President Trump made news in March when, alongside German Chancellor Angela Merkel, he announced that he would work to expand apprenticeships in the United States, as part of the two leaders’ central emphasis on “training our workforce for the twenty-first century.” Three months later during Workforce Development Week, Trump toured the Waukesha County Technical College in Wisconsin; discussed apprenticeships with local business owners, teachers and apprentices; and signed an executive order expanding apprenticeships in America.
An emphasis on apprenticeships is a good idea that has crossed the Atlantic. It’s something people of faith should champion because apprenticeships train young people in the skills needed to fill high-paying jobs, not just in manufacturing and construction, but also “white collar” fields like finance, retail, and insurance. Apprentices earn while they learn, meaning they experience the dignity of work and a paycheck from day one. The Wall Street Journal reported that, according to the Labor Department, nine out of 10 Americans who complete apprentice training land a job with an average starting salary of $60,000 – higher than the $50,000 that college graduates will make in 2017.
Apprenticeships have a long history of success in Germany. By age 20, about 60 percent of German young adults have earned some kind of professional credential, the equivalent of an associate’s degree or a trade school certification in the U.S. system. Not only have they done so without paying for college, but they earned income as apprentices during the two-to-three year process.
Yet in the United States today, there are only half-a-million apprentices, compared to 17 million students in bachelor’s degree programs. One of the key differences between the U.S. and German systems is that German students are required to choose a career track while in high school. This kind of “early tracking” is anathema to many U.S. educators, who fear that it will lock lower-income students, who are disproportionately minorities, into lower-paying professions. But with that caveat in mind, perhaps the United States has something to learn from this European policy.
The Skills Gap
The winds of change may be blowing in American education. For one, the U.S. manufacturing sector is on the rebound. Since 2009, the sector has grown faster than the U.S. economy as a whole. Labor costs per unit of output in the United States are now only a bit higher than China and lower than industrialized nations such as Brazil, Canada, and Germany.
Second, while unemployment is at a 10-year nadir of 4.3 percent, some six million jobs remain unfilled – a 30-year high, according to the Bureau of Labor Statistics. For perspective, there were only 2.2 million unfilled positions in 2009, when unemployment hovered between nine and 10 percent. While the 2009-2017 trend promotes higher salaries for wage earners, the lack of additional skilled labor is hurting overall productivity, both for employers and the country as a whole.
Boosting Labor Force Participation
Tragically, while six million jobs remain unfilled, some seven million American men between the ages of 25 and 54 are neither working nor looking for work. Another two million men in this age range are looking for work, but are unable to secure a position because they don’t have the right skills. Apprenticeships have the potential to connect the long-term unemployed with high-paying jobs.
What do we know about these seven million men who are not even looking for work? We know they are disproportionally poor, uneducated (some haven’t graduated high school), and unmarried. Some have lost work due to automation or (less commonly) globalization.
These unemployed men are not doing extra household chores or caring for ailing relatives. They are spending more time watching TV. They are increasingly signing up for government disability programs – sometimes as a form of unemployment, but also because idleness itself has caused young people’s health to deteriorate. In Men Without Work, Nicholas Eberstadt shows that “57 percent of men twenty-five to fifty-four years of age who are out of the labor force reported [receiving] benefits from at least one government disability program in 2013.” Sadly, these men have significantly higher rates of depression, drug use (particularly opioid addiction), and suicide. They have largely given up on the possibility of gainful employment.
Apprenticeships have the potential of giving these underutilized men the skills they need to enter productive society. By raising the workforce participation rate, a greater emphasis on apprenticeships would boost productivity, aid human flourishing, foster innovation, promote greater collaboration between research and better-trained manufacturing personnel, and increase the growth of the U.S. economy.
“College for All” Doesn’t Work
There is another factor that should steer the U.S. toward expanding apprenticeships. About 40 to 45 percent of those who begin a four-year college program will not graduate within six years. About 70 percent of college students rely on federal and private loans. The average debt load among the class of 2016 was about $37,000 — a figure that has risen steadily in the last two decades, even as starting salaries (until recently) have barely budged. Default rates on student loans are higher among college dropouts — even though their debt loads tend to be much lower. A monthly payment of $150 is manageable if you’re earning $50,000 a year, but unbearable if you are living at a subsistence level.
Let’s be clear: Traditional college is not the right path for every high school graduate. And we can do more in high school to expose young men and women to lines of work that can be accessed with apprenticeships, trade schools, and associate’s degrees – particularly in the healthcare sector and STEM-related disciplines.
Making it Happen
All of these factors should leave us encouraged by President Trump’s audacious goal of raising the number of apprentices from 500,000 to five million in the next five years. He has more than doubled the size of the budget for apprenticeship programs, from $90 million to $200 million. And why not? Apprenticeships are at least as worthy of aid as college, for which the federal government provides low-interest loans.
The biggest trick now, it seems, is to get more employers to increase their investment in apprenticeships. In Germany, employers underwrite two-thirds of the total training costs (roughly $6.3 billion a year) for the country’s 1.5 million apprentices. That far exceeds the amount that U.S. firms spend on the less than five percent of young American workers who participate in an apprenticeship.
But American employers have never had a greater reason to invest in apprenticeships: the current six million job vacancies will only grow, as skilled laborers tend to be older and retire sooner than other workers. In addition, just as college is not working for some students, many employers say that college graduates are not working for them. Only 11 percent of business leaders strongly agreed that graduates have the necessary skills and competencies to succeed in the workplace.
Now is the best time for apprenticeships to migrate successfully from Europe to the United States. There is broad bipartisan support for the program. Let’s hope the former host of “The Apprentice” can boost apprenticeship programs, increase our labor force participation, and replace an aging work force with an army of young workers who access rewarding careers while incurring little to no debt.
(Photo credit: The White House. Public domain.)