Recently a friend was telling me about a contractor who had given him a quote for finishing his basement. After the meeting, my friend wanted to finish the basement himself. Not because he wanted to save money. Because he wanted a raise.
My friend was surprised that it would be five months before the work could begin. There was a backlog of jobs the contractor was looking after. And after doing some digging, he found out from Skills Canada that the average annual salary for a skilled tradesperson is 25 per cent higher than the average Canadian wage ($50,000 versus $40,000).
He had always been pushed to go to university and after graduating with an undergraduate business degree, he found himself working in a bank. Like many younger Canadians, he has become disenchanted with the financial services and has started wondering if he went into the wrong career. But with student debt hanging over his head, how would he make a change and go back to school again?
Well, if he studied as part of an apprenticeship program, it would be conceivable for him to become certified without taking on new debt and he might even be able to pay off his old student debts to boot.
With university tuition rising faster than inflation, youth unemployment on the rise, and crushing debt loads, more people should question the return on investment for different types of postsecondary education, especially in the context of what really makes them happy. Not everyone should become a doctor, banker or lawyer.
If you haven't seen Ken Robinson's 2006 TED Talk in which he contends schools kill creativity, it's worth a look (ted.com). He makes a compelling case that educational systems around the world place science and math education at the very top and give the arts and physical development a token gesture. Schools are essentially designed as a 15-year training program for university applications.
One of the last stories in his presentation was about a lady named Gillian Lynne. When she was a child, her school told her parents that she might have a learning disorder. They took her to a specialist who noticed her constant fidgeting. He left her alone in a room with music playing and noted she started to dance. The specialist surmised that she didn't have any disorder at all – she just needed to go to a different school. A dance school. She went on to become a choreographer for Andrew Lloyd Webber's Cats and The Phantom Of The Opera.
Intelligence and accomplishment are not limited to the mind. Some people may be maestros with a scalpel; others may be maestros with a welding torch.
I know this first hand. In 2001, my income hovered somewhere around $15,000. I remember a stretch of about a week where all I ate were salt crackers. Yet it was the best year of my life.
I had just graduated from the University of Toronto with a degree in neuroscience, but that spring I enrolled in the Bridgestone Racing Academy's race driver and mechanic training program. This was a unique program where learning to fix and repair race cars earned you seat time in the school's fleet of open-wheel formula cars. The seat time was worth a lot of money. Essentially I was an apprentice, but I had chosen to receive my compensation in the form of services instead of money.
This is something to consider for people looking for their first or next career. Instead of paying tuition and going away to school to amass a huge debt, an apprentice can spend 40 weeks or more on the job and about two months in class. From day one, you are earning a salary. Your net worth can actually increase while you are learning.
If my friend plays his cards right, he could conceivably reduce the cost of finishing his basement if part of the money he pays goes right back into his pocket as an apprentice. Now that would be a pretty attractive return on investment for a basement renovation.
What the numbers say
A recent report from the Canadian Apprenticeship Forum cites that the average apprenticeship lasts between two to five years, with 80 per cent of the training done on the job while being paid.
In 2006- 2007 the average cost of tuition, textbooks, fees and tools was $1,400, and university tuition was about $4,500. According to that CAF report, a certified journeyperson's starting salary average is $52,000 and a university graduate's starting salary average is $45,500.
Annual employment income for someone 25 to 34 years of age who has completed a certified apprenticeship program, working full-time: $62,700.
Preet Banerjee, B.Sc, FMA, DMS, FCSI is a W Network Money Expert, and blogs at wheredoesallmymoneygo.com. You can also follow him on twitter at @PreetBanerjee