training for success: a policy to expand apprenticeships in the united states

8/13/2019 Training for Success: A Policy to Expand Apprenticeships in the United States

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Training for Success

A Policy to Expand Apprenticeships in the United States

By Ben Olinsky and Sarah Ayres December 2013


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Training for SuccessA Policy to Expand Apprenticeships in the United States

By Ben Olinsky and Sarah Ayres December 2013


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1 Introduction and summary

4 Our education and training system is not sufficient

9 Apprenticeships can help meet the demand for

skilled workers

18 Significant barriers must be overcome to expand

apprenticeships

38 Effective policy can address the challenges to establishi

apprenticeship programs

53 Conclusion

54 Appendix: Existing funding sources for apprenticeships

56 About the authors

57 Acknowledgements

58 Endnotes

Contents


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1 Center for American Progress |Training for Success

Introduction and summary

Appreniceships are no a amiliar concep o many Americans, bu expanding he

use o his highly effecive raining model can help our naion mee he demand

or skilled workers, creae pahways o well-paying careers or unemployed young

workers, and give American businesses a compeiive edge in he global marke-

place. Appreniceships have been a ried and rue mehod o educaing and rain-

ing workers since he Middle Ages, and hey coninue o enhance produciviy

and boos workers earnings in many counries around he world oday. A a ime

when oo many American workers lack he educaion and raining o secure well-paying, middle-class jobs, and American businesses increasingly rely on high-skill

workers o innovae and expand, we believe ha appreniceships hold grea prom-

ise or addressing our naions economic challenges. In his repor, we will discuss

Americas insufficien workorce raining sysem, demonsrae ha apprenice-

ships are a ime-esed soluion o our workorce raining challenges, and propose

a se o policies o expand appreniceships while addressing he reasons hey have

no ye been widely adoped in he Unied Saes.

An appreniceship is a job in which an individual is paid o learn a se o skills

hrough on-he-job raining. In he Unied Saes, a ormal sysem o regisered

appreniceships was creaed in 1937 by he Naional Appreniceship Ac1and is

overseen by he U.S. Deparmen o Labor and he individual saes. Under he

sysem, a sponsor o an appreniceship regisers is program and is apprenices

wih he ederal governmen or a delegaed sae agency. For each apprenice-

able occupaion, a se o requiremens deails he duraion and/or compeency

sandards necessary or compleion. When an apprenice complees hese require-

mens, he governmen issues a cerificae o compleion ha hen serves as a

naionally recognized porable credenial.

Despie he exisence o a ormal regisered appreniceship sysem in he Unied

Saes, he raining model is no widely used or undersood by American workers

or businesses. America had 358,000 acive regisered apprenices in 2012only 7


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percen o he number o appreniceships in England when adjusing or popula-

ion size.2Appreniceships are also a key condui or many German and Swiss

young aduls o ener he workorce.

In he Unied Saes, regisered appreniceships las beween one and six years,

wih an average o our years. Te requiremens or compleing an appreniceshipmay be ime-based, compeency-based, or a hybrid o he wo. Appreniceships

ypically include 2,000 hours o on-he-job learning and a minimum o 144 hours

o classroom-based insrucion each year. Te classroom-based insrucion is ofen

conduced a local communiy or echnical colleges or oher vocaional schools.

Unlike inernships, in which individuals work or litle or no money and rarely

receive ormal raining, appreniceships ollow an earn-while-you-learn model.

Tey are real jobs wih exensive on-he-job and classroom-based raining and

wages ha go up as skills are masered.3

Appreniceships are run by employers, employer associaions, and labor-manage-men organizaions. Te coss o appreniceships are usually borne almos enirely

by heir sponsors, who pay or an apprenices wages, all on-he-job raining coss,

and ofen much o he uiion or heir classroom insrucion. In he case o join

labor-managemen programs, boh groups make significan invesmens: Each

year, building rades unions and heir parner conracors inves more han $1

billion in apprenice and journey-level raining, ens o millions o dollars more in

consrucion raining plans and equipmen, and $10 billion in apprenice wages

and benefis.4

In exchange or his invesmen, employers receive a pipeline o skilled workers

seeped in he culure o heir firms and who exhibi srong loyaly o heir spon-

sors. In a number o saes, employers may also qualiy or ax breaks or oher sub-

sidies. A number o ederal workorce unding sreams may also be applied oward

he coss o an appreniceship.

Expanding he U.S. appreniceship sysem would help srenghen our economy,

as research shows ha he Unied Saes is no producing enough skilled workers

o mee our uure economic needs. By 2020, America is projeced o experience

a shorage o 3 million workers wih associaes degrees or higher and 5 millionworkers wih echnical cerificaes and credenials.5Compounding our inadequae

workorce developmen sysem, research shows ha employers are now spend-

ing less on raining han hey have in he pas. A he same ime, indusry surveys

show ha a lack o qualified workers is a op concern or many employers.6


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Appreniceships can help mee he demand rom businesses, while offering work-

ers higher wages and beter employmen oucomes. Evidence on he effeciveness

and reurn on invesmen or appreniceships is sronghey are overwhelmingly

recommended by employers and lead o significan increases in lieime earnings

and benefis o up o $300,000 or workers.7

Bu expanding appreniceships will require overcoming a number o hurdles ha

have hus ar prevened heir broader adopion in he Unied Saes. Businesses

mus ake on significan coss o hire apprenices and are requenly unaware o he

benefis hey will gain in reurn. Similarly, workers are unamiliar wih he range

o occupaions, educaional requiremens, and salaries associaed wih apprenice-

ships. Despie effors o diversiy, appreniceships remain largely he domain o

men in radiional rades such as consrucion. Our disjoined naional sysem o

adminisering appreniceships makes i difficul o collec daa ha would beter

inorm heir use and hinders he developmen o a uniorm credenialing sysem

ha would provide he mos benefi o workers and employers. Finally, unionshave invesed significan resources ino developing high-qualiy appreniceship

programs hrough join appreniceship commitees; a broad expansion o appren-

iceships ino new secors and nonunionized workplaces would ace he challenge

o moving orward wihou ha significan experise and suppor.

In his repor, we ouline a se o policy recommendaions ha, i implemened,

will address hese challenges and se he sage or a large-scale expansion o

appreniceships in he Unied Saes. We recommend improvemens o marke-

ing effors o generae demand rom businesses, ax incenives o help businesses

deray he cos o raining apprenices, and compeiive grans o suppor promis-

ing public-privae parnerships. We recommend improving access o workers by

esablishing an online daabase o openings and launching an iniiaive o bring

recen high school graduaes ino appreniceships. And we recommend improve-

mens o research and daa collecion ha will enhance our undersanding o he

economic benefis o appreniceships and how o expand heir reach o women

and workers in nonradiional occupaions. We believe ha our proposals can con-

nec workers o good jobs, enable businesses o boos heir produciviy, and offer

axpayers a high reurn on invesmen.


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Our education and training system

is not sufficient

Te U.S. educaion and raining sysem is no on pace o mee uure workorce

demands, wih damaging consequences or workers, businesses, and Americas

global compeiiveness. Academic and indusry analyses have shown ha he

Unied Saes is on rack o experience a shorage o skilled workers wihin he

nex decade, as our economy increasingly requires workers o have some ormal

educaion or raining afer high school. Expanding he share o workers wih pos-

secondary credenials, such as hose acquired hrough appreniceships, will lead

o higher wages and beter opporuniies or American workers, more produciveand profiable American businesses, and a sronger American economy.

Businesses need skilled workers

A number o analyses conduced over he pas several years have raised he con-

cern ha he Unied Saes is no producing enough skilled workers o mee he

growing demand. An analysis by he Georgeown Universiy Cener on Educaion

and he Workorce finds ha he Unied Saes is on rack o experience a shor-

age o 3 million workers wih associaes degrees or higher and abou 5 million

workers wih echnical cerificaes and credenials.8Tis shorage is due o he

increasing share o jobs ha require some orm o possecondary educaion.

Consider ha in 1973, jus 28 percen o jobs required possecondary educaion.

Ta number jumped o 59 percen in 2008 and is prediced o reach 65 percen

in 2020.9o be clear, hese jobs are no jus or graduaes o our-year colleges.

One-hird o jobs will no require a our-year bachelors degree bu will require

some level o possecondary educaion or raining, such as an associaes degree,

echnical cerificae, or indusry credenialexacly wha can be offered hrough

an appreniceship.10


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Despie his rend, oo many Americans oday are leaving educaion and rain-

ing wih a high school diploma or less. Consider ha while 30 percen o jobs

in 2020 will require an associaes degree, cerificae, or some college, only 28

percen o aduls oday have ha level o possecondary educaion.11While 28

percen may seem relaively close o 30 percen, hese figures ranslae ino a siz-

able 3-million-worker shorage naionally. Failing o provide beter opporuni-ies or workers o obain educaion and raining beyond high school is bad or

businesses in myriad ways, as we deail below.

