Editor’s Note: For years, the Urban Institute’s Robert Lerman has been bugging us about apprenticeships. Just last year, amid the push for a “common core” curriculum, he asked on this page, “Are college and career skills really the same?”
It’s not that Lerman, an economist at American University, is against going to college. For Lerman, it’s about reducing youth unemployment and increasing economic mobility. Holding everyone to the same expectation of going to college, Lerman argues, reduces equality. “Over 20 percent youth joblessness, and still no apprenticeships?” he lamented last year.
Plenty of youth, Lerman argues, don’t want to be on the college track and won’t finish if they go; if they enjoy producing things, they’d be better served learning a trade, where they’ll have a shot at economic mobility and pride in their work.
Last summer, Lerman and Australian apprenticeship expert Nicholas Wyman told us about South Carolina’s secret sauce to closing the youth skills gap. Through a partnership among government, employers and educators, Apprenticeship South Carolina has expanded their program to 700 companies. Apprenticeships are cost-effective for government, and for companies, they represent a long-term investment in their future leadership.
With the number of total apprenticeships nationwide going down, Making Sen$e wanted to see what South Carolina was doing differently. Paul Solman traveled to Spartanburg, South Carolina, to BMW’s only American plant — apprenticeships, it turns out, are another product of German engineering – and Lerman came along. Watch that broadcast story below and read more of Paul’s conversation with Lerman about why America should be taking a lesson from the rest of the world and investing in apprenticeships.
— Simone Pathe, Making Sen$e Editor
So you’ve been hocking me about this for years. Why?
Well, you can see how great the opportunities are for lots of young people, and for the companies.
You were telling me in the car you’ve been thinking about how to get people into the job market since the Carter administration. I’m not trying to out you here as to how old we are.
Well, I worked on the youth Employment Demonstration Project Act in 1977, in the Carter administration, yes. I’ve worked on youth programs since 1977.
I was concerned especially about black youth unemployment, which at the time was 45 percent. And I thought it was a waste for young people not to have job opportunities.
We interviewed Northeastern University’s Andy Sum, who’s shown that if you count 16-19 year-old African-American male high school dropouts from poor families, their employment rate is 5 percent.
Wow. Yeah. I didn’t realize it was quite that low. But that is a subset. The vast majority of 16-19 year-olds are in school. And only a modest portion, something like 12, 13 percent are neither in school nor at work.
So is this apprenticeship program the most promising thing you’ve seen since the 1970s?
It’s the most promising thing I’ve seen for the broad problem of youth that are not succeeding in a four-year college. It’s important not only for young people, but for people in their 20s who otherwise are going to pursue jobs that have weak wage growth.
If any. And so, the goal is to reduce inequality by enhancing productivity of people in the range of the 30th to 60th percentiles of academic capabilities.
It’s a way of helping people who might get a B-, C+ in high school, but then get turned on. They’re motivated, they are applying what they learn, they’re becoming an expert in a certain field, which raises their productivity, which can raise their wages. And it’s a virtuous circle.
The status question
But shouldn’t everybody go to college?
No. No one should be deprived of the right to go if they have the capabilities and the interest, but I think it’s the wrong question to ask.
The right question to ask is: Are there good opportunities for people who don’t want to pursue, or who are not particularly good at pursuing, a four-year college track.
But this is the land of opportunity. In the 21st century, doesn’t improving your lot mean increasing your human capital, which is done by becoming more sophisticated and more knowledgeable by going to college?
Well, I agreed with you until you got to the last step. Becoming more knowledgeable and sophisticated can be done in a variety of ways. And what you see in terms of opportunities for people who go through apprenticeships, especially in countries that have robust systems, is the opportunity to move up — to become a supervisor, to start your own business.
Channeling everyone into an academic track is a disservice to people who learn much better in a hands-on way. We’re underplaying the role of other types of skills beyond what you learn in college. Second, we’re disadvantaging those people who learn best by doing and applying what they learn soon after they learn it.
Would you have your kids go into an apprenticeship program?
