Robert I. Lerman American University and Urban Institute

1. Robert I. Lerman American University and Urban Institute Setting the Stage: Benefits and Challenges of Apprenticeship2009 Manufacturing Summit: Recruiting and Training a Globally Competitive Skilled Workforce

2. Machinists in Arlington, Texas • Less than 1 year ago, the chair of the Institute for a Competitive Workforce recounted a story about vacancies of high level machinists in a Texas area where companies were manufacturing aircraft • In trying to fill the vacancies, the chair asked workforce agencies, community colleges how many they were training and the answer was none • He realized the complete disconnect between the training system and employer demand • Similar stories have been told about welders

3. Why the disconnect? • US lacks a good system for seamlessly integrating demands for occupational skills with the training systems for building such skills • Schools operate largely independently of labor market considerations, sometimes purposely • Unlike several other countries which have good systems for transitioning youth from school to work, the US has almost a single “ideal”—finish high school, go to college, and then find an occupation • Oddly, youth work while in school but in ways not connected to their careers

4. Lack of Apprenticeship and Implications for Manufacturing • US firms have admired apprenticeship systems in Germany and central Europe at least since 1910 • With well-developed apprenticeship training, young workers learn skills while doing productive work • This focused combination of work-site learning and related schooling leads to well-recognized credentials • The learning by doing model is not only productive for the worker, but also for the employer • Differences in training systems may explain why Germany and Switzerland have more than double the shares of jobs in manufacturing compared to the US

5. Apprenticeship in the US is a small, hidden system, but quite successful • US has about 480,000 registered apprentices and an unknown but probably just as large unregistered number of apprentices—this # is larger than the training through WIA • Returns to apprenticeship look substantially higher than returns to community college and with far lower risks because of low costs • Apprenticeship sponsors report high satisfaction • Budget of OA is very small, under $30 million

8. What about employers, sponsors? • No prior representative survey of sponsors • Designed to capture nationally representative data on the characteristics and attitudes of registered apprenticeship sponsors. • Sample frame was 90 percent of the estimated universe of private sector sponsors in 32 RAIS states and six other states—no military or prison programs • 947 sponsors completed the survey instrument—they represent about 21,000 sponsors, 316,000 apprentices

9. Employer sponsors look satisfied • Nearly all sponsors (97%) said they would recommend the program to others—86% would “strongly” recommend the program—11% recommend, but with reservations, mainly due to problems with related instruction. • Main benefits of program • Helps meet their demand for skilled workers (80%) • Reliably shows which workers have relevant skills (72%) • Raising productivity, strengthening worker morale and pride, and improving worker safety (about 70%) • Improvements in worker recruitment and retention and in meeting licensing requirements (56%) • Saving on pay is a relatively minor benefit

10. Potential drawbacks for employers far less serious than expected • Biggest issue cited by labor economists and officials is concern about “poaching”; natural to think that firms paying for the training would lose if competitors simply hired away the qualified trainees • Yet, only 25 percent see this issue as a significant problem—still, over half think it is a problem • Several theoretical problems not as important as feared—only 11% are concerned about duration and only 8% see experienced worker time as a significant problem • About half see dropouts as at least some problem

11. Completion Rates are high • 54 percent say that at least 80 percent of their apprentices complete their program. • High completion rates were especially common in the aerospace, automotive manufacturing, energy, health services, retail, and transportation industries. • Still, as noted above, non-completion is of some concern to over half of sponsors; 24% saw completion as a significant problem and 31% as a minor problem. • Personal and performance reasons both help explain non-completion; but 30% said non-completion took place when apprentices earned a license, then moved to another job

12. Evidence of returns for Canadian and German Employers • Studies show employers reap returns to apprenticeship training often even during the time of training • Apprentices produce less than their earnings and the overall costs during the first year but produce more than they earn in later years • No comparable studies in the US

13. Other Advantages of Apprenticeship • Intensive combination of work-based (3-4 years) and classroom training (2+ years)—latest CEA report mentions importance of “contextualized learning” in showing positive impacts of programs • Additional benefits--high standards for recognized credentials—meets state licensing and certification • Education and training is integrated into jobs and careers • No lost earnings while undergoing training • Retains options for college degree • Generates high skills that are applied • Leads to a sense of occupational pride • Trains people holistically in non-cognitive skills

14. Skill Development, Youth Development, and Work-Based Learning • Young people reap developmental benefits from engaging in apprenticeships and internships • They work with natural adult mentors who can guide them but allow them to make their own mistakes • Youth see themselves judged by the established standards of a discipline, including deadlines and the genuine constraints and unexpected difficulties that arise in the profession • Young people learn through observation, imitation, trial and error, and reiteration, through force of experience • Professionalism and care are expected, perfection is not • Adult mentors hold the discipline for the apprentice, sequencing and controlling task demands to keep them on the constructive side of difficulty.