Employers report that they are struggling to fill jobs

In ManpowerGroups 2013 alen Shorage Survey, almos hal (48 percen) o

U.S. employers responded ha hey have a hard ime filling jobs because can-

didaes lack echnical compeencies.12Te Business oundable ound ha 61

percen o employers surveyed in June o July o 2009 had a hard ime findingskilled workers o fill vacancies13a he heigh o he Grea ecession. And

when Deloite surveyed American manuacuring companies in 2011, wo-hirds

repored ha hey were experiencing a moderae or severe shorage o quali-

fied workers, especially among skilled producion workers such as machiniss,

operaors, craf workers, disribuors, and echnicians.14o be clear, he severiy

or exisence o a skills gap varies widely by indusry. Te persisenly high rae o

unemploymen in he consrucion indusry, or example, makes clear ha i is no

suffering rom a skills gap.15

Improving the skills of U.S. workers will boost business and helpgrow the economy

In 2012, Deloite ound ha here were 600,000 unfilled manuacuring jobs in

he Unied Saessimply because employers canno find people wih he skills

hey need. Furhermore, 74 percen o manuacurers indicaed ha employee

shorages or inadequae alen were limiing expansion or increased produciviy.

Deloite urher esimaed ha closing he skilled-worker gap in manuacuring

could lead o he employmen o an addiional 3.85 million workers: 600,000unfilled jobs due o he skills shorage, 500,000 jobs rom manuacuring growh,

and 2.75 million new jobs in relaed indusries.16


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Failure to act now will result in a serious shortage of skilled workers

While ew economiss believe ha odays shorage o skilled workers is caus-

ing Americas sluggish economic recovery and high unemploymen rae, he

Unied Saes is on rack o experience a more criical shorage o skilled work-

ers in he no-so-disan uure. A recen analysis by he Boson ConsulingGroup, or BCG, was more opimisic in he shor run, esimaing ha he

Unied Saes may only be currenly shor by abou 80,000 o 100,000 skilled

manuacuring workers, bu i also ound ha he skills gap will soon become

a serious problem i no addressed. Te average age o a high-skill manuacur-

ing worker is 56 years old; as hose workers begin o reire, BCG esimaes ha

he shorage o highly skilled manuacuring workers could worsen o approxi-

maely 875,000 machiniss, welders, indusrial-machinery mechanics, and

indusrial engineers by 2020.17

More broadly, among he 30 occupaions wih he larges projeced employ-men declines beween 2010 and 2020, only hree occupaions ypically require

a possecondary degree or nondegree award, and only wo addiional occupa-

ions ypically receive long-erm on-he-job raining. Conversely, among he 30

ases-growing occupaions beween 2010 and 2020, 17 required a possecond-

ary degree, and our addiional occupaions ypically require raining hrough

an appreniceship.18

Moreover, businesses are no playing he large role in raining workers ha hey

once did. American companies oday inves abou hal as much in raining as

hey did a decade ago.19Cerain indusries have experienced dire consequences

as a resul o declining employer invesmen; a RND analysis atribues he

decline o he U.S. machine-ool indusry in par o firms disinvesmen in

worker raining and he collapse o he appreniceship sysem ha was he

main source o skilled labor.20Given he combinaion o our naions inade-

quae workorce raining sysem and growing employer disinvesmen in worker

raining, i is no surprising ha America is acing a looming skilled-worker

shorage ha will have consequences or workers, businesses, and Americas

long-erm economic growh and compeiiveness.


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Workers benefit from postsecondary education and training

Workers who don gain he skills and credenials hey need o ge good jobs

in high-growh indusries will ace dwindling job prospecs, lower wages, and

ewer opporuniies o join he middle class. Jus as he demand or middle- and

high-skill workers is growing, he opporuniies available o low-skill workers arediminishing. While 40 percen o aduls oday have a high school diploma or less,

only 36 percen o jobs in 2020 will be available o hem.21

Workers wihou a possecondary degree already earn lower wages and ace higher

raes o unemploymen han heir more educaed peers, and we can expec hose

disadvanages o worsen as he number o jobs available o hem declines. Workers

wih a high school degree or less earn less han workers wih possecondary edu-

caion and are more likely o be in a lower income class. And 10.7 percen o work-

ers over he age o 25 wih a high school degree or less are unemployed, compared

o he overall unemploymen rae o 7.6 percen.22

o make maters worse, low-skill workers are less likely o receive employer-pro-

vided raining han high-skill workers. Te percenage o low-skill workers who

received employer-provided raining beween 1995 and 2001 dropped rom 22

percen o 20 percen, even as he percenage o raining resources going o hose

wih a bachelors degree increased rom 50 percen o 54 percen.23No only do

low-skill workers ace ewer opporuniies and worse jobs han high-skill work-

ers, bu our lopsided educaion and raining mechanisms serve o exacerbae he

divide by concenraing invesmens in workers wih high levels o human capial.

Unorunaely, significan barriers deer workers rom seeking ou addiional edu-

caion and raining. According o he Springboard Projecs American Workorce

Survey, he greaes barriers o paricipaing in educaion and raining are conve-

nience, cos, cusomizaion, and accrediaion.24Te cos barrier is woold: In

addiion o he high cos o uiion, atending a ull-ime possecondary program

means orgoing a ull-ime income during ha period. Addiionally, or unem-

ployed workers in many saes, a possecondary educaion or raining program

is likely o las longer han an individual can coninue o receive unemploymen

benefis and means addiional expenses hey may no be able o affordeven iha raining is criical o finding new work.


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Moreover, he cos o possecondary educaion has skyrockeed in recen years,

while governmen suppor has eroded significanly. Tanks in par o disinves-

men a a sae level, uiion and ees or public our-year colleges have gone up

289 percen in he pas 40 years, rom $2,225 in he 1972-73 academic year o

$8,655 in 2012-13, afer adjusing or inflaion.25Te inflaion-adjused cos

o atending a public wo-year college also wen up 146 percen, rom $1,274in 1972-73 o $3,131 in 2012-13, in 2012 dollars.26A he same ime, he Pell

Gran, which provides unding o low-income undergraduaes o pay or heir

educaion, has significanly eroded in buying power. In 1979, he maximum Pell

Gran covered abou hree-ourhs o he oal cos o atending a public our-

year college; oday, i covers only 31 percen o he cos or uiion, ees, room,

and board.27Consequenly, 37 percen o surveyed workers cie cos as a barrier

o ataining possecondary educaion, including hal o respondens earning less

han $50,000 a year.28

And workers are increasingly growing wary o massive suden deb. In 2010, su-den deb owed by Americans exceeded credi card deb or he firs ime,29and i

has now surpassed $1 rillion.30In Ocober 2012, he average member o he class

o 2011 held $26,600 in suden deb.31And in a survey o young aduls, nearly

hree ou o our respondens said ha graduaes bore unmanageable amouns o

suden-loan deb.32

Addiionally, workers aren necessarily choosing o rain in fields ha are high

growh, and ye hey bear all o he risk or having invesed in raining in he

wrong field. According o he Business oundable, 41 percen o surveyed work-

ers are unsure o wha skills will be required in he uure and i raining will pay

off.33Tis lack o knowledge can pu off prospecive sudens, who migh choose

o orgo possecondary educaion enirely. I can also, wihou adequae counsel-

ing a he beginning o a possecondary program, lead sudens o pursue sudies

in fields wih ewer job prospecs. Indeed, in a separae survey by Accenure, 41

percen o college graduaes rom he las wo years repor working in jobs ha do

no require a degree, and 11 percen are currenly unemployedmore han hal

since graduaion. Almos wo-hirds (63 percen) believe hey need addiional

raining o ge heir desired job, and nearly hal said hey would have ared beter

in he job marke wih a differen major. When 2011 and 2012 college grads noemployed in heir field o sudy were asked why, 32 percen said here were no

enough job openings in heir field.34


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Apprenticeships can help meet the

demand for skilled workers

Appreniceships are a paricularly successul raining model, combining classroom

educaion and on-he-job learning. While appreniceships are widely used in

oher counries, heir reach has so ar been limied in he Unied Saes. We believe

ha expanding appreniceships in he Unied Saes can play an imporan role in

meeing he demand or skilled workers, improving wages and economic oppor-

uniies or workers, boosing U.S. business, and bolsering Americas compeiive-

ness in he global economy.

Apprenticeships benefit workers

Apprenticeships are real jobsand workers earn a paycheck during heir appren-

iceshipypically saring a 50 percen o 60 percen o heir evenual proes-

sional wages.35Addiionally, an apprenices wages go up as hey progress hrough

he program and maser addiional skills. Because raining is par o heir job,

paricipans do no have o orgo income rom employmen, hus one o he key

barriers o receiving addiional raining is surmouned. For individuals who are

unable or unwilling o ake ime ou o he labor marke o pursue possecondary

educaion, an appreniceship can be he perec fi. Addiionally, or he unem-

ployed worker who needs o upgrade his or her skills o find a job, an apprenice-

ship means an immediae job, seadily rising wages, and an enre ino a successul

and susainable long-erm career.

