WASHINGTON — As skepticism grows over the value of traditional four-year degrees, a new report from the Progressive Policy Institute (PPI) highlights an innovative, upwardly mobile alternative: apprenticeship degrees that blend paid, work-based learning with college credit, helping Americans advance their careers without taking on crushing debt.
The report is an output of PPI’s Campaign for Working America, launched last year in partnership with former U.S. Representative Tim Ryan (D-Ohio). The Campaign aims to develop and test new themes, ideas, and policy proposals that help Democrats and other center-left leaders make a compelling economic offer to working Americans, bridge divides on cultural issues like immigration and education, and rally public support for the defense of democracy and freedom globally.
“Apprenticeship degrees represent the kind of common-sense innovation we need to rebuild the American Dream for working families,” said Ryan. “They combine real-world work experience with a college degree, making higher education more affordable and more relevant. If we want to compete with China and restore economic dignity in the American Heartland, this is the kind of policy we ought to be championing.”
“Millions of young people and workers are being forced to choose between a job they need now and a degree that may — or may not — pay off later,” said Ross, PPI’s Director of Workforce Development Policy. “Apprenticeship degrees eliminate that false choice by integrating work and education into a single, debt-free path to upward mobility.”
The report reveals growing skepticism about the value of traditional college degrees and presents apprenticeship degrees as a promising, debt-free pathway to economic mobility. Key takeaways from the report include:
Rising Doubts About College Value: 56% of Americans believe a four-year degree is not worth the cost — especially among younger graduates.
A New Pathway: Apprenticeship degrees offer students the opportunity to earn wages, gain experience, and receive academic credit — all while avoiding student debt.
Economic Mobility: Over 70 million Americans are “Skilled Through Alternative Routes” (STARs) but lack credentials to access higher-wage jobs.
Policy Support: The report outlines a blended funding model and urges Congress to include apprenticeship degrees in new workforce and higher education legislation.
Institutional Innovation: Reach University and Western Governors University are among the institutions pioneering this model, particularly in education and health care.
“Apprenticeship degrees are a bipartisan, practical solution to the intertwined problems of upward mobility, college affordability, and labor market readiness,” said Manno, Senior Advisor at PPI, who leads the What Works Lab. “With smart public investment and stronger employer partnerships, apprenticeship degrees can become a mainstream option across the country.”
Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @PPI.
Preparing for a career and entering the workforce are more challenging tasks than ever for young people. They must navigate four job-launch pain points that involve career exposure, career aspirations, career skills, and career experience. These pain points are the result of a fundamental disconnect young people experience between the career preparation K-12 schools offer them and the career preparation they want from K-12 schools.
K-12 school systems can fix this problem by putting in place a systematic approach to career education and career development for students. As National Career Development Month comes to a close, let’s examine these job-launch pain points and suggest a solution.
With inflation easing, the wages of working-class Americans are finally moving into the plus column. Average hourly pay for production and nonsupervisory workers — who make up four-fifths of employees — hit $30.27 in August, according to the latest report from the Bureau of Labor Statistics.
According to my organization’s analysis, working-class Americans’ wages, adjusted for inflation, have just edged higher than they were on Election Day, 2020. The average working-class American can now answer “Yes” to the question, “Are you better off now than you were under Donald Trump?”
That’s obviously important for political symbolism. But the milestone for real wages also explains a lot about why Americans have felt so badly oppressed by inflation up to now. The price of food and housing matters, but they matter more if price increases exceed wage gains.
In a modern economy, monitoring and supervising worker safety is a key function of government. From this perspective, it is completely appropriate for government regulators to pay special attention to Amazon’s worker safety record, given that the company has been the biggest creator of new jobs in recent years. It even makes sense that Senator Bernie Sanders should issue a report about Amazon’s worker safety record.
But speaking as an economist, the just-released Sanders report is weird and unhelpful. In particular, the report focuses on 2019, the equivalent of ancient history at this point. Not only did the pandemic dramatically transform e-commerce and fulfillment centers, but in the years since 2019, Amazon greatly improved its objectively measured safety performance. According to data officially reported to the government, Amazon reduced its U.S. “lost time incident rate” (which only includes more significant injuries that require an employee to miss at least one day of work) by 75% since 2019. Other safety indicators have improved as well.
The truth is thatAmazon is a safety success story. The ability to create hundreds of thousands of jobs while raising wages and improving worker safety at the same time is an example that should be emulated, not attacked.
