House Lawmakers Seek to Expand Access to Apprenticeships for More Americans

Earlier this month, the House Education and Labor Subcommittee on Higher Education and Workforce Investment released a discussion draft of the National Apprenticeship Act of 2020, a bill to revamp the nation’s apprenticeship system. This is a critical way to expand access to economic opportunity. Apprenticeships allow people to earn money while learning skills needed for in-demand, well-paying careers. Because apprenticeships are tied to employer skill needs, their outcomes tend to be good: 94% of apprentices remain employed nine months after completion, and a worker who completes an apprenticeship earns an average starting wage of $70,000 a year.

The Subcommittee’s discussion draft would update the National Apprenticeship Act of 1937, enacted when our economy looked very different from today. Entire industries, like cybersecurity and information technology, have emerged since then. There is also a growing recognition that industries facing skill gaps, like energy, health care, and financial services, can use apprenticeships to develop the next generation of talent. To vastly expand and modernize apprenticeships, the bill would take several important steps:

• Create 1 million new apprenticeships over 5 years. Despite the benefits of apprenticeships for workers and employers, apprenticeships have not caught on in the United States the same way they have in European countries. In 2018, the United States had 585,026 active apprentices, or just 0.2% of the population. If we had the same participation rate as Switzerland, that figure would rise to over 8 million apprentices. Policymakers are right to think big when it comes to expanding apprenticeships.
• Provide annual formula funding to states to help them expand apprenticeships. One of the challenges states have faced in expanding apprenticeships is the lack of consistent, dedicated funding from the federal government to support those efforts. A sustainable source of funding will help expand apprenticeships to more people in more places throughout the country.
• Support innovative hubs that bring together individuals, educators, and employers to boost the number of apprentices. Apprenticeship intermediaries (or “hubs”) build a vital link between employers, educators, and apprentices—helping establish programs and guiding apprentices from recruitment to completion. The bill would provide grant funding for these types of partnerships to promote the expansion of apprenticeships in nontraditional industries and recruit people to participate in apprenticeships, particularly people from underrepresented populations. This idea aligns with Apprenticeship America, Third Way’s proposal to expand apprenticeships by establishing a network of Apprenticeship Institutes in each state, and is a tested way to increase the number of apprenticeships.
• Promote the creation of pre-apprenticeship and youth apprenticeship programs. Pre-apprenticeship programs help people gain the skills needed to enter an apprenticeship program, while youth apprenticeship programs offer high school students the opportunity to learn in-demand skills and earn money at the same time. Third Way has recommended that policymakers bolster these types of programs as a way to help more Americans access good-paying careers.
• Seek input from employers and other stakeholders on how to streamline the apprenticeship registration process. Many employers choose not to create registered apprenticeship programs because of burdensome registration and reporting requirements. Third Way and others have called for these requirements to be streamlined while maintaining quality.
• Improve coordination between the apprenticeship system, the public workforce development system, and the higher education system. As Third Way has written, there is currently a lack of coordination between our nation’s public job training system and our apprenticeship system. Fewer than 1% of jobseekers who enroll in training participate in registered apprenticeships.

As our country grapples with a global pandemic, our apprenticeship system won’t be center stage. And rightfully so—we need to do everything possible to mitigate the health and economic effects of this crisis. But we also need to ensure that when we emerge from this, American workers have as many opportunities as possible to rebuild their lives and find ways to thrive. Apprenticeships are key to this.

The draft bill is a positive sign that the Subcommittee aims to expand apprenticeships to more Americans and more industries. As Members of Congress consider the legislation, they can go even further. For example:

• Congress can encourage states to use their formula funding to hire dedicated apprenticeship coordinators who would travel the state engaging with businesses on apprenticeships. This is a strategy used by South Carolina, a national leader in apprenticeships.
• Since businesses are more likely to take a chance on apprenticeships if they see others successfully using them, the bill could promote greater employer-to-employer advocacy.
• The Subcommittee could also create a Federal Apprenticeship Loan program to provide small- and medium-sized businesses with low-cost financing to set up apprenticeship programs, since many businesses may otherwise lack the up-front cash needed to do so. Many states already provide employers with tax credits and other financial incentives to encourage them to hire apprentices. However, Federal Apprenticeship Loans would have the added benefit of reaching companies sooner than tax credits and, unlike grants, loan dollars can be recovered and reused.

A detailed summary of the Subcommittee’s discussion draft can be found here. Third Way applauds the House Education and Labor Committee for taking steps to strengthen the country’s apprenticeship system and broaden economic opportunity to more Americans.