Apprenticeships dramatically raise workers wagesrom he momen hey finish

raining and coninue o benefi hem hroughou heir careers. Te Deparmen

o Labor has noed ha workers who complee an appreniceship earn an aver-

age saring annual salary o $50,000.36

And in he mos comprehensive researcho dae, analyss conduced a cos-benefi analysis o regisered appreniceships in

10 heerogeneous saes or he Deparmen o Labors Employmen and raining

Adminisraion and ound ha appreniceships coner boh shor- and long-erm

benefis o workers. Te saes were seleced o run he gamu o a number o key ac-

Workers who

complete an

apprenticeship

make an averag

$240,037 ($301,

including nonw

benefits) more

than comparab

job seekers in th

lifetimes.


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ors, including program size, geographic region, and levels o union represenaion.

Te sudy ound ha he esimaed earnings o workers who paricipaed in appren-

iceships would be $98,718 more over heir lieimes han similar nonparicipans;

workers who complee an appreniceship make an average o $240,037 ($301,533

including nonwage benefis) more han comparable job seekers in heir lieimes.37

Apprentices get hands-on career trainingin indusries wih a demonsraed need

or skilled labor. Employers sponsor appreniceship programs because hey know

hey need a pipeline o skilled workers o fill anicipaed job openings. Pu anoher

way, because employers (or join managemen-labor organizaions) bear he coss

o appreniceships, hey are unlikely o ake on an apprenice i hey don expec

ha here will be a job or hem a he compleion o he program. Te daa bear

his ou: O hose apprenices who complee heir raining, 87.4 percen were

employed shorly afer finishing heir program, and o hose 87.9 percen were sill

employed six monhs laer.38Looking orward, occupaions ha ypically incorpo-

rae appreniceships are projeced o grow by 22.5 percen by 2020, aser han orany oher on-he-job raining caegory.39

Apprentices get an education, with little or no educational debt.In many cases,

apprenices can receive college credi, and even an associaes degree, or heir

coursework and on-he-job raining. In ac, abou one-quarer o apprenices

repor having paricipaed in a communiy college or vocaional program in he

las year, and an addiional 30 percen repor having aken a nondegree course.40

Appreniceships also offer an alernaive o ully classroom-based educaion, as

much o he learning occurs on he job raher han in a classroom.

Apprentices receive national industry certificationha is porable and valu-

able anywhere in he Unied Saes, ensuring ha heir skills are ranserable o

oher companies and indusries. Te Washingon Sae Deparmen o Labor and

Indusries calls he appreniceship compleion cerificae one o he oldes, mos

basic, and mos highly porable indusry credenials in use oday.41Apprenices

receive a cerificae o compleion rom he Deparmen o Labor or a sae

appreniceship agency when hey finish a regisered appreniceship, and his cer-

ificae is recognized by employers hroughou he naion. Programs can now also

offer inerim credenials along he way ha ceriy an apprenices compeency inspecific skills and ulimaely lead o a cerificae o compleion.42


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Apprenticeships benefit businesses

Employers who sponsor apprenices gain skilled workers, reduce urnover, and

improve he qualiy o work overall as all workers serve as eachers and menors

o appreniceship sudens.43Appreniceships help businesses address any criical

or expeced shorages o skilled labor, while raining uure workers o heir ownspecificaions. Tey help inculcae apprenices wih he culure o heir sponsors

and end o breed long-erm loyaly.

Nearly all employers who sponsor apprenticeship programs recommend them.

A survey o regisered appreniceship sponsors in he Unied Saes ound ha 87

percen o sponsors would srongly recommend regisered appreniceships, and

anoher 11 percen would recommend appreniceships wih some reservaions

or a oal o 98 percen o sponsors recommending hem.44

Employers build a pipeline of skilled workers. Businesses can rain workers orjobs ha hey know need o be filled due o a lack o candidaes wih he requisie

raining, as he workorce ages, and as hey oresee opporuniies or expansion.

In a 2007 survey o sponsors o appreniceship programs, more han 80 percen

o sponsors said ha a very imporan benefi o appreniceships was ha hey

helped hem mee he demand or skilled workers. And 72 percen o sponsors

said ha appreniceships reliably showed which workers have he skills needed.45

In addiion, employers ound ha appreniceships helped documen necessary job

skills, raised produciviy and worker morale, and reduced saey problems.46

Employers save money on wages. Paricipans in an appreniceship program

iniially receive wages ha average 50 percen o 60 percen o heir ulimae wages

upon program compleion.47So, while employers ake on significan coss o spon-

sor apprenices, hey also benefi rom paying lower wages o workers during heir

appreniceships. In a recen sudy, wo-hirds o sponsors said ha saving money

on employee wages was very or somewha imporan, as i allowed hem o recoup

some o he coss o running an appreniceship program.48Addiionally, while he

Davis-Bacon Ac requires conracors and subconracors on ederal building and

public-works conracs o pay laborers and mechanics prevailing wage raes and


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ringe benefis or he area, regisered apprenices may be paid a reduced raes.49

Some saes have similar requiremens or sae conracs, and lower wages may be

paid or apprenices in some o hese saes as well.50

Employers realize lower workers compensation costs. Because o he required

emphasis on saey raining, he Deparmen o Labor repors ha employersoffering appreniceships can see lower workers compensaion coss.51

Businesses in countries with more expansive apprenticeship programs show very

high levels of satisfaction.A recen survey by he U.K. Deparmen o Business

ound ha apprenices scored 4 percen higher on an employabiliy scale han

universiy graduaes.52In he Unied Kingdom, employers in engineering and

consrucion fields ypically recover coss wihin hree o our years o comple-

ion. U.K. sponsors also repor improved labor supply, beter efficiency in hiring

and reaining employees, embedding organizaional culure and values ino a

companys workorce, and overall produciviy gains.53

A Swiss sudy ound ha employers spend around $3.4 billion annually raining

apprenices, bu earn $3.7 billion each year rom apprenices work during raining.

Tey also save on recruiing and employee relocaion coss.54Consequenly, 80 per-

cen o more han 2,300 Swiss firms surveyed said ha hey were saisfied or very

saisfied wih he cos-benefi raio o he Swiss appreniceship program.55

In Canada, an exensive 2009 sudy ha surveyed almos 1,000 businesses

across Canada ound ha employers receive a benefi o $1.47 or every dollar

spen on appreniceship raining.56Whas more, hey see benefis and revenues

increase each year over he course o an appreniceship. And research has shown

ha reurns on invesmen exis in every geographic region o Canada and

across companies o all sizes.57


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In shor, companies do no sponsor apprenices ou o social obligaion; hey do i

because is good or business. Heinrich von Pierer, he ormer presiden and CEO

o Siemens AG in Germany, pu i his way:

Siemens does no believe in appreniceship merely or is educaional value. We

believe in i because i makes a botom-line difference. We have praciced appren-iceship or over 100 years and, in our collecive judgmen, i gives our company a

worldwide compeiive edge. oday we have appreniceship programs in sixeen

counries. Among hose are hree differen models esablished in he U.S. or esing.

Te American workorce will clearly benefi fom a major invesmen in appren-

iceship. Te raw maerial in America has proved second o none when prop-

erly rained and prepared. Tis is why we are aggressive invesors in America

and in he American workorce.58

Apprenticeships are an excellent public investment

Appreniceships are among he mos effecive and cos-efficien workorce

developmen ools available o he public, in large par because heir coss are

borne almos enirely by employers and rade unions. As noed earlier, he

building rades unions and heir parner conracors inves more han $1 bil lion

annually in raining and $10 bil lion in apprenice wages and benefis.59No

unsurprisingly, hen, exensive research has shown ha hey come a relaively

low public cos, yield remendous benefis o workers, and reduce spending on

oher governmen programs.

Esimaes show ha he social benefis o appreniceships are overwhelmingly

larger han social coss. In a comprehensive sudy on he effeciveness o appren-

iceships in 10 diverse saes, researchers ound ha he ne social benefis were

$59,000 on average in he medium erm and $124,000 over a workers career. Tis

ook ino accoun apprenices added produciviy and reduced use o govern-

men programs, adminisraion coss, and he coss o communiy colleges used

or echnical insrucion. Even afer subracing he coss borne by employers and

using he mos conservaive esimaes, he ne social benefis amoun o a subsan-ial $49,000 over he carer o an apprenice.60

The return on

investment for

apprenticeships

was found to

be substantially

higher than for

other workforce

training program

including

community

colleges.