Lost in the deluge of campaign coverage these days is any meaningful coverage of one of the Biden administration’s signal achievements.
Less than a year ago, the president made history by walking a United Auto Workers (UAW) picket line demanding that General Motors give the nation’s blue-collar workers a raise. The union’s president, Shawn Fain,declared at the time, “We know the president will do right by the working class.”
When the UAW prevailed, anyone paying attention could see the outlines of the old progressive coalition emerging through a political fog — the Democratic Party, organized labor and working-class voters all rowing in the same direction.
It’s time to revisit one of our favorite topics, the evolution of wages in ecommerce. It is often claimed, falsely, that the entry of Amazon and other large ecommerce firms into local labor markets lowers wages. For example a recent op-ed in the Chicago Sun Times argued that “Amazon’s dominance drives down local wages for warehouse workers, general retail workers and delivery drivers.”
But basic economics tells us that the only way that can be true if ecommerce reduces labor demand. But in fact, the shift to ecommerce has been a massive boost to job growth, both nationally and in most states and large metro areas. The reason? When you order something online, you are creating work for fulfillment center workers and delivery drivers. In other words, the many hours you formerly spent driving to the mall, parking, walking through the mall, standing online to pay, and driving home have now been shifted to the paid labor market.
On a national level, the number of jobs in the retail sector is actually slightly up since February 2020, when the pandemic started, while jobs in delivery and fulfillment have risen by more than 800,000. These new jobs are concentrated in the category entitled “production and nonsupervisory workers,” which tend to be less-educated workers. (These figures are based on PPI tabulations of data from the Bureau of Labor Statistics).
The same is true if we take a longer-term perspective. Over the past ten years, the number of jobs in warehousing (fulfillment) and local delivery has gone up by 1.7 million, while the number of jobs in retail has risen by about 400,000. Once again, these new jobs are concentrated in the category entitled “production and nonsupervisory workers.”
This gain in labor demand has pushed up real wages in ecommerce industries. Over the past ten years, the real hourly wages for production and nonsupervisory workers in warehousing (fulfillment) has risen by 15.4%. That’s compared to a 9.8% increase for private sector production and nonsupervisory workers overall.
To put it another way, the 10-year real wage gain for production and nonsupervisory workers in the warehousing industry—where most Amazon and third party fulfillment centers are counted–is significantly higher than the real wage gain for similar workers in the private sector overall.
Real Wages Rise in Ecommerce Industries
10-year change in real hourly wages for production and nonsupervisory workers*
Private Sector
9.8%
Retail (including physical stores)
11.6%
Delivery (couriers and messengers)
14.7%
Fulfillment (warehousing)
15.4%
*BLS CES data downloaded November 20, 2023
What about in the Chicago area in particular, which was the subject of the op-ed mentioned above? Over the past ten years, the number of retail jobs in Cook County has dropped by about 10,000. But the number of jobs in local delivery and warehousing has increased by 21,000, for a net gain.
The positive trend in labor demand is even stronger for the Chicago metro area. Over the past ten years, the number of retail jobs in the Chicago metro area has dropped by about 14,000. But the number of jobs in local delivery and warehousing has increased by 63,000.
Not surprisingly, with that much demand, employers are having to offer higher wages, not lower wages. Amazon is offering a starting wage of $19.50 per hour at its West Humboldt Park fulfillment center in Chicago By comparison, BLS data for the Chicago metro area shows that the average wage for retail salespersons in the Chicago metro area was only $17.49 an hour, way below the starting wage at the new Amazon facility. Similarly, the average wage for “stockers and order fillers” in the Chicago metro area was only $17.80 per hour.
Finally, no discussion of wages would be complete without considering the very important aspect of safety. Amazon’s own analysis shows that in 2021, the “recordable incident rate” at Amazon warehouses in the United States was 7.6, higher than the 6.7 rate for large establishments in the general warehousing industry as a whole, as reported by the BLS (this figure measures the number of injuries and illnesses incurred at work relative to hours worked).
But newly-released data from the BLS show that the safety gap has disappeared almost completely. Amazon’s warehouse incident rate dropped to 6.9 in 2022, according to the company’s calculations, while the incident rate for large establishments in the general warehousing industry ticked up a bit to 6.8 in 2022. While no single number can fully describe the safety picture, the trend is encouraging. Combined with the strong job and wage performance of ecommerce facilities nationally and in the Chicago area, that’s good news for local workers.
