Magazine article IPA Review

Why Training Isn't Working

Magazine article IPA Review

Why Training Isn't Working

Article excerpt

THE best form of social welfare any nation can deliver to its people is sustainable work. When unemployment is high, the plethora of government-funded and charitable programs directed to the poor can at best only provide a patch-up service: the real need is for jobs.

As long as Australia's high level of structural unemployment persists, any claim by the Government to be delivering social justice is a sham designed to hide the failure of employment-creation policies. The Federal Government's Green Paper, Restoring Full Employment, optimistically saw unemployment at five per cent in 2001. Other commentators believe that 7.5 per cent is a more realistic figure, and even this is based on the assumption that there won't be another major economic downturn before the turn of the century.

For policy-makers to resign themselves to such a high level of structural unemployment is morally indefensible. Any government faced with this situation has a duty to expose its policies to critical analysis and to remove institutional and structural barriers to employment creation.

This article focuses on one area of employment reform, work-related training. The total annual government expenditure on vocational education and training is around $2.5 billion. What results are being achieved?

SKILLS SHORTAGE: In the industrial estates of metropolitan Melbourne, there is a shortage of skilled tradespeople. Positions for skilled welders and sheetmetal workers go unfilled. People claiming to have welding expertise turn up for job interviews, but when tested on the factory floor with a blowtorch in hand, their abilities are below the required standards. The hourly rates on offer are above the award -- in the order of $16 as a starting wage -- and plenty of overtime is usually available, resulting in gross weekly pay of between $900 and $1,000. Yet positions go unfilled. As a consequence, companies are frequently unable to respond to demand and potential sales go unrealized. Companies targeting the export market are often the most pressed.

Surprisingly, the textile and clothing industry also suffers from a skills shortage. Most people think that this industry died following the removal of tariff protection. Yet new trends seem to be emerging, although admittedly at this stage the evidence for them is anecdotal. Dotted through the old industrial, but now trendy, suburbs of Melbourne are clothing factories that have survived the shrinking of the industry. They are lean and most often oriented towards niche markets. Many have a substantial trade in resewing cheap imported clothing which has landed in Australia but is unsaleable due to poor quality (buttons fall off and stitching comes undone). These clothing manufactures operate on tight margins. The wages on offer are usually only at award rates, providing minimal inducement to prospective workers. Yet jobs are available. However, the skills of candidates are all too often of a standard below that needed in an industry under intense competitive pressure. Fabric cutters, who can command over-award wages, are simply not available.

Examples like this are numerous, occur in many industries and have flow-on effects. Unemployed people cannot obtain work due to their lack of skills and businesses cannot increase production to respond to the potential sales demand without finding skilled employees.

The national problem is to ensure a match between industry needs and skills training and to attract suitable people to the training. Is this being done and what use is being made of the $2.5 billion of taxpayers' money spent on skills training each year?

TRAINING: The largest proportion of training, including apprenticeship training, is done through the TAFE college system. Private training providers, both for-profit and non-profit, are expanding as a result of government inducement. The source of funds and method of allocation are through a multiplicity of State and Federal government bodies and departments. …

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