How the US can make apprenticeship work

With the US unemployment rate near a five-decade low and job vacancies close to a record high, businesses say they are scrambling to find workers. Many complain that large and growing skills mismatches prevent them from getting the staff they need. While the Biden administration has pushed for large government spending increases to support college students and former college students, apprenticeship is a far lower-cost, quicker pathway to high skills and good jobs. This summer, the Labor Department announced the latest recipients of a $121 million grant to expand such programs. But more can be done — and fortunately, there are practical solutions.
Apprenticeships combine standard classroom learning with paid, on-the-job experience. They’re often seen as a win-win: Employers ensure that their workforce has the skills to succeed on the job and benefit from apprentices’ productivity; apprentices earn wages and an opportunity to directly apply those skills, which can be far more engaging than sitting in class.
Policy makers appear to agree that increasing the number of apprenticeships can build a healthier and more resilient US economy. What will it take to make that happen?
First, because getting employers on board is such a sustained and intensive effort, the Biden administration and Congress should offer more incentives for middlemen to help. Projects such as the American Apprenticeship Initiative show that nonprofits, industry associations, staffing companies and other private firms can make it easier for employers to ramp up, at a cost of about $4,000 per apprentice. South Carolina’s Apprenticeship Carolina hired and trained consultants who helped handle some of the paperwork. Along with state tax credits for employers, this led to a jump from about 90 programs in 2008 to over 613 in 2013 and 1,199 today. The gains were sharpest in health care, IT and manufacturing.
Second, the process for formally recognizing apprenticeships, which can take several months, must be improved. Some states limit registration by not approving programs that might compete with existing ones. New York’s agency is so restrictive that it has fewer apprenticeships than Indiana, despite a workforce three times the size.
Another barrier to expansion is the ratio requirements set by state agencies and the federal Office of Apprenticeship. Mandating one or more skilled workers per apprentice can be a deterrent to employers. The Biden administration should ease or eliminate ratio requirements and speed program approvals for businesses that agree to follow certain national standards. Congress also should fund a public-private body to develop and oversee compliance with such guidelines, and ultimately the performance of apprentices, expanding on the work begun by the Urban Institute in recent years. Finally, the federal government should increase funding for “off-job” learning.
—Bloomberg