Trust in higher education falls with it college enrollment. Many prospective students are no longer confident that a traditional college degree will equip them with the skills needed to succeed in the job market. There is a demand for alternative solutions: a American Compass Survey found that, by a 57-43 margin, parents would rather have their own children participate in a three-year apprenticeship than attend college on a full scholarship.
Politicians of both parties talk about expanding apprenticeships. But Ryan Craig has a plan to do just that. Craig’s new book, “Apprentice Nation: How Alternative Higher Education Will Create a Stronger and Fairer America» examines models of successful apprenticeships at home and abroad and reflects on the policies that would be necessary to build on the progress already made.
Apprenticeships are increasing, but not fast enough
An apprenticeship is a paid job that hires new employees based on their potential productivity rather than their current skills or experience. Apprentices learn the tools of the trade on the job and are paid a salary from day one. While on-the-job learning is the central pillar of the apprenticeship, the model also incorporates classroom time, known as ‘relevant technical teaching’.
The Department of Labor (DOL) References more than 600,000 registered apprentices in the United States (up 106% from ten years ago), with an unknown number of unregistered apprenticeships not tracked by the federal government. While analyses of various registered apprenticeships have documented significant wage gains for participants, the model has struggled to gain ground outside of a few key trades, notably electricians, plumbers and carpenters.
As a result, apprentices are a much smaller share of America’s workforce than the workforce of peer nations. Per capita, Britain and Australia have eight times as many apprentices as America, and Germany has fifteen times as many.
About these German Apprenticeships…
Germany’s apprenticeship system is the international gold standard according to many. Unfortunately, Craig argues, the model probably can’t be replicated in the United States. The modern German apprenticeship system spans over a century and assigns important roles to Germany’s powerful chambers of commerce and trade unions. Apprenticeships are strictly regulated and firmly integrated into the unique institutions of the German economy. But the rigid German system appears to be faltering: the number of apprentices in the country is falling and many companies appear to be abandoning the model.
Instead, Craig advises us to look to our friends in the Anglosphere, who developed their modern apprenticeship systems much more recently. Britain, for example, increased the number of apprentices in its workforce eightfold between 1997 and 2017 – about the rate of growth America would need to match. Australia has quintupled apprenticeships between 1990 and today.
In both countries, companies were not expected to create apprenticeships themselves. Instead, apprenticeships are set up and run by intermediary organisations, which the government reimburses for each apprentice trained and placed with an employer. While it would be prohibitively expensive for any company to design an apprenticeship program from scratch, intermediaries have allowed the model to scale.
Intermediaries are the key to successful apprenticeships in new fields
Apprenticeship facilitators are no stranger to the United States. A 62-page chapter in the middle of “Apprentice Nation” runs through dozens of successful models in the United States. Year Up, a not-for-profit organization, recruits apprentices aged 18 to 24 from disadvantaged backgrounds. Apprentices begin with six months of classroom instruction, where they learn hard skills such as business operation and soft skills such as professional behavior. The next six months are spent in a corporate job. Year Up’s program increases participants’ annual wages by $8,000 per year, relative to a control group.
Year Up apprentices’ white-collar digital economy jobs challenge the traditional view of apprenticeships as a means of training for well-paid but professional jobs. Apprenticeships, Craig argues, should be seen as a path that can prepare America’s youth for any kind of career. Researchers at Harvard Business School think so three million jobs in America it could be covered through apprenticeships in all sectors of the economy.
In Craig’s view, the most clear and pressing need for apprentices is cyber security. This field is a small 600,000 workers for a career that boasts a starting salary of $78,000. While prospective employees can pursue graduate degrees in cybersecurity, these credentials are expensive and filled with outdated curriculum.
Instead, Craig points to cybersecurity firm Ultraviolet, which offers a twelve-week paid apprenticeship program. Apprentices spend six weeks in the classroom and six weeks learning on the job. Full-time employment is offered to people who complete the Ultraviolet program, but many jobs land at other companies to work in cybersecurity homeland security.
Why the US funding model doesn’t work
While some of these providers register their apprenticeships with the Department of Labor to seek federal funding, others don’t bother. Registration requires compliance with a strict set of regulations and spending months navigating red tape. Craig argues that standards for registered apprenticeships are tailored to the particular needs of construction apprenticeships, the sector that dominates today’s landscape.
Once apprenticeship providers have jumped through the registration hoops, federal funding is not guaranteed. There is a limited pot of money available with many strings attached. Existing apprenticeship providers often soak up all the cash, meaning newcomers can’t get a slice of the pie. The cost is not worth the reward for many potential providers.
The Department of Labor has attempted to expand apprenticeships by awarding block grant funding to potential intermediaries, especially unions and community colleges. However, most of these grantees are, to use Craig’s terminology, “low-intervention” intermediaries: they do not run the apprenticeships themselves, but try to persuade employers to offer apprenticeships using their models. Craig questions whether these supposed apprenticeships are sustainable after the funding runs out. “The only jobs they create are managing DOL grants,” he observes.
A more powerful approach: crowdfunding
Apprenticeships are poised to expand, but for many employers and intermediaries, Craig believes a significant government grant will be needed. Companies must be persuaded to hire inexperienced workers and invest in their training, even when they could be lured away by their competitors. Many employers will decide it’s not worth it.
Another factor is government subsidization of higher education, which puts many young people on the college path and encourages employers to rely on degrees rather than apprenticeships to develop workers’ skills. America spends 1,000 times more money on college than on apprenticeships, according to Craig. Apprenticeship cannot succeed at scale if the playing field is tilted against it.
Rather than the discretionary funding model that has prevailed to date, Craig suggests using formula funding to support apprenticeships. Funding would always be available as long as workers and providers meet certain conditions, just as Pell grants are available today to any eligible college student who wants them.
Craig is calling for two main funding streams. First, the government should directly pay for the classroom components of apprenticeships based on a set schedule. Second, intermediaries should receive a set payment (Craig suggests $4,000) for each apprentice they train and place in an upwardly mobile job paying at least $40,000.
Taking smaller measures to support apprenticeships
The idea is interesting, but Congress will have to fund it somehow. One idea is to hold colleges to the same performance standards as apprenticeship providers. Maybe the Department of Education should pull federal funding from schools where students don’t attract upwardly mobile jobs paying at least $40,000. Savings from this could fund the new apprenticeship scheme, leveling the playing field.
Political realities may prevent that from happening any time soon. In the short term, I would prefer to see Congress modify existing higher education subsidies to make them more apprenticeship-friendly. As I wrote last month, Congress could allow Pell Grants to pay for apprenticeship classroom components and revise federal work-study to subsidize apprentice wages.
Craig offers some other ideas for enhancing discipleship. Government agencies should create apprenticeship programs to fill public sector jobs, like Colorado has done recently. States should also remove degree requirements from occupational licenses so that these jobs can be filled through apprenticeships, which is what my FREOPP colleague Annie Bowers and I have. is also suggested.
Whether or not his proposals become law anytime soon, Craig’s book is worth reading for anyone interested in economic mobility or the future of work. It might find a market on Capitol Hill. And hopefully it will convince more than a few employers to fill their open jobs with the profit-and-learn model that has seen so much success elsewhere.