When Americans think of apprenticeship, their thoughts more often turn to reality television than worker training. It’s no wonder: Despite a centuries-long history and federal support dating back to the 1930s, apprenticeship is vastly underutilized in the United States. As a result, many Americans are unfamiliar with apprenticeships and how they operate.
That may be beginning to change. The Obama administration has just awarded $175 million in American Apprenticeship Grants, which will be administered by the U.S. Department of Labor and used to establish and expand proven and promising apprenticeship models. These grants will not only support a number of new activities to expand apprenticeship; they will also serve as a model that can galvanize states, localities, and industry to test new approaches to promoting and utilizing apprenticeship as a workforce development strategy.
Apprenticeship is a time-tested, proven worker-training strategy that pairs on-the-job training with classroom instruction and allows workers to earn a wage while they learn. As concerns from U.S. employers about a skills gap and an aging workforce intensify, apprenticeship programs represent an obvious solution to current and anticipated worker shortages.
Apprenticeships provide benefits to both workers and employers. Employers get a pipeline of workers who are trained to meet their specific needs, which can lead to increased productivity and a stronger bottom line. Indeed, 97 percent of U.S. apprenticeship sponsors—private employers who offer apprenticeships—would recommend apprenticeship programs. For workers, apprenticeships offer the opportunity to earn a wage while learning on the job, freeing them from the difficult choice of pursuing additional education or providing for themselves or their families in the short term. Because they are directly linked to private-sector demand, apprenticeships prepare workers with in-demand skills that can lead to significant increases in their lifetime earnings. In fact, according to the U.S. Department of Labor, the post-apprenticeship employment rate is more than 87 percent and the average starting salary tops $50,000 per year.
Recognizing the largely untapped potential for apprenticeship in the United States, President Barack Obama has called for doubling the number of U.S. apprentices within the next five years. The American Apprenticeship Grants will jump-start that effort by providing $175 million to 46 public-private partnerships to develop or expand high-quality, effective apprenticeship programs. These grants will be used to complement and build on efforts by the U.S. Department of Labor’s Office of Apprenticeship to extend the reach of apprenticeship programs. While apprenticeship has historically been concentrated in a handful of sectors, these awards will be used to launch programs in a broad range of in-demand fields, including information technology, health care, and advanced manufacturing.
The U.S. Department of Labor expects that a minimum of 34,000 new apprentices will be trained through the initiative. While this is a promising start, this investment alone will not achieve the president’s goal. Nor will it put the United States in line with other countries—such as Germany and the United Kingdom—that have more advanced apprenticeship programs and policies. At the federal level, policymakers have demonstrated a willingness to go further on apprenticeship. This year, President Obama’s budget included a request for $2 billion to establish an Apprenticeship Training Fund. Meanwhile, Sens. Cory Booker (D-NJ) and Tim Scott (R-SC) introduced the Leveraging and Energizing America’s Apprenticeship Programs Act, or LEAP Act, which would establish a federal tax credit for employers who hire new apprentices. Unfortunately, neither of these proposals have received consideration in Congress.
If apprenticeship is to take hold in the United States, it will require increased investment and new policies on the federal level. However, state and local governments, along with employers—even those without American Apprenticeship funding—need not wait for those investments to materialize in order to establish a strong foundation to develop and scale up apprenticeship programs. There are a number of policies that state and local governments can enact and actions that industry can take now to support apprenticeships, many of which the Center for American Progress advocated for in a recent report.
- Establish employer incentives: South Carolina’s Apprenticeship Carolina program, which combines an employer tax credit with technical assistance to employers and a hands-on marketing strategy, has become the model for expanding apprenticeship at the state level. Since the program was established, the number of companies hiring apprentices grew from 90 in 2007 to 750 in 2015.
- Award college credit for apprenticeship: In 2014, the U.S. Department of Labor established the Registered Apprenticeship-College Consortium, which allows graduates of registered apprenticeship programs to turn their on-the-job and classroom training into college credit toward an associate’s or bachelor’s degree. More than 200 colleges have joined the consortium since the program was launched. States should ensure that their community colleges join the consortium so that apprentices have the opportunity to accrue college credit through their training.
- Leverage the public workforce system: The federal Workforce Innovation and Opportunity Act, or WIOA, promotes alignment between apprenticeships and the workforce system. This includes making registered apprenticeship programs automatically eligible to appear on each state’s Eligible Training Provider List, or ETPL, and thus able to accept federal WIOA training dollars. States should use WIOA implementation—which is currently underway—as an opportunity to increase investments in apprenticeship. States should also conduct outreach to existing apprenticeship programs to urge their placement on the ETPL and leverage the 15 percent of WIOA funds set aside for state governments to develop and implement strategies to expand apprenticeship.
- Consider handing off the program registration function to the Office of Apprenticeship: Half of the states currently rely on their own state apprenticeship agency to perform the registration function, while the other half rely on the federal Office of Apprenticeship to perform this task. By allowing the Office of Apprenticeship to take over registration, state apprenticeship agencies can devote more time and resources to marketing apprenticeship to businesses in the state.
- Invest in apprenticeship: Some states already make annual investments in apprenticeship, and in recent years, the number of states making or proposing to make these types of investments has grown. Iowa, for instance, recently enacted the Iowa Apprenticeship and Job Training Act, which tripled the state’s investment in apprenticeship.
- Leverage the public workforce system: Local workforce development boards that are responsible for administering the WIOA on the local level can use on-the-job contracts, incumbent worker or customized training funds, or Individual Training Accounts, or ITAs, to help pay wages for apprentices. Some localities also fund some or all of the cost of related instruction.
- Facilitate the establishment of joint apprenticeship training programs: One way to do this is through sector partnerships, which bring together multiple businesses in an industry cluster, education providers, labor organizations, and other stakeholders to develop workforce strategies. The WIOA requires local workforce development boards to develop, convene, or implement industry or sector partnerships. Local boards should encourage sector partnerships to consider using apprenticeship to address their current and future workforce needs and, in conjunction with the state apprenticeship office, provide guidance and technical assistance where appropriate.
- Become an apprenticeship sponsor: Employers that are interested in starting an apprenticeship program should contact their state apprenticeship office and consult the U.S. Department of Labor’s Office of Apprenticeship for available resources on establishing an apprenticeship program.
- Partner with intermediaries to develop an apprenticeship program: An effective intermediary—an organization that coordinates between stakeholders, including employers, educational institutions, federal agencies, and state governments—is often the key to a successful apprenticeship program. Employers that are considering sponsoring an apprenticeship program should work with an intermediary.
Apprenticeship has tremendous potential to serve as a real solution for policymakers and employers seeking to grow and maintain a skilled workforce that is prepared to meet the demands of America’s 21st-century economy. Today’s announcement of the American Apprenticeship Grants is a crucial step toward realizing that potential. While larger policy changes are still needed, this federal investment will help catalyze new activities and investments in apprenticeship across the United States and inspire additional states and local efforts to expand apprenticeship.
Angela Hanks is a Senior Policy Analyst who handles workforce development on the Economic Policy team at the Center for American Progress.
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Director, Workforce Development Policy