17/66


In he sae o Washingon, which conducs a

narrower bu more in-deph review o he ou-

comes and ne impac o is workorce-raining

programs, he reurn on invesmen or appren-

iceships was ound o be subsanially higher

han or any oher workorce raining programincluding communiy colleges. Specifically, he

presen value o an apprenices pos-program

increases in earnings and benefis, reduced by

any increased axes as well as orgone earnings

and program coss during he raining period,

was more han $57,000 or he firs wo and a hal

years afer exiing he program and more han

$324,000 over his or her career. Te esimaed

lieime ne benefi o axpayers, afer accoun-

ing or public coss, is more han $85,000 perparicipan, or a reurn o $23 or every public

dollar invesed.61Tis compared o $6,668 in

shor-erm ne gains and $140,631 in long-erm

ne gains or workers enering communiy college

occupaional programs. For hose programs,

he esimaed lieime ne benefi o axpayers is

abou $19,000 per paricipan, or a reurn o $3

or every public dollar invesed.62

Moreover, appreniceships had among he bes ne employmen impac among

Washingons workorce raining programs, wih he employmen rae o all paric-

ipans 9.8 percenage poins higher han a conrol group o nonparicipans. Tis

impac is almos indisinguishable rom ha o atending a communiy and echni-

cal college (10.1 percenage poins) and rails only ha o vocaional rehabilia-

ion (which services individuals wih disabiliies) and he Workorce Invesmen

Acs adul program (which raises wages ar less han appreniceships and reurns

o axpayers only $1.20 or every dollar spen).63A more deailed comparaive

effeciveness o Washingons workorce raining programs is in able 1.

Tis is no o say ha oher workorce raining programs are ineffecive, nor is i o say

ha appreniceships are appropriae or all workers or employers. Bu o he exen

ha appreniceships are underuilized due o lack o awareness, misconcepions, or

similar barriers, heir reurn on invesmen should be a compelling reason or us o

ake a look a wheher we can easily expand heir use and our invesmen in hem.

FIGURE 1

Taxpayer return on investment by workforce

training program, per dollar spent

Source: 2012 Washington workforce training results by program.

Apprenticeship

Secondary career and technical education

Community and technical college professional-technical education

Worker retraining at community and technical colleges

Workforce Investment Act dislocated-worker program

Workforce Investment Act adult program

Adult basic education/English as a second language

Vocational rehabilitation

Workforce Investment Act youth program

$0

$0

$0

$1

$

$9

$3

$2

$2


18/66


TABLE1

ThecomparativeeffectivenessofthestateofWashingtonsworkforcetrainingprograms

Program

Employment

Earnings

Skills

(%participants

whoreceived

c

redential)

Participant

satisfaction

Employer

satisfac-

tion

Netemploy-

mentimpact

Netearnings

impact

Participant

returnon

public

investment

Taxpayerreturn

oninvestment

Apprenticeship

All:69%

Completers:83%

All:$47,1

15

Completers:

$63,1

41

52%

Classroom:

90%

On-the-job:

88%

93%

9.8percentage

points

$18,8

19

$91to

$1

$23to$1

Adultbasiceducation/Eng-

lishasasecondlanguage

48%

$16,8

08

N/A

93%

95%

Nosignificant

positiveimpact

$885

Nosignificantposi-

tiveim

pact

Nosignificantposi-

tiveimpact

Communityandtechnical

collegeProfessional-techni-

caleducation

All:65%

Completers:70%

All:$26,1

38

Completers:

$28,8

77

57%

91%

96%

10.1percentage

points

$9,2

53

$13to

$1

$3to$1

Workerretrainingat

communityandtechnical

colleges

All:66%

Completers:70%

All:$30,3

31

Completers:

$31,3

51

57%

86%

Samplesize

toosmall

7.5percentage

points

$2,9

36

$9to

$1

$2to

$1

DivisionofVocational

Rehabilitation

47%

$14,5

20

52%

75%

Samplesize

toosmall

12.4percentage

points

$1,4

28

$3to

$1

Nosignificantposi-

tiveimpact

DepartmentofServicesfor

theBlind

42%

$22,8

02

65%

81%

Samplesize

toosmall

N/A

N/A

N/A

N/A

Privatecareerschools

All:62%

Completers65%

All:$20,8

12

Completers:

$21,8

96

78%

85%

95%

3.4percentage

points

$2,2

00

Majorp

ublic

investmen

tisstu-

dentfinan

cialaid,

whichisoutsideof

scop

e

Majorpublic

investmentisstu-

dentfinancialaid,

whichisoutsideof

scope

Secondarycareerandtech-

nicaleducation

Completers:78%

Completers:

$10,9

80

Notlisted

99%

95%

8.4percentage

points

$2,1

07

$87to

$1

$9to$1

WorkforceInvestmentAct

(adultprogram)

67%

$22,2

62

40%

90%

93%

10.8percentage

points

$4,4

58

$8to

$1

$1.2

0to$1


(dislocatedworkerprogram

)

65%

$33,8

93

52%

88%

93%

4.7percentage

points

$3,5

40

$7to

$1

$2to$1


(youthprogram)

62%

$12,1

50

55%

96%

93%

4.3percentage

points

$2,0

08

$6to

$1

Nosignificantposi-

tiveimpact

WorkFirst(Washingtons

welfare-to-workprogram)

40%

$12,4

26

N/A

N/A

N/A

N/A

N/A

N/A

N/A

S 2 0 1 3 W h i k f i i l b

6 4


19/66


Theres room for growth

Successul use o appreniceships in oher counries compared o he relaively

limied unding and reach o appreniceships in he Unied Saes sugges ha

here is room o expand our program.

Oher indusrialized counries oday use apprenices ar more broadly o develop

a skilled workorce. Te Unied Saes has only 358,000 regisered apprenices and

250,000 employers ha sponsor regisered apprenices, alhough many o hem

join ogeher, leaving only 21,000 unique programs naionwide.65By comparison,

Germany has 1.8 million apprenices and abou 500,000 sponsoring companies

despie having a populaion less han one-hird o ha o he Unied Saes. I

America reached Germanys per capia level o appreniceship raining, our sysem

would suppor almos 7 million apprenices.66

Swizerland is anoher good example, where 77 percen o sudens begin a rain-ing program, usually a paid, cerified appreniceship. And Swiss appreniceships

are no jus or radiional appreniceship occupaions; o 190,000 apprenices in

Swizerland, 35,000 are in whie-collar business jobs.67

While Germany, Swizerland, and oher European counries make srong use o

appreniceships, he bes comparison is wih he Unied Kingdom, which is much

closer in characer o he U.S. labor marke and which only saw an explosion in

he number o appreniceships in he las decade. Scoland has expanded is use o

appreniceships, doubling is Modern Appreniceship program over he pas ew

years o approximaely 1 percen o is overall labor orce. I he Unied Saes were

o reach a similar level o per capia apprenices, here would be more han 1.5

million apprenices in he counrymore han hree imes he number we have

oday.68And in England, here were 520,600 new enrans ino appreniceships in

he 2011-12 academic year.69Adjusing or heir much smaller labor marke, ha

would be comparable o 2.5 million new enrans in he Unied Saescompared

o he 104,332 ha we acually saw in 2012.70

Federal financial suppor or appreniceships makes up jus a iny racion o

oal spending on raining programs. In 2012, he Office o Appreniceship a heDeparmen o Labor spen jus $28 million and suppored 155 ull-ime employ-

ees naionwide. In comparison, he Deparmen o Labor spen $3.2 billion ha

year or all raining and employmen services, no including an addiional $2 bil-

lion spen over he pas ew years o improve he communiy college sysem.71


20/66


Appreniceships in he Unied Saes atrac predominanly older workers, even

hough younger workers migh be able o subsanially gain rom hem. oday,

only abou 20 percen o apprenices in he Unied Saes are under age 25 and he

average age is closer o 30.72A he same ime, here are currenly close o 4 million

youh under he age o 25 wih a high school diploma who canno find ull-ime

work, many o whom could benefi rom an appreniceship.73

Expanding appren-iceships o provide more career opporuniies or odays unemployed young

workers could help reverse some o he economic damage wrough by high youh

unemploymen. Youh unemploymen poses a long-erm hrea o Americas

economy, as i has been shown o reduce workers wages, decrease revenues, and

increase he cos o governmen o healh care, crime, and social assisance.74


21/66


Significant barriers must be

overcome to expand apprenticeships

Tere are a number o hurdles o esablishing a more robus appreniceship

program in he Unied Saes. Te bigges challenge is a lack o awareness and

mispercepions o appreniceships among workers and businesses alike who may

no consider hem when considering raining or career opions. Few employers or

workers are aware o heir remendous benefis and reurn on invesmen. Some

companies may misakenly believe ha appreniceships only exis or union-

ized workers. Despie effors by he Deparmen o Labor o expand he reach o

appreniceships, hey are sill largely limied o radiional, male-dominaed occu-paions such as consrucion. Moreover, here is no argeed ederal unding o

help businesses offse he coss o sponsoring an apprenice, nor is here a naional

markeing effor o make businesses aware o he benefis o hiring apprenices.