The aftermath of the COVID-19 pandemic and the combination of advancing technology have brought about a major shift in the workplace. Between February 2020 and August 2023, the number of employed Americans with disabilities soared by 33% or 1.9 million. By comparison, the number of employed Americans without disabilities rose by only 1%, or 1.5 million. In other words, workers with disabilities account for 57% of the increase in employment since the beginning of the pandemic.
Today, the Progressive Policy Institute (PPI) released a new report “Disability and Changes in the Workplace,” analyzing available data and discussing how the changing environments from the pandemic allowed workers with disabilities to find job opportunities that are a good match for their needs.
Report author Dr. Michael Mandel, Vice President and Chief Economist of PPI, describes how the rapid adaptation of businesses to “work from home” during the pandemic allowed workers with disabilities to operate from a more congenial or accommodating environment. At the same time, advancing technology has also lowered the barriers for Americans to access forms of independent, flexible work, like gig-economy delivery and ride-sharing platforms, that can be better suited to workers with unpredictable challenges such as those related to fatigue, chronic pain, or mental health issues.
“The United States is experiencing a major change in the workplace — leading to increased opportunities and careers for Americans with disabilities,” said Dr. Michael Mandel. “Policymakers and employers alike have an important role to play to ensure that work can remain flexible and accessible for all Americans, and continue to find novel ways to approach working.”
Read and download the full report here and read more about how remote work has fueled the surge in jobs for workers with disabilities in The Messenger.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.
The aftermath of the acute phase of the pandemic has brought two important disability-related trends to the workplace. First, cognitive difficulties, debilitating fatigue, and other challenging conditions have become increasingly prevalent as long-term consequences of infection with COVID-19. Partly as a result, the number of adults reporting disabilities has surged in recent years. From February 2020 to August 2023, the number of adults with disabilities rose 3.1 million, or 10% (Table 1 and Figure 1). By comparison, the number of adults with no disability rose by only 2% over the same stretch.
This upward spike breaks a long-term trend. From 2009 to 2019, the number of adults with disabilities grew at only 1% per year, roughly the same pace as the number of people without disabilities. These figures are based on the monthly Current Population Survey (the same survey used to track the unemployment rate) which tracks disability by asking respondents whether they have one of six conditions, including “serious difficulty concentrating, remembering, or making decisions.”
The second and more empowering trend: The combination of advancing technology and pandemic-related pressures have made it easier for Americans with disabilities to find working situations that are a good match to their needs. The rapid adaptation of businesses to “work from home” during the pandemic allowed workers with disabilities to operate from a more congenial or accommodating environment, including being able to take breaks when necessary and not have to struggle with commuting and mobility issues. At the same time, advancing technology has also lowered the barriers for Americans to access forms of independent, flexible work, like gig-economy delivery and ride-sharing platforms, that can be better suited to workers with unpredictable challenges such as those related to fatigue, chronic pain, or mental health issues.
These two trends together have produced a startling shift in the workforce: Between the beginning of the pandemic in February 2020 and the latest data in August 2023, the number of employed Americans with disabilities soared by 33% or 1.9 million (Table 1 and Figure 2). By comparison, the number of employed Americans without disabilities rose by only 1%, or 1.5 million (these figures include self-employed). In other words, workers with disabilities account for 57% of the increase in employment since the beginning of the pandemic. That’s compared to less than 5% of overall employment.
These results highlight the central role of Americans with disabilities in the post-pandemic workforce. Debates over key workplace issues, such as the pressure to shift from “working from home” back to “working at the office,” and attempts to regulate flexible platform work, must be seen through the lens of how they affect Americans with disabilities. As employers and policymakers debate the shape of the post-pandemic workplace, they should preserve the changes to the workplace that made it more hospitable to people with disabilities.
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.
Amidst our tight labor market, our nation is facing pressing workforce challenges that demand urgent attention. Employers of every size and industry can’t find enough workers to fill open jobs — the latest data shows that we have 9.8 million job openings in the U.S. but only 5.9 million unemployed workers; eligible workers remain on the sidelines in need of skills training or support services to enter and advance in the labor market and the adoption of technological innovations continue to disrupt the way we work — creating an increasingly large skills-gap that is undermining our nation’s competitive edge and worker access to economic opportunity. To ensure our nation’s workers and businesses can succeed in today and tomorrow’s economy, policymakers must confront these trials head-on.