15. Career-Focused Learning Particularly Relevant to Minorities and Young Men • They see relevance and gain immediate rewards from doing and earning • Does not require sitting in class all day • Involves young people in constructive adult atmosphere, including natural adult mentor • Focus is on achieving skills, not grades • Offers a sense of occupational pride and identity

16. So Why Don’t We Do More? • US is engaged in an academic-only, college for all approach • It imposes a sameness on young people that is inappropriate, given the variety of occupational skill requirements, learning styles, interests, and motivations; sameness, not equality • Too much emphasis on college-ready curricula causes the education and training system to fail to prepare young people with non-academic and occupational skills (some say you need the same preparation for work and college—this is hard to define—generally not true)

17. Appropriate Balance Between Uniformity and Heterogeneity • Clear that success in modern life requires some capabilities that all should achieve • Also clear that jobs, careers and interests differ widely in the skills required • Immediately raises the centuries-old tensions between the roles of general education versus specific, career-oriented education • Education world is largely homogeneous while the world of work is highly heterogeneous

18. Heterogeneity in Learning Styles, Timing, and Motivation • Another complexity--learning and competency cannot simply be delivered like a pizza but require engagement • Student motivation is a central component • Motivation and learning styles vary—from abstract, classroom-based approaches to hands-on applications of principles • Variations become particularly important with age—the appropriate timing varies as well

19. Measurement Gaps Are Part of the Problem • Main measures of skills are years of schooling and scores on academic tests • Even these measures are often faulty, as for example estimates of high school graduation • Little attention to critical skills employers demand—including 1) occupational skills and 2) non-academic skills, communication skills, problem-solving, teamwork • When we do not measure key skills, we are unlikely to focus on improving them • Many workplace skills can be learned best in a combined working and learning environment

20. Mistaken Idea That College-ready and Work-ready Skills are the same • Primary indicator of skill in the US is the level of educational attainment of the work force • Measures of this simple indicator are uncertain • Secondary indicators are scores on tests of students and occasional tests of the work force • Missing are measures of skills that employers require, including motivation & other non-academic skills, such as communication, working well in teams, planning, and reliability—noted in SCANS and 21st century skills • Also missing are broad measures of occupational skill • Cannot manage what we do not measure

25. Where do we go from here? • Make apprenticeship the center of a national skills strategy for middle-skill jobs in key industries and occupations • Empower a national center on apprenticeship to • Make competitive grants to states for expansion of apprenticeship and marketing to employers • Make competitive grants to states for high demand job training partnerships using Registered Apprenticeship.  The grants could pull together workforce entities and economic development to do focused job training, along the lines of sector strategies • Consider financial incentives for employers—especially more help for the academic component & for starting programs and added apprentices beyond 80% of last year’s total

26. A few states show the way • South Carolina shows what can be done with modest budget outlays • Stimulated by the state chamber, the state provides $1 million per year to expand apprenticeship—base is a technical college • Small tax credit for small employers • Effort so far has led to one new program per week, 50% increase in apprentices • Cost per added apprentice is $3,600; present value of earnings gains at least $100,000

27. Responses to Arguments Against Expanding Apprenticeship • Apprenticeship is stigmatizing—it is usually the opposite-completers have great pride especially if the skill standards and wages are high—can have apprentices gain college credits • Apprenticeship reduces mobility—no evidence of this—some evidence for just the opposite; no indication that skills are too specific—many of the generic skills learned are widely applicable • Apprenticeship requires employers—so does every other job outcome

28. Expand Apprenticeship to Retain Existing Manufacturing Base • Manufacturing still accounts for 15 percent of US output in normal times • Decline in the value of the dollar offers opportunities for expansion in this sector • Doing so requires a reorientation of the training system in many areas • We should learn from the experience abroad and expand apprenticeship training