Today marks the end of National Apprenticeship Week (NAW). Acknowledged nationally, NAW is a time when apprenticeship partners and providers showcase the success and value of these programs. And it’s no wonder we celebrate these opportunities, apprenticeships are instrumental in building pipelines to good jobs for individuals while also ensuring employers have the talent, they need to remain competitive.
While NAW started nine years ago, apprenticeship has been around for much, much longer. These earn-and-learn models are engrained in America’s history — three of our Founding Fathers started their careers as apprentices. George Washington, for example, apprenticed as a land surveyor. Yet even with this 250-year runway, apprenticeships have not taken off in the United States as they have in other advanced nations.
Today, our country has almost 600,000 registered apprenticeships, mostly in traditional sectors such as building trades and heavy industry. As a share of their labor force, Great Britain, Australia, and Germany have roughly 10 times more opportunities. It is puzzling that the U.S. hasn’t followed its peers in scaling up apprenticeship, a training model that is also a job, allowing people to work and earn while they are learning the critical skills necessary for good jobs and careers. It’s an especially relevant model now, when most U.S. jobs require at least some postsecondary education and training, and when employers, even in our tight labor market, report a serious shortage of skilled workers in their fields.
While many progressives believe a four-year degree is the solution, the reality is that 62% of American adults don’t have one. Additionally, the college earnings premium appears to be declining for the first time in decades, because of soaring college tuition costs, low completion rates, and heavy debt burdens — further pushing the American public to rethink the value proposition of traditional higher education. This change in public opinion was reinforced by a recent PPI poll, which surveyed ~5,000 workers without four-year degrees. 74% believed that public investment in apprenticeship and career pathways to help individuals acquire better skills is the most likely way to help workers get ahead in today’s economy.
Not only is it clear America needs alternatives that are affordable, trusted by employers, and help people learn the technical and digital skills that today’s jobs require but apprenticeships also have strong economic impacts. Individuals who complete an apprenticeship program earn an average annual salary of $77,000, compared to an average national salary of $55,000. Those who complete an apprenticeship program also earn an average of $300,000 more than those who don’t over the course of their career.
On the employer side, apprenticeships help businesses boost recruitment; increase the diversity of their workforce; improve retention (94% of apprentices stay with their company after the apprenticeship wrap); preserve institutional knowledge; and leverage skilled, experienced workers close to retirement to serve as mentors and instructors. For roughly every dollar spent on apprenticeship, employers get an average of $1.47 back in increased productivity, reduced waste of time and cost, and greater front-line innovation.
To ensure more American workers and businesses benefit from these opportunities and keep pace with other partner nations, our country must dramatically scale up apprenticeship. To do this, it will require not only a major boost in public investment, but also a new policy architecture in which public, nonprofit, and private intermediaries play a catalytic role in training and placing apprenticeships in companies.
This week as we recognize the promise of these opportunities, PPI is re-elevating our recent report “Strengthening America’s Workforce: The Path to 4 Million Apprenticeships” which offers a fresh take on Apprenticeships for America’s pay-per-apprenticeship proposal. This proposal would create one million apprenticeships a year through: increased federal investment, funding tied to performance, a shift from lottery-style grants to formula funding, and for resources to be drawn down by all types of intermediaries, from nonprofits like CareerWise, to for-profit apprenticeship service providers like Multiverse, to sell employers on apprenticeship and help them organize programs.
If the federal government were to adopt this proposal, a $4 billion investment would create 1 million new apprenticeships a year. And while $4 billion sounds expensive, compare it to what the government spends annually on higher education. In Ryan Craig’s recent book “Apprenticeship Nation: How the Earn and Learn Alternative to Higher Education Will Create a Stronger and Fairer America.” He finds that federal, state, and local governments continue to pour over $400 billion each year into college while total spending on apprenticeship is under $400 million – that’s a ratio of 1,000:1. And that spending is done willingly without the same job guarantee
As the U.S. wraps up National Apprenticeship Week, PPI wants to remind today’s policymakers to take a page from our history books and, like our Founding Fathers, commit to apprenticeship. But rather than go back in time, PPI encourages U.S. policymakers to adopt this novel approach, so we achieve a roughly 10-fold increase in American apprentices. With such an effort, the U.S. will follow other countries and remain competitive through gains in workforce quality and improved productivity while simultaneously increasing earnings, widening access to rewarding careers, and expanding the middle class for workers. Now that is something worth celebrating.