What’s
Wrong Today:
It’s May
Day in the US, May Day was celebrated by early European settlers. International Workers’ Day began in the
US as a commemoration of the Haymarket Massacre of 1886 in Chicago. After the
1917 workers’ revolution in Russia, May Day
became a widely celebrated holiday in industrial areas of the US.
So, with
workers on today’s radar, it is appropriate we continue yesterday’s discussion of how low-wage jobs are driving
our recovery from the jobs lost in the Great Recession. Reader Linda S. called
out an article in the Wall
Street Journal about the decline in apprenticeships available from US
corporations. From the WSJ:
to the Labor Department, formal programs that combine on-the-job learning with
mentorships and classroom education fell 40% in the US between 2003 and 2013
Here is a WSJ chart that describes the current apprenticeship
situation:
Most of us
are unaware that there is a National Apprenticeship Act that was passed in 1937, an earlier
poor economic environment. It is administered by the Department
of Labor (DOL), and
establishes minimum standards for apprenticeship programs. The Act was later
amended to permit the DOL to issue regulations protecting the health, safety
and general welfare of apprentices, and to encourage the use of contracts in
the hiring and employment of them. Subsequently, additional regulations banning
racial, ethnic, religious, age and gender discrimination in apprenticeship
programs became part of the Act.
Earlier
this month, President Obama set aside $100 million to go toward apprenticeships
in high-growth industries, and recognized a few new programs in health care,
information technology and supply-chain management. Whilst in the UK people can get cips level 4 apprenticeships, this is at least a start towards diverifying the options over here in the States.
So, with
government assistance and oversight, why are these programs declining in usage?
Perhaps the
biggest obstacle is that two-thirds of
apprenticeship programs in the US are in the construction industry, and
jobs in construction have just not recovered:
Construction
jobs are down by 1.2 million since the start of the Great Recession.
Apprenticeships
involve more industries than the handful of trades that embraced the
earn-and-learn model that began in 1937: Wastewater technicians and
computer-system administrators are among the positions for which apprentices
can now train.
Another damper is a widely held view that young people should
stay in school and then get a job. Advocates of apprenticeships say this
thinking is misguided. The WSJ quotes
Brad Neese, director of Apprenticeship
Carolina, a program of the South Carolina Technical College System:
(brackets by the Wrongologist)
degrees and internships don’t produce the same quality of worker as intensive, on-the-job
apprenticeships…[Employers are seeing] a real lack of applicability in terms of
skill level from college graduates…Interns do grunt work, generally
[while] an apprenticeship is a real job
South
Carolina has had great success increasing the number of apprenticeships. The number of SC businesses offering
apprenticeships has grown from 90 in 2007 to 647 today. Some 4,700 people who
trained in South Carolina’s apprentice program are now fully employed. To get
employers involved, the state offers a $1,000 annual tax credit for each
apprentice on the payroll. More from Mr. Neese:
helps open the door…For a small business, the credit can wipe out the
education costs for an apprentice program. We’ve tried to make the tax credit
as user-friendly as possible…We have a very simple one-page form that
literally says, ‘How many apprentices do you have?’ and then you multiply that
number by $1,000
Apprenticeships
are very much alive in the professions, we just call them something else. What
is a MD’s residency but an apprenticeship? (albeit paid for by Medicare) Accounting and Law work the same
way, you leave school and work like a slave for a few years in exchange for paying
tuition (in the form of longer hours and lower wages) while getting real world skills.
Universal
acceptance of apprenticeships in corporate America is not an easy problem to
resolve. Our current educational system poorly serves the need for skilled
workers. Schools regularly push their students (especially the
“smart” ones) towards college education and many parents, perhaps
unaware of other options, go along with this line of thinking.
The
desire by parents for their kids to have a gradual “socialization” experience by attending college, is likely another contributing factor.
The other side of the problem is that companies are often reluctant to offer
apprenticeship programs because they fear (often with good reason) that the graduates
of such programs will be quickly “poached” by other companies who do
not offer training programs. (See our High Tech Collusion column which describes the
prevalence of “no-poaching” agreements in Silicon Valley.)
Germany’s success, as the chart above shows, might be a model for US apprenticeships.
Their strategy, apart from producing skilled workers, also provides options for
further education. In that system, a skilled toolmaker can go on to earn a
doctorate in engineering. The political and social structure required by such a
system would probably not be welcomed in the US as it would involve interlocking arrangements between government
industrial policy and corporate strategy, which US conservatives would
label as “excessive interference” in markets or, as “socialist”.
Thirty
years ago, throughout the US, it was quite typical for a company to pick up
tuition costs for part-time attendance at major public or private universities
or at community colleges, provided that the courses were work-related and part
of a technical degree program.
As soon as corporate America sold the
concept of H1B visas to Congress that policy started to evaporate. Many
American companies don’t train their workers (so much) anymore. Most of those
companies treat employees as disposable assets and focus more on short-term profits
than building skill sets and loyalty by their employees.
Our industries would work better if
more schools offered technical courses for interested students. In past years,
students in industrial schools completed their apprenticeship while in high school.
That allowed them to enter the working world as journeymen, able to earn a good
living.
And despite
what corporate America says they want, there’s NO such thing as finding the
“ideal” employee, one that is young, without unreasonable salary demands, but
with a complete skills set.
That is unrealistic,
just like searching for the “ideal boss”.