all MAs are omitted (tourism, public sector, retail, hospitality and seafood18) the slow progress for women becomes even clearer. Between June 2003 and March 2006, an extra 2,706 MAs were enrolled in those remaining 26 industries. Yet only 5.5% of those MAs were female.

Most Modern Apprenticeships remain concentrated in the traditionally male apprenticeship industries. In twenty five of the thirty two industries covered by the MA scheme, at least three quarters of the MAs are male.19 Only in two of the industries do women make up a significant majority of MAs (the public sector and tourism).

Occupational segregation persists, with female apprentices continuing to work in very different industries than men. Half of all MAs remain concentrated in four industries (engineering, building and construction, motor engineering and electro-technology).

Those industries employ 53.6% of male MAs yet only 6.8% of female MAs. In contrast, 55.3% (413) of all female MAs work in four other industries – the public sector, hospitality, horticulture and agriculture. Once tourism, retail and baking industry figures are added, these seven industries account for over three quarters of all female MAs. Occupational segregation is one of the major factors contributing to the gender pay gap. Overseas research also suggests that apprenticeship completion rates are often considerably lower in female-intensive service industries, partly due to the higher turnover and lower wages in these sectors.

There have been a few industries where there has been a sizeable increase in both the number and proportion of female MAs since June 2003. These are contracting, forest industries, road transport, seafood and tourism. In some cases these industries still have only a very small number of female apprentices.

Women and Modern Apprenticeships Reference Group

Given the slow rate of progress, the EEO Commissioner established a Women and Modern Apprenticeships Reference Group in 2005 which has met regularly since then. It includes qualified tradeswomen, educators, trade unionists and other women wanting to improve the diversity of the MA scheme.

The Reference Group aims to:

persuade key stakeholders to develop and implement policy and practices that improve women’s participation in the Modern Apprenticeships Scheme
promote women as role models within the Modern Apprenticeships Scheme and to supportcurrent and potential female Modern Apprentices
provide a forum for information-sharing about best practice initiatives and
monitor and benchmark increased female participation in the Modern Apprenticeships scheme

The Reference Group has worked with Industry Training Organisations (ITOs) to interview female MAs and their employers in a range of male intensive industries and occupations. A series of profiles with female Modern apprentices and employers who have taken on young women, developed by the Human Rights Commission, are included in the front of this report.

These aim to:

encourage young women to try different types of work and
give voice to employers who have given women opportunities, acknowledging the benefits of female Modern Apprentices.

How much do apprentices earn?
There are no official statistics on the average pay rates that apprentices receive in different trades. This is because income and earnings data provide average rates covering everyone working in a particular occupation. These pay rates will be higher than apprentice starting rates, and lower than the pay received by experienced qualified tradespeople (especially in areas where there are skills shortages). Some indicative information on pay rates was obtained from:

the employers and young women interviewed for this project
phone calls to other employers in these industries
the Kiwi Careers website and
some limited data from the Employer and Manufacturers Associations’ annual wage and salary survey

What young women are earning now

Pay rates for new apprentices range from the minimum training rate through to about $15 an hour for someone who has already done a pretrades training course or worked in the industry. Most apprentices tend to earn between $8.50 and $12.00 when they start, and the hourly pay rate then increases during their apprenticeship. Typically an employer reviews their apprentice’s progress every six months and they negotiate a salary increase. In some unionised industries and workplaces, wage rates for apprentices are covered by collective employment agreements. This may be set out in salary ‘steps’, which are regular pay increases an apprentice will earn as long as their work is satisfactory. Otherwise the pay rate depends upon individual negotiations between the apprentice and their employer.

Currently, most people nearing the end of their apprenticeship would be earning between $14 and $18 an hour. These rates vary across industries, sectors and regions. For example, a qualified builder in Auckland could be earning more than $20 an hour before the end of their apprenticeship. Pay rates tend to be lower in provincial areas.

Employers usually pay for time off to attend block training courses and may also supply tools and pay for training costs. If the apprentice pays for their own hand tools, the employer may provide tool money.

What young women said about pay

Many of the women interviewed said pay rates depended on being able to speak up:

"If you don’t ask, you don’t get."
"You never get anything if you don’t ask. "

One interviewee suggested apprentices did not have a lot of say in negotiating their pay rates:

"I guess it’s just what your boss wants to put you on, really."

Another female MA linked wage increases to skills learnt during the apprenticeship:

"Depending on your business, the more you learn, the more you’re worth."

Many young women said that the way to get ahead was to go into business for themselves:

"If they want to earn lots and lots of money, they’d need to have a big company or be the boss."

What these young women can expect to earn

Table 1 lists approximately how much the women we interviewed could expect to earn if they were about to finish their apprenticeship. This information is only indicative, based on pay rates supplied by the sources already listed above. Hourly rates are often lower in regional areas. The higher annual incomes listed are likely to include overtime and callout rates, which can be significant in industries where there are labour shortages.

Table 1. Earning power
Occupation	Expect to earn once qualified: Per Hour	Expect to earn once qualified: Per Year
Panel-beater	$18-$25	$50,000
Electrician	$18 to $25	$50,000
Metering Technician	$18-$25	$40,000 - 50,000
Mechanic	$18-$25	$40,000 - 50,000. EMA 2005 data: Basic pay $38,589
Signwriter	$18-$25	$40,000 - 50,000
Glazier	Up to $20	$40,000
Joiner	$18-$25	$40,00 - 50,000 EMA 2004 data: Basic pay $40,442
Builder	$18-$35	$50,000 - $70,000

It’s a good time to start an apprenticeship

There are skill shortages in many trades which means plenty of work. As the following news report shows, in some trades this has meant much higher pay rates for some apprentices, especially those with specialist skills.

