This document provides an overview and rationale for expanding apprenticeship training programs in Maryland. It summarizes that the US lacks an effective system for integrating occupational training with labor market needs, and that apprenticeship programs can help address this issue. The document outlines strengths of apprenticeship models used internationally, provides evidence of positive impacts on workers and employers, and suggests concrete steps that states and the federal government can take to expand apprenticeship opportunities.

1. Expanding Apprenticeship Training in Maryland: Rationale and Suggestions Robert I. Lerman American University and Urban Institute

2. Today’s Agenda Describe apprenticeship in context of US system of skill preparation Convincing educators, employers, parents, and policymakers about why we should expand apprenticeship Ideas for achieving an expansion 1

4. Schools operate largely independently of labor market considerations, sometimes purposely

5. Other countries have good systems for transitions from school to work, but the US has a single “ideal”—finish high school, go to college, and find a career

6. Youth work while in school, not connected to careers

7. Expanding apprenticeship can help meet needs of workers and employers2

8. One Trillion Dollars$1,093,000,000,000 3

9. 4 Education, Skills, Jobs and Careers Preparing people for jobs, careers, life is a complex, multifaceted process—how can we best maximize: Value of education, training for cultivated person, voter, parent, and lifelong learner Value of education and training for jobs and careers that yield a good living, satisfaction

11. But jobs, careers, interests differ in skills demanded

12. Raises centuries-old tensions between the roles of general education versus career-oriented education

14. 7 Where is the US system in terms of preparation for jobs and careers? An academic-based system aimed at all students Heterogeneity expected to take place only in late college, graduate school, or on jobs Emphasis is on college-for-all policies Effort to maximize course requirements for high school graduation Modest numbers of alternatives, such as career academies & tech-prep—2nd chance programs

15. 8 Strengths and Weaknesses Strengths Develops world’s top universities Offers the chance to delay career choice with little penalty Big weaknesses Leaves many as dropouts in or out of classes Disadvantages many with practical learning styles Encourages long-term adolescence and delays mature preparation for careers Many students have little motivation to learn Supply-side initiative only—no incentive to restructure jobs in ways closely linked to training, careers

16. 9 Polarized System Not Well-Suited to Expanding the Middle Class Emphasis is on 4 year colleges; impose sameness on young people—sameness is not equality Community colleges are attempting to come to the rescue but their performance is highly uneven—often weaker than for-profit colleges Minimizes work-based learning, motivation Fails to prepare people with non-academic and occupational skills that employers demand

17. Measurement Gaps Are Part of the Problem Skills are years of schooling, test scores on academic tests Critical skills employers demand 1) occupational skills, 2) non-academic skills, communication skills, problem-solving, teamwork When we do not measure key skills, we are unlikely to focus on improving them 10

18. Washington employers, DifficultyHiring Qualified Workers, by Skill 11

21. The Community College Boom Community colleges have a place in expanding skills—evidence shows positive returns, to years and degrees But CC education is uneven and often falls short, partly because of weak links with employers, poor qualifications of entrants, minimal guidance, high costs, and now capacity constraints, crowded classrooms Not comfortable for people who learn best by doing, who can only learn key workplace skills in the workplace

23. For Career Academies, results from experiments show gains for at-risk youth

24. Exemplary high school Career/Technical Education and community college programs

26. Key concept “Learning through practice alongside and under the guidance of an expert practitioner is the most effective way, to transmit professional experience and skills from one generation to the next” 17

27. Apprenticeship as Youth Development READ The Means to Grow Up by Robert Halpern 18

28. Added points to stress Conveys occupational pride, identity, apprentices become part of “communities of practice” Emphasizes using skills; academic skills erode when they go unused Works on demand and supply sides of the job market; schools work only on the supply side Firms willing to finance training--studies indicate many breakeven during the training period Mentoring critical for at-risk young people 19

29. International Experience Apprenticeship is a mainstream route to career success in European & other advanced economies Provides training for 50-70 percent of young people in Switzerland, Austria, and Germany. Skills of manufacturing workers in these countries part of their comparative advantage in that sector Apprenticeships are expanding rapidly in Ireland, Australia, United Kingdom, covering many occupations, including nursing, information technology, finance, and advanced manufacturing 20

30. High Income Countries Further Ahead in Apprenticeships than BAs Switzerland has an income per capita that is over one-third higher than the US It has some great universities But in Switzerland, over 70 percent of young people go through apprenticeships Many of Germany’s best students—those who can attend college for free—go to apprenticeships 21

31. What makes Swiss successful? General skills are learned in a problem-oriented setting, offers good motivation for at-risk youth Skills learned by apprentices assist in the rapid adoption of new technologies National recognition of standards Provides attractive alternatives for talented youth who are tired of school Most employers providing apprenticeships recoup benefits that exceed the costs (value of productive help by apprentice is higher than costs) 22

32. UK Experience is Relevant Started fresh after giving up many programs Relatively free labor market Concerns about wage inequality Job skills, including workplace skills, of non-college youth a big problem Tendency toward college as the only route to successful careers 23