And some are. Last week PPI’s New Skills for a New Economy Project, had the privilege of partnering with members of Congress on the New Democrat Coalition (NDC) to convene a roundtable on workforce development.
The roundtable brought together Members of Congress, including Representatives Kathy Manning (NC-06), Salud Carbajal (CA-24), Hillary Scholten (MI-3), Gabe Vasquez (NM-02), Val Hoyle (OR-04), Lucy McBath (GA-06), and Donald Norcross (NJ-01). The event also included expert speakers from across the workforce ecosystem — representing the workforce system, community colleges, industry partners and intermediaries working to expand youth and adult apprenticeships. Roundtable speakers included: Portia Wu, Maryland Secretary of Labor; Steven Partridge, Vice President of Strategy, Workforce, and Innovation at Northern Virginia Community College (NOVA); Patrick Combs, Vice President for Apprenticeships and Work-Based Learning at Job For the Future; Lateefah Durant, Vice President of Innovation at CareerWiseDC and Steve Perrotta, Director of Public Policy at Society for Human Resource Management.
The group had a holistic conversation about these pressing workforce challenges and ways in which the public and private sectors can work together to create innovative and effective solutions. Leaders discussed high-quality skill development opportunities; tackling barriers to employment; incentivizing cross-sector collaboration and the critical importance of robust industry partnerships. From this discussion, three themes emerged:
Build Stronger Career Pathways for Youth & Adults: To address emerging skill gaps and ensure current and future workers are prepared for in-demand employment, Members and experts discussed the need to expand high-quality skill development programs across the U.S. Leaders emphasized the growing degree divide in our country — stating that while degree programs yield strong returns in our labor market, the majority of workers don’t earn degrees. As a result, in addition to ensuring higher education is more accessible, policymakers must commit to creating more high-quality alternatives to college that yield strong returns. The group talked about apprenticeship as a solution and how these effective earn-and-learn models should be expanded to serve more businesses and more people. Lateefah Durant, from CityWorks DC, discussed her work in implementing the CareerWise, youth apprenticeship model which has seen success across the country and has helped to expand opportunity for young people in D.C. through not only the necessary on-the-job training and related instruction but through social capital and network building. Lastly, the group discussed other more rapid reskilling efforts, like short-term credential programs. Steve Partridge, spoke to Virginia’s FastForward program and how state investment in these types of programs has allowed NOVA to help more students get in-demand credentials and jobs across the state.
Move Toward a Skills-Based Labor Market: For decades, employers have used the degree as a proxy for job preparedness. To break down this barrier to employment, leaders discussed the need to move toward a more skills-based labor market — where someone is assessed by their skill sets and experience rather than their attained credentials. Portia Wu, Maryland’s Secretary of Labor spoke to Maryland’s efforts to remove degree requirements from government jobs as a way to attract diverse talent, expand access to good government jobs and model how this can and should work for other employers. Portia discussed how these efforts along with removing some of the requirements for federal contract work can create more opportunity for workers without degrees, returning citizens and other workers that face increased barriers to employment. Steve Perrotta from SHRM, reaffirmed Portia’s points stating that this is a huge priority for employers across the country. However, as with any new effort, leaders discussed that this will take time to get right. Not only do employers have to change practices and learn how to better market jobs and assess skills but moving toward skills-based hiring will require overhauling our nation’s workforce development system. This means a greater emphasis on industry-responsive education, training, and experience, like career and technical education and work-based learning, across K-12 and postsecondary education. Policies that promote competency-based education, offer prior-learning assessments, and expand career pathways will also be increasingly important so individuals can have more stackable, skills-based learning opportunities while also understanding changing labor market demands. Additionally, innovation around learning and employment records, which provide digital infrastructure to hold information about a person’s academic and industry achievements will be important to design and scale so individuals have a more accessible way to demonstrate their accumulation of skills, knowledge and experiences.