Finally, a disjoined sysem o adminisraion prevens us rom collecing impor-

an daa and esablishing consisen cerificaion sandards across he counry.

And, while he Unied Saes once relied heavily on unions o overcome many o

hese challenges, declining union membership means businesses seeking o esab-

lish appreniceship programs have less assisance. Forunaely, smar policies can

address hese challenges.

In his secion, we will discuss in deail each o he ollowing barriers o wider

adopion o appreniceships in he Unied Saes:

Poor undersanding o appreniceships Limied occupaional and gender reach Coss o businesses Disjoined adminisraion Lack o research

Inconsisen cerificaion sandards Lack o coordinaion wih he educaion sysem educed unionizaion in he Unied Saes

Laer, we will ouline poenial inervenions o address hese challenges.


22/66


Poor understanding of apprenticeships

Due o he low profile o appreniceships in he Unied Saes, businesses and

workers are largely no amiliar wih hem. Only abou 0.2 percen o American

workers are in an appreniceship program,75which means ha ew American

workers have firshand experience wih how appreniceships work. Also, becauseno all appreniceship programs are run hrough or comply wih he require-

mens o he official regisered appreniceship sysem, businesses may no under-

sand wha a regisered appreniceship enails or how i can benefi is sponsors.

Furhermore, here is a widespread lack o awareness o he sources o ederal

unding ha can be used o deray he coss o an appreniceship.

Many American workers and businesses have incorrec or anachronisic views ha

preven hem rom considering appreniceships. Firs, many businesses misak-

enly believe ha appreniceships are limied only o unionized workorces and/

or require involvemen rom organized labor. Tere is a hisoric aneceden o hismisconcepion: From he passage o he Naional Appreniceship Ac in 1937

unil 1969, paricipans in a regisered appreniceship program did in ac need

o be members o a union. In 1969, however, he Deparmen o Labor changed

hese regulaions o allow anyone o paricipae, regardless o heir union affili-

aion. Ye a 2002 repor by he Souh Carolina Chamber o Commerce noed

ha some companies have developed nonregisered appreniceships delib-

eraely as a resul o he conusion regarding union involvemen in egisered

Appreniceships.76Appreniceships can offer grea benefis o employers wih

nonunionized workorces jus as hey can coninue o play an imporan role in

radiionally unionized fields.

Second, many businesses and workers alike share he percepion ha apprenice-

ships are only appropriae or he consrucion rades and oher manual labor

occupaions. o be sure, hey are no wrong ha he majoriy o acive apprenices

are in hose fields, bu he model o an appreniceship is applicable o a wide range

o occupaions and here cerainly are many companies ha offer appreniceships

in radiionally whie-collar fields.

Tird, many young workers presuppose ha because appreniceship programsrarely require he compleion o a college degree, hey do no lead o a well-pay-

ing, middle-class career. Effors by lawmakers and educaors o expand access o

our-year colleges and bachelors degrees have succeeded in increasing he share

o college graduaes in America over he pas several decades, bu hey have also


23/66


led oo many sudens o misakenly believe ha a our-year degree is he only

pah o achieve economic mobiliy. Few high school sudens and graduaes are

aware ha, as an apprenice, hey can achieve a long-erm career and a subsanial

wage premium wihou a our-year degree. While our-year colleges will remain a

good choice or many high school graduaes, expanding awareness o apprenice-

ships can open he door o a career pahway ha may be he bes opion or manysudens. In paricular, appreniceships should be an appealing avenue ino he

workorce or he one in hree high school graduaes oday who does no immedi-

aely go on o seek a our-year degree.77Moreover, becoming an apprenice does

no preclude urher possecondary educaion; appreniceship programs combine

on-he-job raining wih classroom-based educaion han can conribue o an

associaes or bachelors degree down he line.

Tere has been a significan social misrus o echnical educaion semming rom

he misaken noions ha vocaional educaion is or lower-perorming su-

dens and ha appreniceships require youh o ocus on a career rack oo early.Tis is rooed in ederal policy ha hisorically has srucurally separaedand

segregaedacademic and vocaional educaion, daing all he way back o he

Smih-Hughes Ac in 1917 ha promoed vocaional educaion.78Ye vocaional

raining oday is very differen han i was several decades ago, as New York Ciys

Mayoral ask Force on Career and echnical Educaion Innovaion repored:

Te weigh o his radiional separaion is reinorced in he lingering negaive

percepion o [career and echnical educaion]; many sill reer disparagingly

o vocaional educaion as i exised decades ago. From he sar, vocaional

educaion sudens ypically have been characerized as no being on a cogniive

par wih heir academic peers. Tey are hand minded, or example, versus

absrac minded, which include sudens who sudy an academic curriculum

and are bound or college. Tis disincion reflecs boh culural biases ha sill

permeae policy discussions oday and a hisory o suden racking ha limied

he poenial o oo many young people, especially sudens o color and hose

fom low-income amilies. Te percepion o [career and echnical educaion]

as a lesser rack fom radiional college-preparaory pahways is a major chal-

lenge o inorming sudens and amilies o he poenial value o new, innovaive

[career and echnical educaion] pahways. Te impac o his sigma has limiedhe opporuniy o capialize on he relevancy and rigor o curren [career and

echnical educaion] programs or an even broader populaion o sudens.79


24/66


In his bookBeyond College For All, scholar James

osenbaum urher argues, High schools

caugh up in he college-or-all myh, provide

litle job advice or preparaion, leading su-

dens o make unrealisic plans and hampering

boh sudens who do no go o college andhose who sar college bu do no finish.80

Appreniceships provide anoher opion: a

ocused vocaional possecondary educaion

ha incorporaes on-he-job skills raining and

relaed classroom-based educaion. In doing so,

hey provide a pah o skills developmen and

higher wages or hose sudens who do no go

o college or who do no finish college.

A public awareness campaign and significanlyupgraded markeing effors can make a big den

in hese misconcepions. England, where many o he same barriers had previ-

ously exised, saw a dramaic upick in appreniceships afer such a concered

markeing campaign in recen years.

500,000

400,000

Academic year (August 1 to July 31)

2002

-03

2003

-04

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

300,000

200,000

100,000

0

FIGURE 2

Expanding apprenticeships in England

Apprenticeship starts by academic year

Source: BIS Data Service 81


25/66


With broad-based political support, England has taken steps to

expand apprenticeships over the past two decades. The number of

new apprentices grew from just about 50,000 in the early 1990s, to

279,000 in 2009-10, to 520,600 in 2011-12from about 1 in every

1,000 citizens to 1 in every 100.82Prospective British apprentices can

today choose from 250 industries and more than 1,400 jobs.83

British political leaders embraced apprenticeships as an important

tool for boosting worker skills only after a period of steep decline

in apprenticeships through the 1970s and 1980s. In 1993, the

Conservative government launched Modern Apprenticeships, a

program that aimed to boost worker skills through the creation

of 150,000 new apprentices each year.84The Labour government

later expanded the range of qualifications that could be classifiedas apprenticeships, leading the way for increases in the number of

apprentices in nontraditional sectors such as health care, business,

and retail.85Recently, Prime Minister David Cameron proposed that

apprenticeships will be the new norm in a major speech at the

start of National Apprenticeship Week in March 2013.86He added

that theres no better way to back peoples aspirations than to

invest in apprenticeships, to invest in the skills that can make a dif-

ference to your careers.87

When it comes to apprenticeships, government leaders have put their

money where their mouth is. Even during this time of fiscal auster-ity, government funding for apprenticeships has grown from 800

million in 2006-07 to 1.2 billion in 2010-11, with plans to reach 1.5

billion in 2012-13.88In 2012, the government launched a country-

wide marketing campaign to promote apprenticeships to employers,

young people, and parents. Today, subway posters, taxi sides, and

newspapers across the country advertise that 82% of employers

take on Apprenticeships to build skills in their business and fo

five employers say Apprenticeships will play a bigger part in th

recruitment policy in the future.89The National Apprenticeship

Service recently awarded a team of young developers from No

ham 10,000 to create a Facebook App-renticeships app that

offer resume advice, case study videos, and a search tool to hel

find an apprenticeship, complementing the National Apprentic

Services already extensive online and social media presence.90

To be sure, the effort to expand apprenticeships in England fac

its share of challenges. While 91 percent of employers are awar

government-funded apprenticeships, employer participation r

relatively low at only 9 percent.91Compared with other Europe

countries that support apprenticeships, the quality in terms of attainment of British apprenticeships is low.92Additionally, wom

people of color, and workers with learning disabilities participa

at disproportionately low levels.93And, while apprenticeships w

sold largely as a fix for high levels of youth unemployment, mu

the growth in apprenticeships has been among workers age 25

older.94

Nevertheless, the expansion of apprenticeships in England has

been shown to offer many benefits to workers, employers, and

economy. Workers who complete apprenticeships in England e

much as 150,000 more over their careers than noncompleterswage premium comparable to that of an average university gra

ate.95And, according to an analysis by the Centre for Economic

and Business Research, the 3.8 million projected apprenticeshi

completers over the next decade will contribute 2.4 billion, or

percent of gross domestic product, to the U.K. economy in the

productivity gains.96

Apprenticeships in England


26/66


Limited occupational and gender reach

While appreniceships have been slowly expanding ino nonradiional occupa-

ions here in he Unied Saeshere are currenly more han 1,000 apprenice-

able occupaions97he bulk are sill in radiional, male-dominaed fields. In

he las decade, he Deparmen o Labors Office o Appreniceship has made aconcered effor o regiser programs in new, high-growh areas, such as advanced

manuacuring, healh care, geospaial echnology, inormaion echnology, and

bioechnology. Tis has led o a new breed o U.S. appreniceships. Te Ceners

or Disease Conrol and Prevenion recenly began sponsoring regisered appren-

iceships in public healh inormaics,98and or he firs ime, medical docors and

Ph.D.s will paricipae in a ormal regisered appreniceship. O course, nearly all

medical docors paricipae in an appreniceship o sors (hough i is no regis-

ered as such)during heir inernships and residencies where docors receive

on-he-job and classroom-based raining while receiving a salary. Te same prin-

ciple can be applied o many occupaions.

