The voices of Urban Institute's researchers and staff
May 8, 2018

Instead of tariffs, try apprenticeships

May 8, 2018

The Trump administration is banking on new tariffs to boost the steel and aluminum industries and bring back manufacturing jobs. But those tariffs could lead to job losses in other industries, ultimately costing the US more jobs than they create.

Meanwhile, the manufacturing industry is facing a skills gap estimated to result in 2 million unfilled jobs by 2025. Instead of enacting tariffs, we should train workers to fill these jobs. And to do that, we should invest in apprenticeships.

The tariffs are meant to save jobs, but they won’t

The tariffs are designed to preserve and create jobs in the steel and aluminum industries and prevent dumping—that is, deliberately underpricing products to gain market share—while bolstering domestic American manufacturing.

This is an understandable effort because the United States has lost about 7 million manufacturing jobs since its peak nearly 40 years ago, including 5 million since 2000. But, as my colleague Steve Rose explained, only 10 percent of these jobs lost were because of our trade deficit, which these tariffs attempt to reduce. The remaining 90 percent have been lost because of increased productivity and technological advances. Further, these tariffs might actually cost jobs.

The last time steel tariffs were enacted in 2002, roughly 200,000 jobs were lost. This time would be no different. According to a recent analysis by the Trade Partnership, the proposed tariffs would save 33,000 jobs but would cost the economy 179,000 jobs for a net loss of 146,000 jobs. Even the manufacturing sector, which the tariffs are designed to protect, would lose 2,500 jobs.

This analysis doesn’t take into account the potential for additional tariffs and retaliatory actions by China and other countries, which could lead to further job losses. China might have already cut off purchases of many US products, including soybeans, threatening thousands of jobs. This analysis also doesn’t account for the potentially increased costs to consumers.

To save and create jobs, let’s try apprenticeships

Despite the loss of manufacturing jobs in recent years, the United States faces a lack of skilled workers for existing jobs.

The number of unfilled jobs is at its highest level ever, including for high-skill manufacturing jobs. An estimated 3.5 million manufacturing jobs need to be filled between 2015 and 2025, but the skills gap means that 2 million will likely go unfilled. That’s more than what the tariffs are attempting to save.

To fill these jobs, the United States should focus on apprenticeships to build the skills of tomorrow’s workforce. Apprenticeships allow people to get on-the-job training along with classroom learning to earn credentials and certifications for a fruitful career without the enormous costs of a four-year college. 

But few employers offer apprenticeships in the US and not nearly enough to train enough people for future high-skill manufacturing jobs.

To address this situation, and building on the Obama administration’s initial efforts, President Trump signed an executive order last year that would streamline federal efforts to increase the number of apprenticeships to 5 million over the next five years, which is double the Obama administration’s previous effort. The executive order also called for doubling (to $200 million) the funding for learn-to-earn programs. 

Also, the US Department of Labor is creating industry-recognized, competency-based, occupational frameworks that companies can use to design and develop apprenticeship programs. These frameworks will offer a standardized way for employers, unions, and schools to train apprentices in various industries.

Getting hundreds of thousands of young people and hundreds of companies engaged in apprenticeships is a critical challenge for this country. But investing in apprenticeships can create or preserve more jobs than any tariff could, so it is a challenge worth accepting.

President Donald Trump speaks to a crowd at the Local 18 Richfield Facility of the Operating Engineers Apprentice and Training, a union and apprentice training center specializing in the repair and operation of heavy equipment on March 29, 2018 in Richfield, Ohio. Photo by Jeff Swensen/Getty Images.

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