Sure. My daughter, when she graduated college, she called me up one day and said, “Dad, I want to learn a craft.” And she wanted to learn book binding. But if she wanted to learn a viable craft, more power to her.
Before going to college?
Well, I would say that even before going to college, yes. I think she probably would have gotten more out of college had she done it before. She might have learned other things afterwards, but yes, she was on a college track.
That’s what I mean – the vast majority of the people watching our broadcast, their kids or their grandkids now, or their great grandkids are probably on a college track. And I think they’re going to say, “Well, for other people, but not for our kids.” That’s why I’m asking: For your kids? My kids?
Yes, for my kids. I know many families, upper middle class families, who say: Well, my son really didn’t want to go directly to college. He started and didn’t like it that much. It was a chore for him. So even among middle class and upper middle class families, there’s a diversity of people, some of whom prefer much more of a hands on learning opportunity.
One of the reasons parents and policy makers say you need to go to college is because we have a very weak structure of occupational competencies leading to wonderful careers outside the college stream.
We don’t have the kind of robust training and apprenticeship system that other countries have had for hundreds of years – and other countries are growing in recent years. We’re the exception.
Why are we the exception?
I think we’re the exception for two reasons. One is misperceptions about what apprenticeship is and can be. Some have no perception at all of what apprenticeships are.
The second is a view that sameness is equality somehow, that putting everybody through the same thing is a way of achieving equality and that unless you allow everybody go to college for four years, you are reducing equality. People are very uncomfortable saying that my child will go to college, but your child might not go to college. And as a result, we pour hundreds of billions of dollars into this effort, tens of billions in the Pell Grant Program alone, where there is a lot of failure. We’re trying to get more and more people to start college, but they don’t finish.
Yeah, only about half or less of the people who start…
And those who go to career-based community colleges, two-year colleges or career colleges, the rate of completion is on the order of 15-20 percent, especially those that get financial aid. So we’re pushing a system that is failing very large numbers of people.
And then there are people who don’t even start college. And what are their options? They’re not very good. So why not have a system that helps companies increase their productivity, allows them to pay higher wages, and becomes more satisfying as people learn to master a particular skill that you and I don’t know?
There are robotic welders that are tremendous at it. I wouldn’t have the first clue about how to do that. But they can take pride in being an outstanding person in that field.
Yes, but compared to you, a professor from American University, they have much lower status, right? Isn’t status absolutely vital to feelings of self-worth?
Well, it depends. Remember, many of these people are being trained to be the future leaders of these companies, and over time, that one level of expertise will morph into further expertise.
Now yes, people will ask them, what’s a robotic welder? How do you do it? Some people will say, hey, that’s cool: You’re actually making something; I’m pushing paper around all day.
We had a person that was fixing up our deck. He went into carpentry after working in business and had a master’s in business. He loved to make something happen, rather than sit around in a desk all day.
But the status distinction in this country still revolves around college, whether and where you went, right?
It’s not in every place and it’s not among all social economic groups. And as a result, many of those social economic groups that we worry about are being harmed in terms of their occupational mobility and their earnings and their job satisfaction.
So if apprenticeships are so great, and I’m finally doing the story you’ve been wanting me to do, why are the numbers going down?
The numbers are going down in our registered apprenticeship system because we haven’t really tried to build a solid apprenticeship system.
But the president is talking about it. There’s political dialogue about it.
Well, now there’s a turn around. But up until now, the budget for the Office of Apprenticeship, which promotes apprenticeship, was on the order of $25 or 26 million. If we spent what the British government is spending, based on our population, we would be spending $7.5 billion. Now, $7.5 billion might sound like a lot, but we spend $37 billion on Pell Grants alone. Much of that is for people going into career-based programs that don’t succeed nearly as well as apprenticeships.
Apprenticeships are cost effective for the government, but for some reason, up until recently, government officials have not wanted to invest in apprenticeship.
One reason is the narrow view of what skills are – viewed entirely through a college framework. Another reason is that people view apprenticeships as a union activity and some companies want to avoid that.