Te effors by he Deparmen o Labor o expand appreniceship occupaions

have been paying off: By 2007, 46 percen o all new regisered appreniceship

programs were in high-growh indusries. Ye here is sill work o be done. Tese

newly regisered programs in high-growh indusries composed only 30 percen o

all acive apprenices.99

And in 2012, only 6 percen o acive apprenices in he Unied Saes were women,

up slighly rom 5 percen in 2008.100Tis is no surprising, given ha women make

up no more han 6 percen o any one o he op 10 appreniced occupaions in

2012, which were all in he radiional skilled rades. (see able 2)


27/66


TABLE 2

Top 10 apprenticed occupations in fiscal year 2012

Occupation title Active apprentices

Percent of total

employed in occupation

who are women

Electrician 36,742 1.8

Carpenter 15,479 1.6

Plumber 13,201 1.3*

Pipefitter 8,586 1.3*

Construction craft laborer 7,947 2.9

Sheet metal worker 7,714 4.6

Roofer 5,479 1.5

Structural steel/ironworker 5,041 2.8

Painter 3,560 5.5

Pipefitter (sprinkler fitter) 3,266 1.3*

*The Current Population Survey reports pipelayers, plumbers, pipefitters, and steamfitters in a single category, in which women make up1.3 percent of the total employed.

Source: Employment and Training Administration, Data and Statistics: Registered Apprenticeship National Results; Bureau of LaborStatistics, Current Population Survey, Table 11, Employed persons by detailed occupation, sex, race, and Hispanic or Latino ethnicity.

In comparison, England has overhauled is appreniceship program o he poin a

which a majoriy o new apprenices now choose programs in he service secors,

such as business adminisraion and reail. As a resul, in 2012, women made up

he majoriy o new apprenices in England.101

In order o increase he number o U.S. apprenices, i will be necessary o inro-

duce appreniceships o occupaions ha have no radiionally used apprenices.

In doing so, we can also increase he share o women who become apprenices.

Cost to businesses

Businesses ha sponsor apprenices mus be willing o ake on significan coss,

including ime rom skilled employees o rain apprenices, equipmen or rain-

ing, addiional workers compensaion insurance, apprenices wages, and, in many

cases, uiion or relaed classroom-based raining. In addiion, he adminisra-ive processes and paperwork may deer companies rom sponsoring regisered

apprenices. Moreover, companies may be relucan o esablish new apprenice-

ships in nonradiional occupaions i hey have insufficien suppor rom sae

appreniceship offices.


28/66


Unlike in many oher counries, where he public finances a leas a porion o he

school-based componen, pays a porion o apprenices wages, or provides ax

credis o subsidize sponsor program coss, here is no such ederal incenive in

he Unied Saes. Workorce Invesmen Ac programs may be able o cover some

o hese coss, bu hese limied ederal resources are allocaed by local Workorce

Invesmen Boards and are no guaraneed. Some saes have esablished axincenives or businesses offering appreniceships; Souh Carolina, or example,

provides a $1,000 ax credi per apprenice.

Given hese no-insignifican coss, businesses may ear ha, afer spending a grea

deal o resources raining an apprenice, he worker may be lured by a compeior

offering higher wages. Bu according o a repor by he Souh Carolina Chamber

o Commerce, many companies wih egisered Appreniceships repor ha

such raining programs cemen a solid relaionship wih heir workers ha resuls

in greaer company loyaly and job saisacion. Furhermore, he Deparmen o

Labors survey o employers noed ha poaching was no seen o be a problem aall by 46 percen o employers who acually sponsor programs, and hose who did

view i as a problem sill recommended appreniceships by an overwhelming 85

percen.102

As we learned in Souh Carolina, even a modes public invesmen aimed a offse-

ing some o he coss o appreniceship sponsors can go a long way oward incen-

ivizing companies o hire appreniceships. A number o oher saes also offer ax

credis or oher subsidies or appreniceships. (see able 3)


29/66


TABLE 3

Government subsidies for apprenticeships by state

State Benefits

ArkansasTax credit to employers (youth apprenticeships): lower of $2,000 and 10 percent of youth apprentice

wages103

California

Subsidies to education agencies: to partner with apprenticeship training committees to train apprentices

Subsidies to apprenticeship training committees: to cover classroom-related and supplemental instruction

costs104

Connecticut

Tax credit to employers (manufacturing, plastics, and plastics-related trades): lower of $4,800, $4 per hour

multiplied by the total number of hours worked by the apprentice during the first half of a two-year appren-

ticeship or the first three-quarters of a four-year apprenticeship, and 50 percent of the total wages paid to

the apprentice during the first half of a two-year apprenticeship or the first three-quarters of a four-year

apprenticeship

Tax credit to employers (construction trades): lower of $4,000, $2 per hour multiplied by the total number of

hours worked by the apprentice during a four-year apprenticeship, and 50 percent of the total wages paid to

the apprentice during a four-year apprenticeship105

Florida Subsidies to employers: to cover training costs (provided through school districts and community colleges)106

Iowa Subsidies to employers: to cover classroom and on-the-job training costs for apprentices in high-technologyjobs or jobs utilizing the most up-to-date technologies (provided through community colleges)107

KansasSubsidies to apprentices (child care and early education industry): to cover books, fees, and tuition for

required technical instruction108

LouisianaTax credit to employers: lower of $1,000 and $1 per hour multiplied by the total number of hours worked by

the apprentice*

Maine Subsidies to apprentices: to cover up to 50 percent of related tuition costs109

MissouriTax credit to employers (youth apprenticeships): 50 percent of youth apprentice wages and 30 percent of

property and equipment costs111

New JerseySubsidies to employers: to hire graduates of the Youth Transitions to Work program ($5,000 grant)112

Subsidies to country coordinators: to bolster local apprenticeship programs113

Rhode IslandTax credit to employers (machine tool/metal trade and plastic process technicians): lower of $4,800 and 50

percent of apprentice wages114

South Carolina Tax credit to employers: $1,000 per apprentice115

TexasSubsidies to employers: to cover related classroom instruction costs (provided through public educational

institutions)116

VirginiaTax credit to employers: 30 percent of classroom training costs (with a limit of $100 per apprentice if the

coursework is incurred at a private school)117

Washington Subsidies to apprentices: 50 percent of tuition costs at public community and technical colleges118

West VirginiaTax credit to employers: lower of $2,000, 50 percent of apprentice wages, and $2 per hour multiplied by the

total number of hours worked by the apprentice119

* Louisiana Workforce Commission, Registered Apprenticeship Tax Credit Quick Reference Guide, available at http://www.laworks.net/Downloads/App/RegisteredApprenticeshipTaxCreditGuide.pdf (last accessed November 2013).

Finally, as we will discuss in greaer deail laer, while he coss o appreniceships may be well anici-


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paed by employers, here is very limied research ino heir economic benefis.

Tis skews cos-benefi calculaions by businesses, making public invesmens in

appreniceships all he more valuable o prospecive sponsors.

Lack of marketing

Alhough a handul o saes engage in some markeing aciviies, markeing o

appreniceships in America is pracically nonexisen. While he number o appren-

ices and appreniceship programs in he Unied Saes has declined over he pas

decade, a srong markeing campaign could reverse ha rend. Using England as an

example, a susained and inense markeing campaign here, combined wih comple-

menary policy changes, more han doubled appreniceships during he same ime

period ha he Unied Saes saw declines. (see Figures 2 and 3)

Sae officials lack sufficien,easily accessible unding oppor-

uniies o mee he need or

increased markeing, oureach,

and raining effors. An official

in Uah, or example, noed

ha here simply is no enough

money or hem o do marke-

ing; insead hey mus rely

mosly on word o mouh. Many

appreniceship offices do he

bulk o heir oureach hrough

websies, orms, and oher

online communicaions, which

can be ar less effecive han

in-person meeings and acive

and susained argeed oureach.

