In this latest paper form the Mackenzie Research Institute at Holmsglen TAFE, Tom Karmel “takes a descriptive approach to changes in the labour market over the ten years 2011 to 2021” in order to explore “the relationship between what is happening to occupational employment on one hand and qualifications on the other.”

Tom notes the credential creep that has occurred over the period and, in particular, points out that:

“The overall lesson that emerges is that the labour market has become increasingly unfriendly for persons with a diploma or a certificate III/IV.”

Thus, he concludes that:

“The occupational structure is changing in a way not sympathetic to diplomas and certificates, and the supply of persons with degrees is only going to increase, making the lower level qualifications less competitive.”

Let’s explore the detail a little more

Looking at employment

The report found that full-time employment has been strongest in the top four income deciles (and especially in the top two), while growth in total employment was strongest in the top four income deciles and the bottom two.

What this means, in Tom’s view, is that “full-time jobs have been strongly biased toward the better paid jobs, while growth in all jobs has shown a hollowing out of the occupation distribution with growth at the top and bottom at the expense of the middle. It is clear that the growth in part-time jobs has tended to be in the poorer paying jobs.”

Looking at qualifications and qualification creep

The report points out that:

“In respect of qualifications, the period 2011 to 2021 was one of growth in credentials, particularly in higher degrees and bachelor degrees. The strongest growth was in higher degrees where the proportion of employed persons with a higher degree increased from 5.1% to 9.1%, while the proportion with a bachelor degree increased from 20.8% to 26.3%. Diplomas increased a little while the proportion of employed persons with a certificate III/IV remained constant (at 19.5%). There are now more people with a degree than with a certificate III/IV.”

On the other hand, “the groups which have seen a decline are those with an ‘other certificate’ (which includes certificates I and II and those qualifications that fall outside the Australian Qualification framework) and those with no non-school qualification.”

The worry is that individuals will not get a job commensurate with the qualification(s) they hold, and even some of those with relatively high qualification levels may still be in the lowest income deciles.

However, when Tom used a shift share analysis, he found important structural changes in the occupation structure that clearly favour those with higher degrees and degrees. It is relatively neutral for those with diplomas and is unfavourable for those with a certificate III/IV. It is very unfriendly to those with no post-school qualification. (A shift-share analysis looks at the change over time of an economic variable, such as employment or qualifications, within industries in an economy.)

The overall lesson that emerges, he suggests (and as we pointed out above), is that “the labour market has become increasingly unfriendly for persons with a diploma or a certificate III/IV.” As he points out:

“First, the growth in occupations has not been in those occupations associated with the VET qualifications. Technicians and trades workers are growing much more slowly than the overall labour market. Second, these qualifications are being pushed aside by higher degrees and bachelor degrees and have only maintained their position by pushing out those with no post-school qualifications.”

Interestingly, all of this seems not to accord with a rhetoric that highlights the real importance of VET as a sector and study destination and pathway.

And finally, the role of regulation

Tom suggests that “changes to regulatory structures are likely to be an important” in all this. For VET, these changes to regulatory regimes are both an opportunity but also a possible threat. In Tom’s view, “the opportunity tends to be at lower level jobs where persons with no post-school qualification are being channelled into certificates, while the threat is at higher level jobs” where higher level qualifications are favoured” but may not be necessarily a better study option.