President Barack Obama announced last week that the federal government will distribute $175 million in grants to create apprenticeship programs. Speaking at Macomb Community College in Warren, Mich., the President explained that the American Apprenticeship Grants, administered through the Department of Labor, were awarded to 46 public-private partnerships among employers, organized labor, non-profits, local governments and educational institutions to help create 34,000 apprenticeships.
As parents and students think about the escalating costs of attending college, the idea of an alternative path to a career that may not require high levels of student debt is gaining more traction. Typically, apprentices get paid while participating in a mix of on-the-job training and classroom-based learning, which often allows them to begin a decent paying career without first earning a college degree.
Hands-on apprenticeships provide a win-win situation for corporations and workers. According to federal research, 87 percent of apprentices are employed after completing their programs, with an average starting wage above $50,000. The return on investment for employers is also impressive. Studies show that for every dollar spent on apprenticeship, employers get an average of $1.47 back in increased productivity, reduced waste and greater front-line innovation.
The grantees to receive the American Apprenticeship Grants will hire new apprentices in high-growth and high-tech industries as diverse as health care, IT and advanced manufacturing over the next five years. However, a significant amount of that funding is tied to the advanced manufacturing sector, such as $2.2 million for a community-college-run consortium updating the skills of Tesla Motors and Panasonic workers, and $4 million to train mechatronics and industrial maintenance technicians and CNC Operators in Pennsylvania.
Among the other grants, $5 million will go to Los Rios Community College District in Sacramento, Calif., “to establish an apprenticeship model in Northern, Calif., where none currently exists,” and improve advanced manufacturing coursework at the college. Partners include Siemens USA and TriTool.
Another $5 million will go to the UAW-Labor Employment and Training Corp. in Cerritos, Calif., to fund a UAW apprenticeship initiative to train 500 job seekers and 975 current workers in advanced manufacturing jobs.
Macomb Community College will receive $3.9 million for 600 IT and manufacturing apprenticeships, including a new apprenticeship in digital sculpting for the automotive industry. Partners include Atlas Tool, Formtech and Autocam Precision Components Group.
The Milwaukee Area Workforce Investment Board will also receive $10 million to create a cross-section of apprenticeships, including in the manufacturing industry. Partners include General Motors and Emerson.
Considering both high unemployment among young people and a manufacturing skills gap, it would seem apprenticeships can go a long way toward solving two key issues. Interestingly, Democratic presidential candidate Hillary Clinton has called for tax credits for businesses that hire and train apprentices, as a means to both raise wages and boost youth employment. Her proposal calls for a $1,500 tax credit per apprentice, which would make apprenticeships even more appealing to businesses.
While federal grants and possible tax credits may entice businesses to create apprenticeship programs, one must wonder what young adults think. Do they believe apprenticeships are a good idea, or do they have a perception that apprenticeships are for trades and students who failed to go to college? If so, is that necessarily bad?
What are your thoughts on apprenticeships?