Increase investment in workforce development efforts: Last but definitely not least, to do any of this effectively there needs to be greater investment in workforce development at the national level. Prior to COVID and recovery spending, the nation spent $149 billion on higher education versus $58 billion for workforce-related education and training. Since the latter figure also includes Pell Grants and veterans’ programs, Washington really only spends about $16 billion, spread across 17 separate federal programs that provide workforce-focused education, employment, and training assistance. Experts at the roundtable discussed how this is not sufficient. In addition, to the general disagreement with our nation’s inequitable funding for workforce, speakers elevated what needs to be invested in. Portia, discussed the importance of sector based investment — highlighting The Department of Commerce’s Good Jobs Challenge — as a way to build career pathways in high-demand fields while supporting the economic development of a region. Steve Patridge spoke to the importance of career guidance and ensuring community college students have access to career counselors as well as better labor market insights to make informed career decisions. And lastly, Patrick and Lateefah spoke to the growth and scale of apprenticeships in our country, for adults and youth alike.
Across these major themes, it was made clear that not one system can do this work alone. Instead we must break down silos between public programs and agencies as well as with the private sector to create more collaborative and aligned solutions that serve the needs of employers and workers.
The roundtable facilitated an illuminating conversation — shedding a light on potential federal actions that can solve persisting workforce shortages; our nation’s stagnant labor force participation rate and make it easier for employers and workers to keep pace with our rapidly changing economy. PPI’s New Skills Project looks forward to continued work with these Congressional champions and workforce experts to enact the policy changes needed to create more equitable economic opportunity in America.
The United States’ Unemployment Insurance (UI) system is a lifeline for jobless Americans, and provides an income-smoothing effect for workers and their families, as well as sustains and stabilizes consumer spending during economic downturns. However, UI also has the potential to spur entrepreneurship through the Self-Employment Assistance (SEA) program. SEA is a program within our system that offers workers the opportunity to build a new business while accessing income support during times of job-loss.
Report author Taylor Maag, PPI’s Director of Workforce Policy and the New Skills for a New Economy Project, recommends updating SEA to cut some of the “red tape” requirements that make it difficult for individuals to access and states to administer. She also suggests creating a new pilot program that can help policymakers understand the true impact of entrepreneurial opportunities for Americans who may not have as much access to means and capital.
“Our nation’s Unemployment Insurance system offers critical support during times of job loss, however it falls short in fostering opportunities for entrepreneurship, which plays a vital role in our country’s economy,” said Taylor Maag. “By enabling dislocated workers to pursue entrepreneurship, we can provide increased economic opportunity for individuals, communities, and the nation at large. Policymakers should not overlook UI’s untapped potential to create more of these economic opportunities.”
Read and download the report here.
The report makes the following policy recommendations:
Strike down arbitrary eligibility requirements for SEA, which make it harder for individuals to access this program.
Remove requirements that make SEA too costly for states to administer and disincentive states from participating in the program.
Create a pilot program to empower UI to support more entrepreneurship.The pilot would be a competitive grant program incentivizing states without active SEA programs to participate.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels, Berlin and the United Kingdom. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
At present, the United States is enjoying a stunningly low rate of unemployment. The federal government’s most recent report puts that rate at 3.6% and notes that job openings continue to rise.That’s a dramatic rebound from the dark days of Spring 2020, when unemployment skyrocketed to 13%.
To cope with the flood of laid off workers during the COVID-19 crisis, America relied heavily on our nation’s Unemployment Insurance (UI) system. Its mission is twofold: First, to provide an income-smoothing effect for workers and their families during times of joblessness; and second, to sustain and stabilize consumer spending during economic downturns. The UI system enables unemployed workers to keep paying bills and caring for their families, which, in turn, keeps other workers employed and regional economies vital.
In short, the UI system is a lifeline for jobless Americans in bad economic times that also has the “countercyclical” effect of shortening recessions. However, the system nearly crashed in many states during the pandemic, and experts believe it’s not prepared should the economy start contracting and shedding jobs. U.S. policymakers need to act now, while the system is not under stress, to make it more resilient against future emergencies.
As they do that, policymakers should not overlook UI’s untapped potential to create more opportunities for entrepreneurship. Currently, a small program within America’s UI system seeks to address this need — the Self-Employment Assistance Program (SEA). SEA offers qualifying individuals the opportunity for self-employment by combining income support during periods of unemployment with activities related to starting a business. Only 5 states have active programs and as a result, the SEA program serves a very small, distinctive slice of UI recipients, with less than 1% of UI claimants participating in the program. In fact, in 2022, there were only 1,404 SEA participants nationwide. This is a stark comparison to the number of entrepreneurs across America’s workforce — with some research now showing there are 31 million entrepreneurs in the U.S. making up 16% of the adult workforce.