Here at BMW’s U.S. plant, they don’t call it the apprenticeship program. They call it the “Scholars Program” because they do not want to be identified with union apprenticeship or apprenticeship as it has traditionally been thought of?
Yes, that’s true that here they use the term “scholar” instead of “apprentice,” but in the rest of South Carolina, where apprenticeship is going up rapidly, they do use the word “apprentice” and it’s not a negative term to most companies once they learn about it.
Werner Eikenbusch, BMW’s head of workforce development for the Americas, told us that the program requires an investment on the part of government, of course, but also an investment on the part of companies, which means thinking long-term. I’ve heard a constant criticism that companies think short-term and that the loyalty between worker and company is broken both ways.
That’s an overstatement. A lot of companies are interested in doing something, but they think that community colleges or high schools are going to do it for them. And they’re learning that those are imperfect solutions.
Now, it is true that you will always have companies that will think short-term and will not invest in workers. But you don’t need every company to offer an apprenticeship. Once you see companies succeeding with their apprenticeship program, the word spreads. So, in South Carolina, for example, CVS Pharmacy started an apprenticeship program, and now Walgreen’s wants to mimic it.
Yes, we can do some things at the industry level, but in the end, it’s the individual company that invests or doesn’t invest.
You could have asked the same question about Britain: why if apprenticeships are so great, and the British are closer to the Germans than we are, how come they didn’t have apprenticeship program earlier?
They did not know how to structure an apprenticeship system. In the last six or seven years, they’ve gone from 150,000 apprentices to 850,000, of which probably 500,000 to 600,000 are quite good quality apprenticeships. So that would mean that we would be going from 300,000 to 400,000…
Which is what we have now.
To 2.5 million, or to 2 million. That would reduce government spending for post-secondary education because apprenticeships, from the government standpoint, are extremely cost effective. The government benefits from the lower cost of social welfare programs and unemployment insurance, lower cost for community colleges and four-year colleges; basically, lower waste in the system.
Can community colleges swing this?
And we have a community college system in place in this country that can do this?
The community college systems alone cannot do it. We should incentivize units within community colleges and career colleges to market apprenticeship to individual companies and be paid on a performance basis. So if they create more apprenticeships, they get additional resources.
Right now, the community colleges have no incentive to reform the system. If a student is in a technical program and only takes part of his program at the community college and learns part of it at the workplace, they have fewer student hours to teach and lower reimbursements.
Yes, it is an investment for companies, but they invest in equipment; they invest in computers. Those are long-term benefits that they’re counting on, so why not invest in people who are going to stay with you, who are going to be able to lead your company forward.
It’s different this time
It’s such a good pitch, and seems to be working so well here at BMW, but then, so why are the total number of apprentices down in this country?
Well, there are hundreds of German companies in the United States that know the apprenticeship system and its value for their companies. They are trying to start programs, usually with community colleges, but feel a bit alone because they’re not getting nearly enough American partners to help them structure a system.
Now that President Obama and several senators are pushing to expand the funding for apprenticeship, because we do need some funding, I believe we can turn the corner.
Yeah, but you’ve believed that for quite a while, haven’t you?
No, mostly I’ve complained that we haven’t invested to try to turn the corner. Mostly when anyone asks me, “Why don’t we have a good system?” I say, “Because we haven’t tried.” Now we’re going to begin to try – I hope.
South Carolina’s secret
And it is growing in South Carolina. Why?
South Carolina was very clever in placing the apprenticeship system within the technical college system. And they partnered with the state Chamber of Commerce to get a budget for that unit, as well as a tax credit for $1,000 per apprentice per year for the companies.
Branded as “Apprenticeship Carolina,” the program has had a great website; They hired people who really could talk to business people, who knew how to do sales work, who solved problems from the business person’s standpoint, who knew that the business people didn’t want to do a lot of paperwork, didn’t want to have lots of regulation. They would handle all that for the business people. And they were successful going company-by-company, to the point where they’re creating a new program a week. They went from 90 companies in 2007 to about 700 companies today over a period when employment was going through the floor.