Many saes do no even have

up-o-dae websies or accessi-

ble web daabases, limiing heirabiliy o marke o businesses

or prospecive apprenices.

Active Apprentices New Apprentices

Active Programs New Programs

500,000

400,000

2002 2004 2006 2008 2010 2012

2002 2004 2006 2008 2010 2012

300,000

200,000

100,000

0

FIGURE 3

Apprenticeships have been declining in the United States*

Source: U.S. Department of Labor Office of Apprenticeships

* These figures do not include nearly 74,000 apprenticeships in the Military Apprenticeship Program, a formal militarytraining program.

40,000

32,000

24,000

16,000

8,000

0

250,000

200,000

2002 2004 2006 2008 2010 2

2002 2004 2006 2008 2010 2

150,000

100,000

50,000

0

5,000

4,000

3,000

2,000

1,000

0


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Disjointed administration

Any effor o expand appreniceships in he Unied Saes mus address he con-

using and disjoined ederal and sae sysem o adminisraion.

egisered appreniceships are adminisered by he Office o Appreniceships wihinhe Deparmen o Labor, which consiss o a cenral naional office, regional offices,

and represenaives assigned o each sae. Te Office o Appreniceship operaes

direcly in 25 saes and delegaes some o is operaional auhoriy o sae appren-

iceship agencies in anoher 25 saes and he Disric o Columbia. Te Office o

Appreniceship approves new appreniceable occupaions and heir sandards, regis-

ers programs and apprenices, proecs worker saey and healh, issues cerificaes

o compleion, and ensures ha programs offer high-qualiy raining and produce

skilled workers. Te office also works o promoe appreniceships and o expand

heir reach ino high-growh secors. Sae appreniceship agencies spend mos o

heir resources on approving he sandards or new appreniceable occupaions andregisering new programs and apprenices.

Te Office o Appreniceship has been quie successul a carrying ou is core

responsibiliies, such as regisering programs and apprenices, ensuring high

sandards or appreniceable occupaions, and proecing apprenice saey and

healh. Te biurcaed ederal-sae sysem o adminisraion, however, hampers

daa collecion and prevens he esablishmen o a uniorm naional cerifica-

ion sysemboh o which are criical o he effecive use o appreniceships in

he Unied Saes.

Lack of research

While researchers have devised esimaes o he economic benefis o apprenice-

ships o workers and he public, we sill lack esimaes o he reurn on inves-

men o he American businesses ha sponsor hem. Employer surveys indicae

ha businesses benefi rom hiring apprenices, bu hard daa would help marke

apprenices o new companies. For insance, research showing ha Canadian

businesses gain $1.47 or every $1 hey inves in raining apprenices has beena boon o markeing effors in ha counry.121Ye in he Unied Saes, we don

even know he average cos borne by an employer or an appreniceship. Beter

research can help esablish he credibiliy o he raining model in his counry.

Furhermore, more advanced ongoing research ocused on he relaive reurns o


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invesmen in specific occupaions could help arge markeing effors by ideniy-

ing he mos appreniceable occupaions generally. Occupaional research could

also help ocus effors o increase womens paricipaion in appreniceships.

Bu his research is hampered by he lack o a ully cenralized, coheren, and

discernible sysem o adminisraion and accrediaion. Tis in urn makes pro-gram monioring and assessmen almos impossible. Because o he spli beween

he Office o Appreniceship and sae appreniceship agencies, no single eniy is

adminisering, regisering, and monioring all ongoing appreniceships in he Unied

Saes. Sae appreniceship agencies requenly ail o collec meaningul daa on

heir appreniceship programs. Tose ha do collec daa ofen do no repor his

daa o he Deparmen o Labor or he Bureau o Labor Saisics or analysis.

Te Office o Appreniceships delegaion o daa collecion and reporing o indi-

vidual sae agencies resuls in inadequae evaluaion and monioring o apprenice-

ship programs. Specifically, he ederal governmen does no enorce sae officedaa enry ino he egisered Appreniceship Parners Inormaion Daa Sysem,

or RPIDS, he online sysem or daa collecion on appreniceships. Currenly,

RPIDS is used by 25 Office o Appreniceship-adminisered saes and 8 o he 25

sae appreniceship agencies or a oal o jus 33 ou o 50 saes.122

Moreover, RPIDS daa is no available or he public o view or research pur-

poses. Public inormaion abou he scope and compleion raes o individual

appreniceship programs in saes would be useul o boh prospecive apprenices

and researchers. Even naionally, he Office o Appreniceship publishes only

he mos rudimenary daa on is public websiesae daa or fiscal years 2011

and 2012 only and naional daa going back only o fiscal year 2002. In each case,

inormaion is limied o he number o acive apprenices, acive programs, new

apprenices, new programs, and compleers. Te websie does no include educa-

ion atainmen saisics, wages, gender breakdown, occupaional breakdown

beyond he op 10, or hisorical sae-level daa.123

No only is his crucial inormaion no web accessible, bu we ound ha i is

impossible o find alogeher. We atemped o conac every sae appreniceship

office o collec daa on sae program adminisraion, and we pulled as muchinormaion as possible off o heir public websies. We requesed a defined se

o inormaion, including each offices budge, he number o ull-ime employee

equivalens, he curren number o program sponsors in he sae, he number

o public offices around he sae, and he services provided o businesses (or


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example, assisance wih Deparmen o Labor paperwork, work-skill assessmens,

curriculum developmen, and more). In some cases, offices were incredibly help-

ul, bu in many cases, offices did no have he inormaion available, were no

reachable, simply reused o answer, or were using proprieary (and hence incom-

paible) definiions or daa.

While he ederal Office o Appreniceship was helpully able o provide some

unpublished daa, i repored ha i did no collec or compile all o he daa we

requesed. Clearly, here is room o improve access o inormaion on he use o

appreniceships in he Unied Saes. Exising daa, however, ell us ha apprenice-

ships offer grea benefis o workers and an excellen reurn on invesmen o he

public. And, alhough research suggess ha hiring apprenices benefis businesses as

well, beter daa collecion would help us improve he design o our appreniceship

programs and make a compelling case o businesses o hire apprenices.

Standards

Employers are hungrier han ever or uniorm compeency-based credenials

ceriying ha a worker has demonsraed his or her abiliy o perorm a specific

se o skills. Employers are also pushing or sackable, iered credenials ha allow

workers o progress up he skills and career ladder one rung a a ime and o exi

and re-ener he raining sysem over he course o heir livesinsead o ron-

loading all o he raining. For example, he Manuacuring Insiue, he nonpar-

isan affiliae o he Naional Associaion o Manuacurers, has inroduced he

Manuacuring Skills Cerificaion Sysem o provide workers access o a sysem o

naionally porable, indusry-recognized credenials.

o be sure, he regisered appreniceship sysem had made some progress

oward developing a more uniorm and sackable credenial sysem. W hile

appreniceships have slowly been moving oward compeency-based or hybrid

qualificaion models, ha rend mus be acceleraed or employers o depend

more heavily on hem. And in 2008, he Deparmen o Labor began o allow

sponsors o ask or inerim credenials o be issued prior o compleion o he

appreniceship.124

While his is a sep oward a sackable credenial model, iis no as well-defined as he Manuacuring Skills Cerificaion Sysem, which

includes cerificaions or basic skills all he way hrough occupaion-specific

skills. Tese cerificaions include:


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Te Naional Career eadiness Cerificae, which verifies baseline academic

skills and general readiness or he workorce Te Manuacuring Skills Sandard Council Cerified Producion echnician

Cerificaion, which covers areas such as saey, producion processes, maine-

nance awareness, and qualiy assurance125

Tireen specialized echnical knowledge and skills cerificaions or specificoccupaions126

Te U.S. regisered appreniceship sysem is also no nearly as exendible as

Englands hree-iered sysem o inermediae-level, advanced-level, and higher-

level appreniceships.127

Furhermore, regisered appreniceships vary across he counry. Unlike he

Manuacuring Skills Cerificaion Sysemwhich esablishes a single cerificaion

sandard across he counryhe naional regisered appreniceship sysem includes

25 saes ha each independenly review and approve appreniceable occupaions.As a resul, sandards are no perecly uniorm across all sae lines, and scarce sae

governmen unds are spen reviewing sandards insead o engaging in criical mar-

keing effors. Tis disjoined regisraion sysem has been shown no o significanly

affec worker oucomes, bu i adds unneeded complexiy and makes i harder o

make a naional shif oward compeency-based sandards.