Skills shortage sees apprentices earning up to $100,000

Specialised building apprentices are starting work on wages of up to $100,000 due to labour shortages says the registered Master Builders Federation. Chief executive Pieter Burghout said wages are rising due to the shortage of highly skilled labour and builders who had just finished apprenticeships were earning up to $60,000 for an average 50-hour week. One apprentice he knew of, just out of a four-year training programme, started on $100,000. The trainees were often in their early 20s and the pay rates reflected the desperate skills shortage as well as the high demand for their time.

“The chippie has gone from being the lowest on the heap to the top.” Burghout said builders who were asking $35 an hour three years ago were now demanding $60 or more.

- NZ Herald, 14 June 2006

Interested in learning more about Modern Apprenticeships?

In order to qualify for a Modern Apprenticeship, you must be:

Between 16 and 21 years old when you start your Modern Apprenticeship
– Older people can sometimes be eligible if they are wanting to change their career
Able to meet any entry requirements of the industry or business where you would like to work and train.
– These entry level requirements vary from industry to industry.
– For more information, contact a Modern Apprenticeships Coordinator in your area.
Able to start working and studying towards an industry qualification.
– An apprenticeship starts on level 1 and works towards a National Certificate at levels 3 and/or 4.

APPENDIX 1

Recommendations from the 2003 HRC Discussion Paper

Recommendations
1. Work with Modern Apprenticeships Coordinators in developing strategies to encourage the recruitment of young women, Māori, Pacific people and people with disabilities into Modern Apprenticeships as supported by Section 15 of the Modern Apprenticeship Training Act 2000.

2. Encourage the Government to promote Modern Apprenticeships to parents as a pathway for young women, Māori, Pacific people and people with disabilities in any industry.

3. Support current industry initiatives (Industry Training Organisations & industry representatives) regarding the recruitment of young women, Māori, Pacific people and people with disabilities through secondary schools for Modern Apprenticeships.

4. Encourage the Tertiary Education Commission to make reporting against targets for more diverse participation, a contractual requirement for Modern Apprenticeships Coordinators as supported by Section 13(1) of the Modern Apprenticeship Training Act 2000.

5. Ask the Tertiary Education Commission to ensure prospective Modern Apprenticeships Coordinators undertake training in diversity and gender awareness before undertaking coordinator roles.

6. Work with “champions” of equity issues within Industry Training Organisations to provide ideas, “role models” and best practice for reducing barriers to participation.

7. Support the provision of incentives, including financial incentives, for the recruitment of

8. Support the Industry Training Federation (ITF) in its continued “show-casing” of case studies addressing equity issues.

9. Support a review of the funding criteria for Modern Apprenticeships so that it aligns with the intentions of the Industry Training Act 1992, Section 13b, which specifically encourages the promotion of training to people to whom such training has not traditionally been available.

10. Ensure that information and marketing of the Modern Apprenticeships scheme is relevant to community groups that focus on employment issues for women, Māori, Pacific Peoples, ethnic minorities and people with disabilities.

11. Encourage the Associate Minister for Education (Tertiary Education), who has responsibility for the Modern Apprenticeships scheme to lead initiatives to increase participation rates of diverse groups.

12. Encourage relevant Government departments to increase the number of public sector apprenticeships of women, Māori, Pacific people and people with disabilities.

APPENDIX 2

New Zealand's Action Plan for New Zealand Women (March 2004)

Actions	Lead Agencies	Milestones
Explore ways to increase women’s participation in Modern Apprenticeships in industries where women are not well represented	Tertiary Education Commission with the Department of Labour, Ministry of Education and Ministry of Women’s Affairs	Contracts revised and in force by 2004
Strengthen the contract with Modern Apprenticeships coordinators to improve the promotion of apprenticeships to women		Review proposals from ITOs and report back to the Ministers of Women’s Affairs, Ma- ori Affairs, and Pacifi c Island Affairs by November 2005
Work with Industry Training Organisations (ITOs) to break down barriers to women’s participation in Modern Apprenticeships		Access to information reviewed by June 2004
Review access to information on Modern Apprenticeships for members of the public to ensure the needs of under-represented groups are met

Appendix 3, Industry by Gender June-2003-March 2006 (Based on TEC data) is available by downloading Give Girls a Go! as a PDF file.

Download.

Appendix 4

Background information on the MA Scheme

The Modern Apprenticeship Training Act 2000 came into effect on 1 January 2001, with Modern Apprenticeships (MAs) launched in July that year. The scheme was a government response to skill shortages and the low numbers of young people in industry training.

MAs are primarily designed for young people aged 16-21 years and combine a job and workplace training with mentoring and support. In some circumstances, a limited number of people aged over 21 years are able to access Modern Apprenticeships.

MA Coordinators recruit and place apprentices, develop an individual training plan and support the apprentice through their training. MA Coordinators can be ITOs, tertiary education providers, community trusts or private individuals. MA qualifications typically take three to four years to complete and more than 2,000 Modern Apprentices have completed their qualfication since 2001.

There are two funding components for Modern Apprenticeships. Like all forms of industry training, ITOs receive a quarterly payment based on the number of MAs that they are supporting. The additional funding available for MAs is the quarterly payment made to the MA Coordinator for each of their MAs. By 2008/09 funding for Modern Apprenticeships will have increased to over $50 million.

Table 2: Growth in Modern Apprenticeships Fundng (All figures GST exclusive)

Year	Funding (GST Excl.)	Extra numbers and targets
2001/02	$6.73m
2002/03	$20.38m
2003/04	$20.38m
2004/05	$26.26m	Budget 05: +500 June 2005 Review: +2000
2005/06	$30.69m
2006/07	$40.29m
2007/08	$47.40m	December 07 target: 11,000
2008/09	$50.96m	December 08 target: 14,000