33. UK Apprenticeships Apprentices are employed people who receive official, structured training Related training delivered 1 day per week at a vocational provider (college, commercial company) They normally work 4 days per week or more But the program is flexible – the employer decides how it is delivered and the contents of the course Apprenticeships are for young and current workers Government subsidizes training costs 24

34. UK Program is expanding rapidly From very low numbers in 2000, the program is now reaching 281,000 entrants Completion rates are over 70 percent Expect 400,000 starts in 2014, thereby reaching the number entering UK universities Demonstrates feasibility even in countries that have not used apprenticeship lately 25

35. Most popular apprenticeships 26

36. Other new innovations Computer field is highly successful at using apprenticeships; graduates of computer apprenticeships in more demand than BAs Entrepreneurship apprenticeships have developed successfully in Finland Finland illustrates the importance of job-based training; high academic skills but very high youth unemployment 27

37. Evidence of returns for Canadian, Swiss 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 28

38. Help Firms Evaluate Benefits 29

39. So why not apprenticeship? Budget tiny despite massive increase in spending & initiatives for community colleges So what about the empirical evidence? Impacts on workers and employers 30

40. What about US experience? Impacts on workers? Many assume that occupational training is not effective since people change jobs often in the U.S. (This does not stop tens of thousands of people going to law school and medical school.) Of course, what you learn in occupational training can be applied to other jobs and even other fields Many who gain occupational training become more confident about subsequent learning 31

41. Best Evidence from Washington Results are based on a methodology that matches workers on their earnings before they enter one or another type of training It includes workers who enter public job service centers (One-Stops) The study tracked their earnings after training using administrative records drawn from the unemployment insurance system 32

45. In 2007, 1 in 4 sponsors operated joint programs, (labor-management) but they accounted for over 60% of all apprentices; 40% in union construction

46. Over half the sponsors (53%) had only 1-4 apprentices

47. Sixty percent of programs served only one employer, while 40 percent served multiple employers.

48. 48% of programs were over 10 years old35

49. Satisfaction and Main Benefits 97% of sponsors (97%) would recommend the program—86% would do so “strongly” Main benefits of program Helps meet their demand for skilled workers (80%) Reliably shows which workers have relevant skills (72%) Raises productivity, strengthens worker morale and pride, and improves worker safety (about 70%) Improvements in worker recruitment and retention and in meeting licensing requirements (56%) Saving on pay is a relatively minor benefit 36

50. Arguments Against Apprenticeship Apprenticeship is stigmatizing Usually the opposite is true; completers have great pride especially if skill standards and wages are high Apprenticeship reduces mobility—no evidence of this—again 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; employers have no incentive to train because of the fear of poaching 37

51. Reduced Youth Unemployment Countries that emphasize “dual systems” have lower unemployment rates Finland, which has top academic scores, have youth unemployment rates over 20% Germany, Austria, and Switzerland have very low youth unemployment rates, only slightly above adult unemployment rates 38

52. Poaching, Other Issues in U.S. Firms paying for training might lose if competitors hired away qualified trainees Yet, only 25 percent of sponsors see poaching as a significant problem; it is a problem for 50% Only 11% of sponsors are concerned about the program’s duration; only 8% see the use of experienced worker time as a significant problem 39

53. Where do we go from here? Pure academic approach is failing many kids and delaying success for many others--must first drop the idea that formal academic training need be the only route to quality careers. Learning and competency require engagement Student motivation is central component, it is time to recognize motivation and learning styles vary—from abstract, classroom-based approaches to hands-on, contextualized applications Variations important by sex—men are falling far behind in completing college 40

54. States, WIA Can Lead the Way Bring together community colleges, firms, and workers as part of broad effort-use new CC grants Meets various criteria—jointly designed with firms, basic skills with occupational training, transparent career pathways Provide allocation to employers for education costs of program—perhaps fund 1 of each 4 apprentices if recruitment is at One-Stop Insure employers can access occupation skill profiles 41

55. South Carolina’s Story Stimulated by the state chamber, the state began providing $1 million per year to expand apprenticeship—base is a technical college Also, a $1,000 tax credit per apprentice per year Effort so far has led to one new program per week, 50% increase in apprentices Shows what can be done with close marketing Cost per added apprentice is $3,600; present value of earnings gains at least $100,000 42

56. Concrete steps at state/federal level 43 Make apprenticeship the center of a national skills strategy for jobs in key industries and occupations Expand funding for the federal and state apprenticeship office especially for marketing but also to monitor, and conduct research on workers, firms, standards Establish a tax credit of $5,000 for each apprentice position beyond 80% of current levels by firms Provide more funding for the related instruction component of apprenticeship training Provide incentives for apprenticeship linkages with community colleges and career colleges

57. Make Occupational Standards Transparent, Accessible OA should cull all the occupational standards already used in the US and make them easily accessible to employers and the public OA should collaborate with other countries to compare occupational certifications Will still require marketing to employers but can ease the process Develop scenarios to show governors and legislatures how apprenticeship can save postsecondary dollars and improve outcomes 44

58. Government as Employer Many skills used in the government are also used in the private sector One in six jobs are government jobs Some—police and fire—often use apprenticeship but much more could be accomplished if the federal, state, and local governments built new programs 45