While UI undeniably offers support during job loss, it falls short in fostering opportunities for entrepreneurship. This policy brief aims to illuminate the importance of creating more opportunities for entrepreneurship in the U.S., the transformative role UI can and should play in creating these pathways to self-employment and outlines actionable policy recommendations for federal leaders to consider. By enabling dislocated workers to pursue entrepreneurship even amidst financial distress, we can provide increased economic opportunity for individuals, communities, and the nation at large.
Just decades ago, the internet was an entirely new concept, but it’s become second nature for billions of people and is now embedded into daily life across the world. While the internet is old news, there are recent technologies like blockchain, artificial intelligence (AI), and the cloud that have gone from niche, specialized roles in the global economy to the mainstream. This rapid and widespread digitalization has changed the nature of work, and as a result, digital skills are now regarded as essential for the modern workforce — across Europe and the U.S., job requirements for digital skills have gone up by 50%.
While this transformation has been underway for decades, the pandemic accelerated it. Not only did the crisis change how businesses operate and the way we work, but it also influenced people’s reliance on technology. Individuals and businesses were suddenly dependent on the internet, their smartphones, and their mobile applications for critical daily activities like work, shopping, and communication with loved ones. A 2022 report from PPI found that the App Economy became an increasingly indispensable part of the U.S. economy during the pandemic. Existing mobile applications were able to respond to soaring demand without significant outages and app developers were also able to quickly create new apps to meet the human and economic needs.
Additionally, this year’s World Economic Forum Jobs report — which lifted up perspectives from 803 companies that collectively employ more than 11.3 million workers across 27 industry clusters and 45 economies across the world — found that technology adoption will remain a key driver of business transformation for the next five years, with over 85% of organizations identifying that increased adoption of new and frontier technologies and broadening digital access will be priorities for their organization. Eighty-six percent of companies surveyed also stated that digital platforms and apps are the technologies most likely be incorporated into their operations in the next five years.
It’s clear the reliance on technology from individuals and business is not going away anytime soon and will continue to grow as emerging technologies and solutions are developed and adopted. To keep pace with this demand — while also ensuring business has the skilled talent to remain competitive — digital and tech-related skills will be increasingly necessary for workers to succeed in the global labor market.
While demand for digital skills is growing, unfortunately supply is lower than it needs to be. Workforce shortages persist across the tech industry with employers struggling to find skilled talent that is prepared for digital roles. And this gap continues to widen. A 2021 Rand Corporation report found that the global digital skills gap was widening due to the following factors: tech talent outpacing an already short supply (in fact, 54% of American workers believe technology will advance faster than workforce skills); high costs and disorganized approaches to traditional education that increase barriers to learning; access to digital infrastructure and skills limited by socio-economic status (76% of global workers don’t feel they have the resources needed to learn digital skills).
These findings highlight the barriers confronting workers who want to acquire digital skills. The report also estimates that because of digital skills gaps, 14 of the G20 countries could miss out on $11.5 trillion in cumulative GDP growth. Policymakers around the world need to tackle this problem, both to ensure their industries and businesses can keep pace with the rate and scale of technological innovation, but also to ensure current and future workers will have more opportunities to develop the skills needed to succeed in changing labor markets.
Apprenticeships have long been ingrained in America’s history, but today, America falls drastically behind other advanced nations despite the benefits the program brings to workers and employers alike. Apprenticeships — a training model that allows people to work and earn while they are learning the critical skills needed for the industry — are especially important today when most U.S. jobs require at least some postsecondary education and training, and there is a serious shortage of skilled workers in many fields.
Today, the Progressive Policy Institute (PPI) released a new policy brief titled, “Strengthening America’s Workforce: The Path to 4 Million Apprenticeships,” detailing how the United States needs to scale up apprenticeships to ensure more workers and businesses benefit from these opportunities. Report author Taylor Maag, PPI’s Director of The New Skills for a New Economy Project, recommends mobilizing intermediaries and boosting federal investment to create one million new apprenticeships per year — a roughly 10-fold increase — and requiring funding ties to performance.
“U.S. employers should follow other countries’ lead to create a significant number of apprenticeships to remain competitive in recruitment, workforce quality, and productivity. Apprenticeships are worthwhile for both workers and employers — increasing earnings, widening access to rewarding careers, increasing job satisfaction, ensuring a skilled workforce, and expanding the middle class,” said Taylor Maag. “Growing apprenticeship opportunities is the kind of tangible policies American workers deserve and should expect from their government.”