Te regisered appreniceship sysem ook anoher smar sep oward unior-

miy when he Deparmen o Labor deermined ha, oher han he Office o

Appreniceship, only official sae appreniceship agencies have he auhoriy o

regiser occupaions and appreniceships.128Prior o 2008, sae appreniceship

councils o business, labor, and oher public ineressbu no all composed

o public officialshad he auhoriy o regiser occupaions, which resuled

in more limied uniormiy and accounabiliy o ederal Deparmen o Labor

oversigh. oday, he power o regiser appreniceable occupaions lies exclu-

sively wih he ederal Office o Appreniceship and wih ederally recognized

sae appreniceship agencies. Furhermore, he new 2008 rules required sae

appreniceship agencies o reapply or ederal recogniion wihin wo years and

again every five years. While hese changes did no ully uniy regisered occupa-

ions across all saes, hey have increased accounabiliy and oversigh over heregisered appreniceship sysem.


35/66


Finally, several sae appreniceship officials noed ha he exisence o unregisered

appreniceshipsranging in characer rom inernships o more robus raining

modelscan be a significan challenge or selling regiseredappreniceships. Some

employers may quesion he need o paricipae in he naional appreniceship

sysem, while oher employers may see poor oucomes rom unregisered appren-

iceships and decide o orgo appreniceships enirely. And because unregiseredappreniceships are by definiion no on he books, i can be hard or sae or

ederal appreniceship saff o reach ou o hose sponsors o ge hem involved in

more sysemaic effors, improve coordinaion wih local communiy and echnical

colleges, or o connec hem wih available financial suppor.

Coordination with educational systems

Linkages beween businesses and communiy and echnical colleges have hisori-

cally been poor. Communiy and echnical college sysems have no rouinelysough ou inpu rom area businesses o help shape curricula and coordinae wih

appreniceship and oher ouside raining programs. Even where some o hose

links exis or have begun o be buil, here are sill barriers or ensuring ha local

communiy and echnical colleges are offering he courses and programs needed

by companies or heir appreniceship raining. Some businesses have also raised

concerns wih he limied flexibiliy o communiy college classes, making i hard

or sponsors o complemen on-he-job raining wih relaed classroom-based

insrucion. In Souh Carolina, lawmakers addressed his problem head-on by

locaing he appreniceship office wihin he echnical college sysem.129

Similarly, sudens have had difficuly ranserring credis rom occupaional

cerificae and associaes degree programs earned during an appreniceship o

bachelors degrees.130While so-called ariculaion agreemens have increasingly

been pu ino place o help ranser such credisand o offer credis or on-he-

job raining as par o regisered appreniceshipshey are sill relaively rare.

Consequenly, appreniceship compleers who go on o earn a degree ofen ace

significan barriers.

In Indiana, Ivy ech Communiy College has developed an iniiaive ha shouldserve as an excellen example o how communiy and echnical colleges can effec-

ively coordinae wih appreniceship programs. Workers enrolled in a recognized

appreniceship raining program can obain an associaes degree or echnical cer-

ificae rom Ivy ech. Appreniceship rade programs, such as carpeners, elecri-


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cians, iron workers, and shee meal workers, paricipae in he program.131As par

o he program, Ivy ech awards credi or he ime apprenices spend on he job,

and apprenices may ake several Ivy ech general educaion courses as he relaed

educaional componen o he appreniceship raining. Apprenices who receive a

wo-year degree rom Ivy ech may use i as he basis o pursue a bachelors degree

or, in some fields, a masers degree.132

Declining union membership

For decades, unions have played a key role in offering appreniceship programs

and esablishing srong cerificaion sysems. Bu as unions shrink, so does

heir abiliy o help us overcome he many hurdles o seting up appreniceship

programs ha we have oulined here. Unions help esablish, manage, and und

appreniceship raining programs in parnership wih employers, which has led

he Organisaion or Economic Co-operaion and Developmen o poin ouha counries wih srong appreniceship sysems ofen have a close and acive

involvemen o boh o he social parners represening employers and he rade

unions.133Addiionally, research has shown ha join programs wih union par-

icipaion have higher enrollmens o women and people o color and significanly

beter perormance as measured by atriion and compleion raes.134

In paricular, unions are well siuaed o ideniy and codiy he occupaional skills

requiremens necessary or regisering an occupaion as appreniceable. Moreover,

unions are responsible or developing many robus cerificaion sysems or com-

peency-based appreniceships. As a resul, appreniceship sponsors ha operae

wihou union suppor mus work subsanially harder o develop compeency-

based cerificaion sysemseven hough hey may preer hem o cerificaions

based on duraion o paricipaion.135

While join union-managemen programs now only accoun or abou one-ourh

o sponsors in he Unied Saes, hey coninue o accoun or a large number o

apprenices.136No surprisingly, as union membership has declined over he pas

decades, so has he number o appreniceships in he counry. Indeed, our analysis

shows an exremely srong posiive correlaion (0.87) beween acive apprenice-ship programs and union membership raes going back o 2001.


37/66


Te hisorical declines in union membership

raes have likely aken a significan oll on

appreniceships here in America. Given he cru-

cial role unions play in esablishing and main-

aining srong appreniceship programs, any

effor o expand appreniceships in he UniedSaes would benefi grealy rom increasing

union membership and boosing apprenice-

ships among nonunionized workorces.

In sum, alhough appreniceships offer grea

benefis o workers and businesses alike, a

number o sumbling blocks have prevened

hem rom gaining he widespread populariy

in he Unied Saes ha hey enjoy in many

oher naions. Forunaely, we can overcome allo hese obsacles wih smar, low-cos policy

inervenions. Dramaically increasing he

number o apprenices in he Unied Saes will

require boosing public awareness, expanding

ino nonradiional occupaions, miigaing he

coss o sponsors, enhancing research and ceri-

ficaion sandards, and improving coordinaion

wih educaion sysems. In he nex secion, we

ouline a se o policies o do jus ha.

30%

25%

1964 1970 1976 1982 1988 1994 2000 2006 2

20%

15%

5%

10%

0

FIGURE 4

Union membership rate

Source: Updated data from Barry T. Hirsch, David A. MacPherson, and Wayne G. Vroman, EstimatUnion Density by State, Monthly Labor Review 124 (7) (2001), available at http://union-

stats.gsu.edu/MonthlyLaborReviewArticle.htm

.07 9.62

FIGURE 5

Active apprenticeships per thousand

1864 year olds, by state

Source: Authors analysis of Employment and Training Administration, Registered ApprenticeshNational Results available at http://www.doleta.gov/OA/data_statistics.cfm (last accessed Nove2013) and U.S. Census Bureau, Census Summary Table File 1 Table 3: Population by Sex and Sele

Age Groups for the United States, Regions, States, and Puerto Rico: 2010, available at http://ww-w.census.gov/prod/cen2010/briefs/c2010br-03.pdf.


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TABLE 4

State apprenticeship programs

State

Administered by

state (SAA) or

federal (OA)

Active

apprentices,

FY 2013

Active

programs,

FY 2013

New ap-

prentices,

FY 2013

New

programs,

FY 2013

Completers,

FY 2013

Location of

apprenticeship office

Alabama OA 4,435 101 1,160 9 609 U.S. Dept. of Labor

Alaska OA 2,916 361 755 39 249 U.S. Dept. of Labor

Arizona SAA 4,554 105 1,162 2 499 Arizona Commerce Authority

Arkansas OA 4,917 92 1,483 3 452 U.S. Dept. of Labor

California OA 49,794 228 13,871 6 4,343 U.S. Dept. of Labor

Colorado OA 6,078 248 2,158 6 652 U.S. Dept. of Labor

Connecticut SAA 10,459 *** 6,247 *** 1,379 Connecticut Labor Departm

Delaware SAA 1,196 322 309 28 51Delaware Office of Labor Law

Enforcement

District of

ColumbiaSAA 224 282 224 *** 200

DC Apprenticeship Council

(public-private partnership)

Florida SAA 11,787 251 3,525 8 1,281 Florida Department of Educa

Georgia OA 6,258 202 1,202 3 547 U.S. Dept. of Labor

Guam SAA 841 99 199 8 31 U.S. Dept. of Labor

Hawaii SAA 8,288 81 1,386 *** 532Hawaii Department of Labor

Industrial Relations

Idaho OA 1,221 181 390 9 140 U.S. Dept. of Labor

Illinois OA 13,616 555 2,952 14 2,251 U.S. Dept. of Labor

Indiana OA 18,718 839 5,907 48 2,845 U.S. Dept. of Labor

Iowa OA 8,037 662 2,908 98 1,310 U.S. Dept. of Labor

Kansas SAA 1,970 291 381 6 176 Kansas Department of Com-merce

Kentucky SAA 2,733 149 678 8 226 Kentucky Department of Lab

Louisiana SAA 4,949 55 1,439 *** 367 Louisiana Department of Lab

Maine SAA 995 195 329 10 135 Maine Department of Labor

Maryland SAA 7,904 488 573 3 82Maryland Department of Lab

Licensing and Regulation

Massachusetts SAA 10,084 1,606 4,558 191 1,680 U.S. Dept. of Labor

Michi

training for success: a policy to expand apprenticeships in the united states

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