What do Hillary Clinton, Marco Rubio, Scott Walker and President Obama have in common? They are all talking about apprenticeships – and no, it’s not because Donald Trump is running for president. They are pushing for apprenticeships because they make economic sense. In fact, research has shown that those with vocational qualifications in the U.S. rely less on welfare and pay more in taxes, saving the government $12,500 over nine years.
Instead of spending thousands of dollars on college and taking on massive debt, apprentices work towards a technical qualification while employed. They develop practical skills in the workplace, and learn theoretical knowledge at a community college or training center. And it’s not just for those who want to learn a trade – apprenticeships can and should be offered for professions including IT, social media and accountancy.
Our latest research shows that in the United States, a 10 percent increase in enrollment in career and technical education, including apprenticeships, among 16-18 year olds would lead to a 1.5 percentage point drop in youth unemployment. Research also shows that the cumulative productivity benefits of hiring an apprentice – such as greater output and higher-quality work – are as high as $120,000 after three decades.
This year, Sens Cory Booker (D-N.J.) and Tim Scott (R-S.C.) introduced the LEAP Act in an effort to expand apprenticeships by offering employers a new federal tax credit. The bill seeks to open up opportunities in a wide range of fields and correct misperceptions about apprenticeships, which are often misunderstood in the U.S.
Apprenticeships have long been the norm in Europe. Eight hundred fifty thousand young people are currently engaged in apprenticeships in the U.K., which significantly outnumbers America’s 410,000 apprentices – even though the U.K. has a population one fifth the size of the U.S.
Why is there this discrepancy? That’s precisely the question that the City & Guilds Group explored in recent conversations with leaders in Congress and the Obama Administration, who expressed that the United States needs more highly-skilled workers. In fact, Georgetown University has found that there is shortage of five million workers with in-demand technical certifications and credentials. At the same time, 12 percent of young people are currently unemployed. Apprenticeships can help solve these escalating issues, but there are a number of myths getting in the way of greater adoption of apprenticeships.
First, some people might say that even though apprenticeships work in Europe, they wouldn’t work in the United States. But the fact is apprenticeships are already working here. In Senator Scott’s home state of South Carolina, for example, thanks to a partnership between the South Carolina Technical College System and businesses like Pepperidge Farm and GE Aviation, 12,500 individuals have benefited from apprenticeships. An average of 120 new apprenticeships are created each month, and the number of employers offering registered apprenticeship programs has gone up from 90 to 748 since 2007 – a 731 percent increase. The challenge the United States faces is scaling the great success stories and making them the norm, not the exception.
Second, it is also a commonly held belief that a college degree is the best path to a good job. That perception is misled. Currently, just 59 percent of people who start college actually graduate. And for those who graduated in 2015, Edvisors.com estimates that they were burdened with an average of $35,051 in debt each.
A study by the Pell Institute and PennAHEAD recently found that only 9 percent of students from families making $34,160 a year or less earn a bachelor’s degree, compared to 77 percent of students from the wealthiest families – those making over $108,650 a year.
In reality, a college degree isn’t right for all Americans – nor is it always the best way to train technical skills that businesses need. In the U.K., companies like Microsoft, Google and PwC offer apprenticeships because they see them as a great way to get the talent they need for their businesses to compete and grow. Having the best people can make all the difference for businesses like these, and finding and retaining the best talent is harder than ever.
Apprenticeships provide another option to a college degree – not a better option for everyone, but a better option for many. The challenge is building awareness and credibility of apprenticeships for what they are – a great way to develop technical skills that industry needs.
Finally, employers express concern that apprentices will take their training and go. In reality, that isn’t true. Apprenticeships require companies to invest time and money. It makes sense that employers worry about their apprentices jumping ship for more cash from a competitor. But apprentices don’t just up and leave. In fact, they tend to be more loyal and committed to their organizations than other employees. Headquartered in London, the City & Guilds Group assesses and qualifies hundreds of thousands of apprentices each year, and our experience bears out the value of investing in apprentices. For example, National Grid, the international electricity and gas company, says that nearly nine out of ten apprentices in the U.K are still with them, five years after graduating.
Elected officials and policymakers have good reason to get behind apprenticeships: They help people get into and stay in high paying jobs while addressing the skills gap that companies are so urgently trying to solve.
Chris Jones is CEO and Director-General of the City & Guilds Group, a global leader in apprenticeships and skills education.