Originally posted on Progressive Policy Institute.
By Taylor Maag
Apprenticeship is engrained in America’s history — three of our Founding Fathers started their careers as apprentices. George Washington, for example, apprenticed as a land surveyor. Yet even with this 250-year runway, apprenticeships have not taken off in the United States as they have in other advanced nations.
Our country has about 500,000 registered apprenticeships today, mostly in traditional sectors such as building trades and heavy industry. As a share of their labor force, Great Britain, Australia, and Germany have roughly 10 times more.
It is puzzling that the U.S. hasn’t followed its peers in scaling up apprenticeship, a training model that is also a job, allowing people to work and earn while they are learning the critical skills necessary for good jobs and careers. It’s an especially relevant model now, when most U.S. jobs require at least some postsecondary education and training, and when employers, even in our tight labor market, report a serious shortage of skilled workers in their fields.
While many progressives have seized on the panacea of “college for all,” the reality is that 62% of American adults have no bachelor’s degree, and that number rises to 72% for Black adults and 79% for Hispanic adults. Additionally, soaring college tuition costs, low completion rates, and heavy debt burdens make it clear that America needs alternatives to college that are affordable, trusted by employers, and help people learn the technical and digital skills that today’s middle-class jobs require.
This is why, in a spring 2022 survey of 1,220 California adults, only 33% agreed that a bachelor’s degree is required to have a successful career, while 63% favored multiple pathways including apprenticeship. Yet, federal policy remains biased in favor of college. Just a couple of months ago, the Biden Administration’s debt forgiveness policy was announced, further subsidizing college costs for those with a 4-year degree, or higher. But what about the majority of Americans without degrees, how is the federal government helping them?
Our nation’s oldest pathway — apprenticeship — is a viable solution to start leveling the playing field for college and non-college workers while also solving the current skills conundrum. A large-scale apprenticeship program can be a game-changer to address critical issues plaguing America, including socioeconomic immobility, frustration at being shut out from economic opportunity, geographic mobility, and workforce diversity.
To make this a reality, Robert Lerman and Ryan Craig of Apprenticeships for America (AFA) offer a creative proposal: mobilize networks of intermediaries, including nonprofits, job placement and business service firms, industry associations and unions to work with U.S. employers to create roughly one million new apprenticeships per year.
Why are such intermediaries essential for ramping up the number of apprenticeship slots in America? Creating rigorous apprenticeships isn’t easy. It takes time, money, and skills few employers believe they have. Research shows that without outside efforts to sell employers on apprenticeship and help them organize programs, there’s little hope of achieving scale.
The good news: Funding of intermediaries is up. The Department of Labor’s (DOL) Office of Apprenticeship’s budget has increased by $200 million since 2015, with most of these dollars going to intermediaries as grants to expand apprenticeship. The bad news: Even with the rise of resources the share of apprentices in the labor force is stuck at today’s low level — just 0.3% of all workers.
It’s clear that our nation needs a new way of bringing apprenticeship to scale. That is why the AFA’s pay-per-apprenticeship proposal is so attractive — it pushes for an apprenticeship system that models higher education where federal funding doesn’t merely pick winners through the lottery of grant programs, but that funds apprenticeship through reliable, predictable formula funding. Additionally, to ensure stronger outcomes, these dollars would be tied to performance. Resources would go to all types of intermediaries, from nonprofits like CareerWise, to for-profit apprenticeship service providers like Multiverse, based on how many apprentices they place at companies and train.
If the federal government were to follow this approach and expand opportunities through formula funding and pay only for performance, a $4 billion investment would create 1 million new apprenticeships a year. And while $4 billion sounds expensive, compare it to the over $200 billion the federal government spends annually on higher education, which is done willingly without the same job guarantee. What also makes this dollar amount easier to swallow is that no workforce training method packs as much punch as apprenticeship. Apprenticeships have a strong return on investment for employers in terms of retention and economic growth. For roughly every dollar spent on apprenticeship, employers get an average of $1.47 back in increased productivity, reduced waste, and greater front-line innovation. At Multiverse, for example, 90% of apprentices remain with their employer post program completion. This model also yields strong returns for workers, with those who complete apprenticeship earning an average of $300,000 more than those who don’t over the course of their career.
It is time today’s policymakers take a page from our history books and, like our Founding Fathers, value apprenticeship. But rather than go back in time, federal leaders must build and scale a 21st century apprenticeship system. With such an effort, U.S. employers will follow other countries to create a significant number of apprenticeships and remain competitive through gains in recruitment, workforce quality, and improved productivity. Simultaneously, these changes will be worthwhile for workers — increasing earnings, widening access to rewarding careers, increasing job satisfaction, and expanding the middle class. This is the kind of tangible hand up American workers deserve and should expect from their government.
Taylor Maag is the Director of Workforce Development Policy at the Progressive Policy Institute.