By the numbers:
There are currently 593,000 apprentices in the U.S. — only .03% of our labor force — compared to countries like the United Kingdom, Australia, and Germany that have roughly 10 times more.
Workers who participate in apprenticeships earn an average salary of $77,000, compared to an average salary of $55,000 for workers who do not. Those who complete an apprenticeship also earn an average of $300,000 more than those who don’t over the course of their career.
For every dollar spent on apprenticeship programs, employers get $1.47 back in increased productivity.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on twitter.
Apprenticeship is 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.
In 2021, our country had 593,000 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 have seized on the panacea of “college for all,” the reality is that 62% of American adults have no bachelor’s degree, and that number rises to 72% for Black adults and 79% for Hispanic adults. Additionally, The college earnings premium appears to be declining for the first time in decades, with 40% of recent college graduates working in jobs that do not require a bachelor’s degree. Soaring college tuition costs, low completion rates, and heavy debt burdens are further pushing the American public to rethink the value proposition of a four-year degree.
Recent data proves this changing mindset. A fall 2021 survey of 1,000 high school students found that the likelihood of attending a four-year college dropped by nearly 20% in less than a year. In the spring of 2022, there were 662,000 fewer students enrolled in undergraduate programs than the previous spring, constituting a drop of 4.7%. And a report from the fall of 2022 elevated survey responses from more than 1,500 Gen Z youth and 600 employers, finding that 81% of employers think they should look at skills rather than degrees when hiring and 72% of employers stating they don’t see a degree as a reliable indicator of job preparedness.
It’s clear that America needs alternatives to a four-year degree that are affordable, trusted by employers, and help people learn the technical and digital skills that today’s jobs require. Our nation’s oldest pathway — apprenticeship — is a viable solution.
While apprenticeship pre-dated our nation, it wasn’t until 1937 that the U.S. passed the National Apprenticeship Act (NAA). This law established the Registered Apprenticeship Program (RAP) as it exists today. To meet the requirements of a registered apprenticeship, the U.S. Department of Labor (DOL), or a federally recognized state apprenticeship agency vets apprenticeships for quality and rigor. The work training curriculum must align with industry standards and enable apprentices to earn a portable, nationally recognized credential. Depending on the industry, Registered Apprenticeship can last from one to six years and typically includes 2,000 hours of on-the-job training and 144 hours of technical instruction. While originally developed for the skilled trades, these opportunities have been expanded into new and in-demand industries like health care, technology, and advanced manufacturing.
Even though the legislation is nearly a century old, registered apprenticeships continue to have an impact on economic security. Individuals who complete an apprenticeship 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.
In addition to helping workers find good jobs and careers, these programs offer an array of benefits to employers. 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.
Apprenticeship is a model employers can trust, helping to ensure talent is prepared for in-demand opportunities while also providing a quality postsecondary path for young Americans who are questioning the traditional four-year degree. It also is highly attractive to adult learners, who are older and have increased barriers to accessing and completing skill development opportunities due to child care or the need to keep working. Apprenticeships are the original work-education model, allowing adult learners to learn the skills they need without sacrificing a wage and providing education that is applied — ensuring learning connects immediately to the workforce.
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 and create roughly 10 times more, reaching the end goal of 4 million apprentices in this country. To get to this number, it is not only a matter of boosting public investment, but also requires a new policy architecture in which public, nonprofit, and private intermediaries play a catalytic role in training and placing apprenticeships in companies.
It is the end of February in Indianapolis. I arrive at a newly developed building complex that houses Ascend Indiana — a nonprofit intermediary organization that connects Hoosiers to in-demand careers and regional employers to skilled talent, fostering cross-sector partnerships, building capacity, and developing insights that enable system-level change to transform the career trajectory of youth and adults in the community.
As part of their efforts, Ascend partners with EmployIndy, the local workforce board, to offer the Modern Apprenticeship Program (MAP). MAP is a three-year program designed to prepare Central Indiana high school students for the workforce with paid, hands-on experiences that complement their traditional academic coursework. Apprentices start in their junior year and pursue jobs in growing fields such as business, advanced manufacturing, and IT. Afterward, they can continue to college or jump right into their career.
