Jun 14, 2017

Trump apprenticeship push won't come with more cash

Introducing a Trump Administration effort to expand what it called much-needed apprenticeship programs, Labor Secretary R. Alexander Acosta said corporate America and higher-education institutions will train students at "the skills necessary to enter the workforce." But the administration doesn't plan to increase funding for the expansion.

Trump the cheerleader: Acosta, calling it "our program," said funding will be left at $90 million, the sum secured by the Obama Administration. The main federal role will be to encourage corporate America to continue supporting and using these programs to fill a growing number of unfilled jobs.

So what's the $90 million for? A drop in the bucket relative to overall education spending, the funds are distributed to states as seed costs for apprenticeship networks that connect employers with community colleges.

Local schools and the companies themselves do the vast majority of the work to set up the apprenticeship programs. South Carolina's apprenticeship network is one of the more successful in the country. It was launched at the suggestion of the state Chamber of Commerce, reflecting the business community's recognition of a dearth of qualified workers.

  • The growth in popularity of the apprenticeship began long before the Obama Administration rolled out its initiative last year, and remain below levels 15 years ago, when government concern over a skills gap was less intense. When corporations are facing tight labor markets, such as now, it pays to invest in apprenticeships; when unemployment is high, it does not.

Data: Department of Labor; Chart: Andrew Witherspoon / Axios

Why aren't more businesses on board? Susan Helper, former chief economist at the U.S. Department of Commerce, tells Axios that a major hurdle is corporate America's culture of measuring performance by statistics that don't paint a full picture. When companies can be convinced to measure their apprenticeship programs, they have found the return on investment to be upwards of 50%, according to a study by Case Western Reserve University.

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