The blog of the Urban Institute
June 25, 2020

Youth Apprenticeship Can Help Reduce Long-Term Harms from Recession

June 25, 2020

On June 8, the National Bureau of Economic Research announced that the US has officially entered a recession because of “the unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy.” Though some indicators suggest this recession could be short-lived, the harms of this economic downturn will likely exacerbate existing racial and ethnic disparities.

Despite a modest improvement in the national unemployment rate from April, May’s rate stood at a staggering 13.3 percent. Yet, according to the US Bureau of Labor Statistics, the unemployment rate for 16-to-19-year-olds reached an astounding 29.9 percent in May, compared with 12.6 percent a year earlier.

Though white teens experienced an unemployment rate of 28.3 percent in May, the corresponding unemployment rates were 34.9 percent for Black and African American teens and 37.4 percent for Latinx teens. During periods of economic contraction, young workers are often among the first to lose their jobs and can struggle to gain new employment. These systematic setbacks can have long-term effects, known as “scarring,” on the careers of young people, who lose valuable work experience and wage growth.

Among 19-to-33-year-olds who entered the labor market during a recession between 1976 and 2015, poverty rates rose persistently for the first five years afterward, and the effect was most pronounced for Black workers. Although researchers identified widespread harms for young adults entering the labor market during a recession—including longer unemployment spells and earnings losses—the effects were most severe for young people of color and those without a high school diploma or equivalent credential.

These findings bolster the case for providing valuable work experience and work-based learning opportunities to young people, which can help offset the damaging effects of entering the job market full time during a recession.

For decades, researchers and workforce development practitioners have called for expanding youth apprenticeship and scaling its ability to launch students on promising career paths, especially young people of color. Contemporary youth apprenticeship initiatives date back to the 1990s, yet only a few states, namely Georgia and Wisconsin (PDF), have sustained progress toward scaling a youth apprenticeship system.

Youth registered apprenticeship entails five primary components: on-the-job training, related instruction, progressive wages, mentoring, and a nationally recognized credential. Since 2017, Iowa—led by the governor’s office, with support from the US Department of Labor’s Office of Apprenticeship, Iowa Workforce Development, Iowa Economic Development Authority, and individual companies, high schools, and community colleges—has fostered a statewide initiative to expand high school youth apprenticeship programs.

Urban Institute researchers recently completed a case study that describes how these partners have collaborated to support youth apprenticeships; highlights the experiences of specific companies, students, and high schools; and shares recommendations for improvement and replicability.

Iowa’s efforts to raise awareness of Registered Apprenticeship programs in the state are beginning to show promising results. For 16- to-24-year-olds who completed apprenticeships in Iowa, annual earnings averaged $42,000, much higher than average annual earnings for all 22- to-26-year-olds in the US in 2019 ($33,600) and 1.5 times the average earnings ($27,900) of 22- to-26-year-olds with a high school diploma but no bachelor’s degree.

Among youth apprentices in the state, the high school model includes 111 student apprentices from 26 secondary schools who participate in 12 different Registered Apprenticeships. Apprentices and employers participating in high school apprenticeship programs report high levels of satisfaction. Through interviews, the Urban team learned that employer approval seems driven by the opportunity to connect with talent early, and apprentices indicate appreciation of the hands-on learning with professional adults in their field.

To continue offering the model to more students and employers in Iowa, stakeholders need to overcome several challenges, including expanding recruitment to more students of color. At least one employer and one high school administrator mentioned increasing diversity as a major aspiration.

Moreover, Tascha Brown, director of Central Campus in Des Moines, believes youth apprenticeships provide achievable avenues for students from families grappling with generational poverty to end the cycle. Brown and her colleagues target apprenticeship opportunities to ensure a diverse array of students can take advantage of the apprenticeship model.

Regardless of the duration of the current recession, the economic downturn will undoubtedly affect some more than others, particularly young people of color and those who do not complete high school. Youth apprenticeship can provide these students with valuable work experience and earnings to help them weather the unsteady labor market and offers an alternative path to learning and success.

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