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Nicholas Wyman

Management

Four Things President Biden Can Do to Expand Apprenticeships

As the pandemic continues to affect millions of jobs, getting people into apprenticeships has never been more vital

Published: Wednesday, February 24, 2021 - 12:02

It’s a new year, with a new president and new opportunities to boost modern apprenticeship programs in the United States that can help get people back to work and stimulate the economy.

Getting people into apprenticeships has never been more vital, as job losses caused by the pandemic continue to affect millions. Young people in particular have been hit hard, as they’re most likely to be employed in retail and hospitality, two sectors essentially shut down during the Covid-19 crisis. Speed is vital. We can’t risk losing an entire youth cohort to sustained joblessness that could affect their entire lives. Funding new apprenticeships not only provides jobs now, but also generates high, long-run gains in skills, productivity, and earnings for young workers and companies.

Luckily, there are proven strategies for creating apprenticeships and getting young people employed. We just need to look abroad: Australia and the United Kingdom have strong apprenticeship programs and moved quickly to protect apprenticeships when pandemic-related job losses hit last summer. Their experience highlights four strategies that could be adopted by the Biden Administration and funded through the next stimulus program.

No. 1: Directly subsidize apprenticeships

Australia’s Boosting Apprenticeship Commencements Program created 100,000 new registered apprenticeship and traineeship positions. The program subsidizes an unprecedented 50 percent of a new apprentice’s wages—up to AU$7,000 (about $5,320) per quarter—for 12 months and is available to employers of all sizes. Preliminary government figures show that during the first three months following the program’s announcement, nearly 74,000 new apprenticeships were registered in Australia. Scaled to the U.S. workforce, the initiative could yield well over 750,000 new apprenticeships.

The Australian government also subsidized apprentices hired from July 1, 2019, in any of 10 occupations with skills shortages. The Additional Identified Skills Shortage Payment hands employers AU$2,000 at the start of the apprenticeship and the same at completion. Eligible apprentices can access income-contingent loans of up to AU$21,078 to support them during training.

No. 2: Convert part-time workers to apprentices

From Oct. 28, 2020, Australian employers could convert up to 30 casual or part-time employees to apprentices. Employers who had been reluctant to commit to three or four years of apprenticeship training rushed to take advantage of the subsidized program. 

These strategies are certainly a factor in new employment numbers in Australia, which project an increase of 4 percent from December 2020 to June 2021.

The UK government also strongly supports apprenticeship and had pledged to create three million new apprenticeships between 2015 and 2020.

But the Covid-19 crisis hit UK apprenticeships hard. In May 2020, the total number of people starting an apprenticeship in Britain was down 60 percent from the previous year. Higher-level (or degree) apprenticeship starts also dropped, by 28 percent. The worst hit were people younger than 19 just beginning their apprenticeships.

No. 3: Make apprenticeship programs more flexible

The UK government responded by relaxing regulations on apprenticeships so they could continue during the pandemic. Specifically, the government allowed:
• Virtual and remote learning and assessment wherever possible
• Temporary breaks in training due to personal incapacity, caring duties, or other Covid-related issues

These changes are expected to continue into 2021.

No. 4: Fund new job placements for at-risk young people

The UK government is also funding new job placements for people ages 16 to 24 who are at risk of long-term unemployment—effectively a pre-apprenticeship or employment readiness program for this population.

Employers who hire at least 30 people can avail themselves of this Kickstart Scheme, which covers 100 percent of the minimum wage and a portion of the employer’s health insurance contributions for each eligible employee for up to six months. Employers can connect with a local authority, charity, or trade body for help in applying, and get reimbursed for application costs (£1,500 per applicant, about $2,035).

Opportunities at home

As of December 2020, America’s youth unemployment rate is 12.5 percent and is still trending more than 4 percent above pre-pandemic levels.

The incoming Biden Administration can exert a direct impact on jobs and skills by devoting a tiny share (say, 0.4 percent, amounting to $7.6 billion) of its $1.9 trillion stimulus proposal to policies to expand apprenticeships and other jobs for youth, similar to what Australia and the UK have already put in place, including:
• Direct subsidies for new apprenticeships
• Support for new apprenticeship opportunities when employers convert part-time and casual workers to apprenticeships
• Sustain existing apprenticeships by facilitating remote learning and assessment
• Subsidize jobs for young people during the pandemic

By acting forcefully now with proven strategies, the new administration can avert a youth employment crisis while building skills that lay the groundwork for enhancing careers and increasing productivity for the nation’s economy.

Discuss

About The Author

Nicholas Wyman’s picture

Nicholas Wyman

Nicholas Wyman is a workforce development and skills expert, CEO of the Institute for Workplace Skills and Innovation, and a multi-award winning author. He was Australian Apprentice of the Year in 1988 and went on to captain Australia’s gold medal-winning Culinary Youth Team. Today, he is a leader in developing skills-building, mentorship and apprenticeship programs that close the gap between education and careers around the world. He is a regular contributor to Forbes Magazine, and also writes for Huffington Post and CNBC. He has an MBA and has studied at Harvard Business School and the Kennedy School of Government and was awarded a Churchill Fellowship in 2012.