While visiting Ascend, I had the pleasure of meeting three of these youth apprentices. They all are extremely impressive, going to school full-time while also advancing in their apprenticeship program — with positions working in human resources, talent acquisition, and business management. High school students earning college credits, a wage, and critical job skills; this type of opportunity was not available to me and my peers in high school.
In fact, most young people in our country still don’t have access to high-quality career learning experiences like MAP apprentices. This is a result of our nation’s education system over-emphasizing college prep coursework and advising, while career preparation programs are overlooked, under-resourced, and even discouraged by federal and state policy. While we know that college — specifically a bachelor’s degree — often leads to higher long-term earnings, most Americans still do not earn degrees, with many forgoing college altogether, and many — 39 million to be exact — enrolling in college but not completing a degree. They are left with student debt and without a credential of value.
This trend is expected to worsen as young people increasingly question the career and financial benefits of traditional higher education. As a result, students aren’t attending, or are postponing their college plans altogether, which is apparent in the sharp declines in college enrollment among recent high school graduates. Rather than just focusing on college prep in their academic curriculum, students seem to be looking for ways to infuse career relevance into their education.
Career education does exist in schools today, for example, through our nation’s Career and Technical Education (CTE) system. CTE funds most of career learning in K-12 and these programs seek to provide students with academic and technical skills and the guidance needed to make informed career choices. Data shows that CTE concentrators, or students that have completed at least two CTE courses in a pathway, have a 94% high school graduation rate, which is 8% points higher than the national average. Additionally, CTE concentrators are employed full-time at higher rates and earn more than non-concentrators throughout their career. Yet even with promising outcomes, one in four high schools don’t offer CTE at all and out of roughly 15 million public high school students across the country, only 3 million are CTE concentrators.
It is clear the CTE system has its limitations. Funding is a big one. The federal government spends over $57 billion annually on our nation’s secondary schools. This investment does not include the majority of public funds for K-12 which come from the state and local level or the $122 billion in relief from the American Rescue Plan Act. Of all that, the CTE system receives roughly $1.3 billion annually for both youth and adult career education. As a result, only $600 million of total CTE funds goes toward K-12 to support career learning and experiences.
Compared to other public resources for secondary education, that truly is a drop in the bucket. School districts trying to provide career learning opportunities cite insufficient funding as the biggest barrier to offering these options in high school. However, funding constraints are not the only challenge. Inconsistent state support and the stigma that often attaches to career-oriented coursework and its students result in programs of widely varying quality and accessibility. Additionally, logistical hurdles, like recruiting and retaining qualified instructors, inflexible scheduling of programming, and finding willing employers make it especially hard to offer a critical element of CTE: work-based learning.
Work-based learning programs, like MAP in Indianapolis, can include apprenticeships, pre-apprenticeships, internships, and on-the-job training, among other options. These opportunities help young people gain the knowledge, skills, and credentials needed to achieve strong career outcomes. Work-based learning is beneficial for all young people but can be especially useful for individuals from low-income backgrounds and others who may otherwise not have access to career exposure, educational opportunities, professional networks, and social capital that play a critical role in career success.
The popularity of work-based learning has surged in recent years, with new energy and activity from the public and private sectors. States and locals can now leverage federal CTE dollars for these activities while also including work-based learning as a program quality indicator. While roughly half of states selected work-based learning as a quality indicator for their CTE programs, early data from these efforts demonstrated mixed success, with fewer students than expected accessing high-quality opportunities. The pandemic was a factor in these outcomes, especially for young people in rural and underserved communities that lack an extensive employer base or access to the necessary digital tools to access virtual options.
Faced with these obstacles, it is no wonder schools have continued the outdated approach of focusing on college prep coursework and have generally ignored career education in high schools. However, it can’t be ignored any longer. These opportunities are critical for an individual’s success after high school — preparing young people for the world of work and providing strong alternatives for those not interested in or unable to access a four-year degree. It is time for our education system to undergo much-needed reform and finally reinvent high schools.
This brief calls on policymakers to do just that — elevating innovative approaches across the country, like MAP in Indianapolis, that can be replicated and scaled. It also offers policy recommendations, calling on leaders to adopt solutions that: ensure every high school student can participate in high-quality work-based learning, boost public investment, and make these resources more effective and build strong cross-sector partnerships, which are critical for these efforts to succeed. This work is more important now than ever to ensure our nation’s education system creates paths to greater economic opportunity and avoids leaving millions of young people behind, especially those who don’t go to college.
