Democratic presidential candidate Hillary Clinton is expected to call for tax credits for businesses that hire and train apprentices as a means to both raise wages and boost youth employment. Her proposal, which calls for a $1,500 tax credit per apprentice, is expected during a forum at Trident Technical College, a two-year community college in the Charleston area, according to campaign aides.
Clinton’s campaign, in a background policy document, says Clinton considers the apprenticeship proposal to be a “win-win” mechanism for businesses that need skilled employees and workers in need of well-paying jobs. The campaign cites a 2012 study cited by the Department of Labor, which found workers who had completed apprenticeships typically earn an average of $6,595 more annually than other workers.
Interestingly, Clinton’s proposal would build off a bipartisan bill introduced in the U.S. Senate last year that proposed granting businesses a $1,500 tax credit for hiring an apprentice under the age of 25, and a $1,000 tax credit for hiring an apprentice 25 or older, her campaign aides say. The Leveraging and Energizing America’s Apprenticeship Programs Act, introduced last year by Senators Cory Booker, (D-NJ) and Tim Scott (R-SC), was an effort to encourage companies to take on younger apprentices. Backers of the Senate bill, which did not pass, have said it would create about 400,000 positions and help meet a demand for skilled U.S. labor.
“Many employers explain the reason for their unfilled jobs as a lack of available trained workers,” a release from Scott and Booker in 2014 explained, CNN reports. “Apprenticeships are a proven way to help people develop in-demand skills and to meet the needs of employers, yet they compose just 0.2 percent of the nation’s workforce.”
Although the national unemployment rate has fallen from 10 percent to 5.5 percent since the country entered recession in 2008, youth unemployment has remained high. Indeed, according to the Bureau of Labor Statistics, the unemployment rate for adults age 34 or younger was 7.8 percent in May 2015. Among young African-American adults, the unemployment rate is 14.6 percent. Furthermore, millennials—people between the ages of 18 and 34—will become the nation’s largest living generation this year, according to research from Pew Research.
Clinton’s proposal reminds me of other apprenticeship initiatives. For example, last fall, the Department of Labor kicked off a $100 Million American Apprenticeships Grant Competition to launch new apprenticeship models in high-growth fields such as advanced manufacturing, align apprenticeships with pathways for further learning and career advancement, and scale apprenticeship models that work. Advanced Manufacturing Partnership members Dow, Alcoa and Siemens have already begun new apprenticeship pilots of their own, and also developed a “how-to” guide for other employers looking to use apprenticeship as a proven training strategy, a White House statement explained.
Jim Wall, executive director of the National Institute for Metalworking Skills, said in a U.S. News & World Report article at the time that reinvestment in apprenticeship programs, which were much more common for manufacturers decades ago, is particularly exciting for the industry.
“With an apprenticeship program that’s done right there through the company, that’s where the rubber meets the road … people are employed, they’re working through that company,” Wall said in the article. “It’s not like what I call in higher education the ‘pay-and-pray’ model, where you pay your tuition and pray you get a job at the other end. With an apprenticeship program, there’s a guaranteed return.”
Considering both high unemployment among young people and a manufacturing skills gap, it would seem apprenticeships could go a long way toward solving two key issues. But what are your thoughts? Do you think tax credits for businesses hiring apprentices will make the practice more appealing?