I was looking for evidence recently that tradies in Australia have become amongst the highest paid groups, which would means a profound change in relative rewards in that it would mean that smart young men could then rationally choose not to bother with university but simply become a tradesman. Doing so, I came across an interesting set of graphs that tell you about general changes in weekly wages from 2002 and 2012.
The picture for 2012, just brought out by the ABS, is here:
And the equivalent picture for 2002 from which we can deduce some interesting changes is here:
Now, on top of the 2013 press release about the 2012 figures, three important changes seem worth highlighting between these dates:
- The ‘professionals’ have overtaken all the other occupations, including the managers. Indeed, considering that in 2002 the managers were lumped in with the administrators in the data but still earned more than the professionals, the relative increase has been quite spectacular, in the order of 30% or so. What is included in the term ‘professionals’ I hear all you interested mums and dads ask who have to advise the kids what to become? It includes medics, scientist, consultants and other people with high levels of academic-style education and skills. So the brains now earn more than the managers. Interesting.
- In 2013, the only occupations where women earn about the same as men are the professionals and the administrators. The difference in the other occupations is large, and in some it is becoming larger. Particular amongst managers, the difference has at least doubled since 2002, whilst the gap has closed for administrators and the other professions. Still, in 2013, girls shouldn’t bother with becoming tradies, machine operators, or labourers: they earn way less than the boys in those occupations, even though the gap in those occupations seems to reduce, unlike for managers.
- The implied wages for ‘tradespersons\technicians and related workers’ seems only equal to average wages according to this data. However, I am a bit hesitant about believing that, because tax avoidance is easier amongst tradies and hence surely more of an issue with this official data. If one thus looks at the data gathered by an industry group that mainly targets tradies outside of mining (see here) you see that they find that median wages amongst full-time tradies are quite a bit higher than what is reported here (65,000 per year), nearly 20% higher than median wages in other industries. Their broken-down figures also tell you what you expect, which is that he more technical tradie jobs, like boilermaker or electrician, earn a lot more than general handyman (easily 50%). In short, being relatively more technical pays in that occupation group too.
The take-away message of this is that ‘tech skills’ in general seem to have increased in pay-off in the last 10 years and that women looking for high equal pay should join in with the human capital driven professionals and thus go to university whilst smart boys have the choice between academic or tradie jobs to make a good living. The networkers are left with a fight over the managerial positions.
I wonder what tradies who run small businesses consider themselves (which seems like a fair few)? Managers or Tradies? For many trades, it’s far easier to run a small business than other types of jobs, so how these guys are categorizing themselves may be affecting the figures. I assume here that the ones employing a few other guys are earning a fair bit more than those that are employed by others.
“and that women looking for high equal pay should join in with the human capital driven professionals and thus go to university”
Already happening (excluding IT), although it would be worthwhile thinking about immigration. It may well be that getting lots of smart people from other countries is inflating this figure compared to what Australian graduates are getting (or, even more so, given the crapification of Aus universities, what they could expect to get).
Knowing a few, I think they count themselves as tradies.
And they do earn pretty well. I would think that the median wage must be closer to the $65k figure based on my anecdata.
Just on comparing the earnings of managers with those of other employees, this comparison seems to be between “non-managerial” managers and “non-managerial” others. I imagine if “managerial” managers were also considered things might look a little different.
With ATARs above 80, males and females have equal rates of applying to uni. Below 80, women become increasingly more likely to apply. This is consistent with your theory that guys are attracted to a wider range of occupations, many of which will pay as well as the nursing and teaching jobs that particularly attract lower-ATAR women.
BTW, I would be wary of reading too much into a comparison of managers over this time period. The 2006 revision of occupational classifications brought more low-level shop, cafe and farm managers into the category. However I think you are right that an employee based survey won’t do a great job of getting median wages for occupations where there are high levels of self-employment like trades (whether or not they are declaring all their income).
yep, agreed with all that.
Except that the SEEH is an employER based survey, not an employee one. Coverage of employees in very small businesses generally, including tax evading ones, is likely to be low. OTOH wages in small businesses are known to be lower for identical work than wages in large businesses (google “employer size-wage effect” for why) so this might offset the bias from not covering the black economy.
Methodologically, though, it is interesting how even for good researchers the immediate reaction to data which casts doubt on an hypothesis that tradies are all rolling in money is to try and poke holes in the data rather than to adjust priors. Neither Bayesian nor Popperian – though perhaps so much the worse for Bayes and Popper.