Report: How to Scale America's Apprenticeships 20-Fold

• By Dian Schaffhauser
• 07/19/18

A new report examines how to increase the number of apprenticeships from the current 50,000 per year in the United States to 1 million. Published by Third Way, a national think tank that champions "center-left ideas," the report specifically proposes creation of a national network of "apprenticeship institutes" in every state. These centers would act as hubs for employers, workers, high schools, community colleges and unions.

The institute approach, referred to as "Apprenticeship America," would replicate the broad success established by the public university model in this country. Federal funding (set at $40 billion) would spark creation of 50 state institutes whose jobs would be to recruit companies and help them launch new apprenticeship programs, deliver soft skills education, identify local in-demand occupations primed for apprenticeships, connect apprentices to childcare services, report on progress to the Department of Labor and related activities.

A federal apprenticeship loan program is part of the proposal. Loans would go to companies smaller than 5,000 workers, to subsidize the expense of setting up and paying for new apprenticeship positions. Similar to federal student loans, these would be repayable at "extremely low, near-risk-free interest rates" over the course of four to eight years, depending on the length of the apprenticeship. Where companies met certain quality benchmarks in terms of apprentice completion, retention or wage growth, the government would forgive the loan.

According to authors May Amoyaw and David Brown, the concept of the apprenticeship is what's needed to address the skills gap that exists between untrained workers and industry's "growing demand for skilled, well-paid workers."

The advantage to the workers is that this model allows them to "earn while they learn" and gain training "inextricably driven by employer demand." On the employer side, the report suggested, apprenticeships are a route to building a "better-trained, more reliable workforce."

The authors looked to other developed economies, including Switzerland, France, Scotland, Germany and England for examples of success. In Switzerland, for instance, 70 percent of students choose to pursue apprenticeships, and 30 percent of companies participate. In that country, the work experience doesn't replace college education so much as reside alongside it; college enrollment stands at 58 percent.

If Americans were able to participate at similar rates, the report estimated, 3.1 million people would be enrolled in on-the-job-training experiences. Or, to meet the million-apprenticeship goal, each hub would have to support a cohort of about 20,000 apprentices, "a scale similar to that of flagship public universities."

Where would the funding come? Third Way recommended closing "various loopholes" in the Trump tax bill and diverting the revenue to "investment in human capital."

The report and a related infographic are openly available on the Third Way website.