Abstract
If you think apprenticeship sounds like a relic from centuries past — good enough for Ben Franklin but a no-go in a 21st-century economy — think again, Institute Fellow Robert Lerman explains in a commentary for thestate.com
A better way to get educated, employed
thestate.com (Columbia, S.C.), August 3, 2009
By Robert Lerman
With a 10 percent national unemployment rate looming, the race is on to create jobs quickly and to skill-train the workforce so the next recession hurts less. President Obama's policy is to help millions more young people and laid-off workers attend community colleges. But community colleges already are swamped by job-seekers' stepped-up demand for training, and government funds for higher education already are stretched perilously thin.
As cash-strapped states struggle to sustain support or minimize cuts to community colleges, federal stimulus money and Pell grants can help more students and displaced workers enroll. But the end result could well be crowded classrooms presided over by less qualified teachers. Worse, many eager applicants will be turned away.
Is there a grade A solution? Luckily, yes. Demonstrably more effective at increasing earnings than a community college education is the nation's apprenticeship system. One model getting off the ground in South Carolina expands apprenticeship and blends it with technical college.
If you think apprenticeship sounds like a relic from centuries past — good enough for Ben Franklin but a no-go in a 21st-century economy — think again. Nearly all advanced economies still incubate skills in the workplace. In Germany, the world's leading exporter of advanced goods, 60 percent to 70 percent of young people enter formal apprenticeships, signing up for years of rigorous on-the-job learning combined with academic coursework.
Apprenticeship is expanding significantly in the United Kingdom, Australia and other countries too. And the European Commission is calling for the public and private sectors to create 5 million apprenticeships by the end of 2010.
Largely unnoticed, the U.S. apprenticeship system currently trains over 500,000 workers. Apprentices learn while they earn, working as a regular employee, contributing to companies' output and mastering skills under the wing of trainers, who themselves learned mainly by doing. Apprentices take formal courses too, sometimes at community colleges or their work site with community college instructors. After two to four years of work, job-based training and classes, apprentices get a well-recognized occupational credential that documents their new expertise.
Research suggests that apprenticing raises a worker's earnings far more than just taking community college courses does. In Washington State, apprentices' annual earnings rose by nearly $12,000, more than double the gains for former community college students.
Apprenticeship's appeal is especially great in today's cash-poor environment. Government costs — for marketing and oversight — are low, since employers pay most training costs. The skills learned are what the market demands, bolstering the worker's career prospects. Unlike full-time students, apprentices get wages that increase with skills. And many apprentices earn credit toward a college degree, which still matters in many jobs that workers-in-training hope to land.
Given their low costs and high long-term payoffs, what's the best way to beef up apprenticeship programs? First, increase the pittance — $21 million nationwide — allocated to the Labor Department's Office of Apprenticeship so its staff can help employers set up new programs. Doubling the budget means thousands of new apprenticeship positions. Besides earnings gains, an upward bump of that size would fuel increases in payroll and income tax revenue that far exceed the added program costs.
South Carolina's success in expanding registered apprenticeship drives the story home. Thanks go to the state's business community, modest state funding (about $1 million a year) and annual S.C. employer tax credits of $1,000 per apprentice starting in 2007. The Apprenticeship Carolina Division of the S.C. Technical College System has registered an average of one new employer-sponsored apprenticeship program per week and more than doubled the number of apprentices. Career opportunities have been created in advanced manufacturing, health care, information technology and other hot sectors.
As another stimulus to apprenticeship, the federal government could reimburse employers for the classroom training. After all, federal subsidies to students taking community college classes that may or may not lead to jobs top $4.5 billion.
In an economy shedding jobs, it's penny- and pound-wise to subsidize apprenticeships to create jobs and help more workers build high-quality careers. A cost-effective subsidy might be, say, $3,000-5,000 for each apprentice hired beyond 80 percent of last year's level.
Higher learning deserves its high place in the nation's workforce-development strategy. But for the growing numbers who would be best served by learning and earning at the same time, policymakers and business leaders must form partnerships that deliver on apprenticeship's promise — job creation and more rewarding careers for more American workers.
Dr. Lerman is an institute fellow at the Urban Institute in Washington and an economics professor at American University. He is a speaker at the summer meeting of the National Association of State Workforce Board Chairs, being held this week in Charleston.
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