Connecting Workers with Jobs Through Apprenticeships

By Ethan Greenberg and Joellen Kralik | Vol . 25, No. 36 / September  2017


Did you know?

In order to build a qualified workforce prepared for 21st-century jobs, federal and state governments are interested in developing increasingly robust apprenticeship systems. Apprenticeships are work-based learning programs in which industry professionals and educational institutions partner to align on-the-job training with curriculum and instruction. Apprenticeship programs are a unique type of work-based learning because the apprentice is paid by the employer, or “earning while learning.”

One evidence-based strategy being used to meet the needs of businesses and workers is the registered apprenticeship program, in which the U.S. Department of Labor’s Office of Apprenticeship (OA) works with independent State Apprenticeship Agencies (SAAs) to provide on-the-job training.

To take part in a registered apprenticeship, apprentices must register with the OA or an SAA, be sponsored by an employer, be at least 16 years old (18 for certain occupations) and take a recommended 144 hours of instruction per year. The OA and SAAs make sure that, upon completing the registered apprenticeship, workers receive a portable, widely recognized industry credential.

Most apprenticeship programs take four years to complete, and require a significant financial investment from sponsoring employers—ranging from $25,000 to $250,000 per apprentice—because employers must pay a fair wage and any other training expenses.

Registered apprenticeships are the primary focus of apprenticeship-related research and policy because data is available through the Registered Apprenticeship Partners Information Data System (RAPIDS). However, there are an estimated additional 1 million apprenticeships that do not go through the federal registration process.

There are currently more than 500,000 workers in registered apprenticeship positions in the U.S., up from 375,000 at the end of 2013. Even accounting for the increase, registered apprenticeships make up less than 1 percent of the workforce in the U.S.

State Action

States are working to support or offer incentives for collaboration between industry and education to expand apprenticeship opportunities. One strategy states are using is to offer businesses some form of tax relief to help ease the costs they often take on to train an apprentice.

In the 2017 sessions, five states—Arkansas, Maryland, Montana, New York and West Virginia— enacted legislation creating or adjusting tax incentives available for businesses that participate in apprenticeship programs, bringing the number of states offering such incentives to 14. The structure for these tax credits vary, but they all are designed to reimburse training costs or reduce the businesses’ tax liability.

Tax incentives for businesses are not the only way states are working with the private sector and schools to encourage apprenticeships. South Carolina and Colorado, for example, each have taken robust approaches to increasing apprenticeship opportunities in their states.

South Carolina started Apprenticeship Carolina in 2007, a holistic approach that includes tax incentives for employers, as well as apprenticeship consultants and coordination with the 16 technical colleges located throughout the state. Since the start of Apprenticeship Carolina, the state has seen a 732-percent increase in the number of apprentices and an 873-percent increase in registered apprenticeship programs.

In recent years, Colorado has passed a portfolio of bipartisan legislation with a variety of strategies aimed at boosting access to apprenticeship opportunities. They include a creating a $10 million grant program to provide skilled worker training programs like apprenticeships, allowing high schools to award credit toward registered apprenticeship and internship programs, and commissioning a study of barriers to using apprenticeship programs. Colorado has also created the Pathways in Technology Early College High Schools (P-TECH), a public-private partnership providing students access to internships, pre-apprenticeships and other workplace educational experiences.

Federal Action

President Trump signed the Expanding Apprenticeship in America executive order in June 2017. The order nearly doubles federal funding for registered apprenticeship programs, lowers requirements and accountability standards, and allows third parties to establish their own bars for success rather than comply with a prescriptive method by the Labor Department.

Apprenticeship expansion has been a bipartisan effort at the federal level. President Obama invested in registered apprenticeship programs during the later years of his administration and Congress approved $90 million in 2016 to expand registered apprenticeships in a variety of sectors across urban and rural communities.

Federal funding for registered apprenticeship programs is available through several federal agencies, including the departments of Labor, Education, Agriculture, Veterans Affairs, Agriculture, Transportation, and Housing and Urban Development.

DOL funding for registered apprenticeship programs is allocated through the Workforce Innovation and Opportunity Act (WIOA), as well as a handful of other expansion and discretionary grants. WIOA, enacted in 2014 with broad bipartisan support, is the largest single source of federal funding for workforce development activities. WIOA Title I funding can be used to support registered apprenticeships, which states can use to meet the workforce development goals set forth in WIOA.

The Education Department’s Pell Grants and Federal Work Study programs provide funds for workers to pursue higher education through registered apprenticeships. Through the Every Student Succeeds Act, Title I funds can be used to support experiential and work-based learning opportunities, such as apprenticeships, for K-12 students.