YOU DECIDE: Should we revive apprenticeships?

Media Contact: Dr. Mike Walden, 919.515.4671 or michael_walden@ncsu.edu

By Dr. Mike Walden
North Carolina Cooperative Extension

After returning from World War II, my father faced a simple yet extremely important decision. How was he going to earn a living? A high school drop-out, he had little interest in “book-learning,” as he used to call it. But he was intelligent. Indeed, to his dying day, I was always impressed at how sharp and insightful he was. It’s just that his interests weren’t met by sitting in a classroom.

My dad had always liked building things (we still have a small table he made when he was in fourth grade). So he entered an apprenticeship carpentry program through the local carpenters union in Ohio. There, he worked with professional carpenters and learned the skills of the trade.

He earned very little for several years; in fact, he could have made more working in a factory. But the apprentice program was an investment in my dad’s future. When he finished, he was a master carpenter with a wage rate to match. My dad was never rich, but he did provide a decent life for his family over a career spanning 40 years.

Apprenticeship programs like the one my dad used have been declining in our country. There are only half as many new apprentices today as there were only six years ago. In North Carolina, there are only 5,700 active apprentices in 2013. In contrast, apprenticeship programs in some European countries have been on the rise and are considered a fundamental component of their worker training system.

Several factors have been cited as reasons for the lack of apprenticeships in the U.S. Among them are difficulties in coordinating the programs with the traditional education system, limited understanding of apprenticeships and their value, costs to businesses of using apprentices and the decline of unions. Labor unions were often the organization that managed apprentice programs.

Yet many experts think apprenticeships can play an important role in today’s labor market, and therefore, they should be expanded. Supporters refer to studies showing shortages of qualified workers for occupations like machinists, machine operators, distributors and repair technicians – all fields where apprenticeship training could be valuable. The studies estimate almost 4 million jobs could be created nationwide if the skills gap in technical and vocational fields was closed. For North Carolina, this would translate to approximately 120,000 jobs.

Some states are already moving ahead on bigger apprenticeship programs. South Carolina has twice as many apprenticeships relative to their population as North Carolina. Many are focused on the state’s large automotive industry. The auto companies see apprenticeships as a way to ensure a steady supply of qualified workers.

Many hurdles would have to be jumped for apprenticeship programs to expand. First is coordination with the existing education structure. Should apprenticeship programs be part of high school training, after high school, coupled with community college training or a totally separate program on their own? Should schools take the lead in managing apprenticeships; should businesses or another entity?

Businesses have the crucial role to play in apprenticeship programs, and a couple of hurdles exist here. One is very practical. Will a business only take the time and effort to train an apprentice if they know that once the training is complete, the trained worker will stay with them for a specific period of time? If so, then some contractual arrangement would have to be made between the business and the trainee. States might want to consider guidelines on such arrangements.

This issue leads to another business hurdle — the question of whether the business pays the apprentice or the apprentice pays the business for the training. Certainly while they are learning, apprentices are doing some work for the business, so on this basis they would be expected to receive some payment. But on the other hand, the apprentice is being educated and trained by the business, so this would lead them (the apprentices) to pay the business. If the latter is the case, apprenticeships look much less appealing to individuals.

This brings us to the last hurdle — government. What should be the role of the public sector in encouraging and managing apprenticeships? Should government’s role be passive, limited mainly to encouraging the development of apprentice programs and publicizing their existence, but then letting the programs run themselves? Or, should government be more active, perhaps in providing financial support through tax incentives to participating businesses or public payments to apprentices while they are trained?

Our labor market is undergoing enormous change. Change always creates problems. One problem in today’s labor market is unemployed workers who can’t find jobs co-existing with businesses who can’t find qualified workers for job openings. Some say one solution is to re-invent what my dad did almost 70 years ago — apprenticeship programs. You decide if what led one World War II vet to prosperity can be repeated today.

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Dr. Mike Walden is a William Neal Reynolds Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of N.C. State University’s College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy. The College of Agriculture and Life Sciences communications unit provides his You Decide column every two weeks. Previous columns are available at http://www.cals.ncsu.edu/agcomm/news-center/tag/you-decide

Related audio files are at http://www.cals.ncsu.edu/agcomm/news-center/category/economic-perspective/