A recent survey of American manufacturing executives found optimism about their companies’ futures at its lowest point since mid-2020, amid concerns about burdensome federal regulations and domestic economic uncertainty. Even so, perhaps paradoxically, manufacturing execs told pollsters that their greatest challenge right now is hiring and retaining workers. Despite a slowing economy, these business leaders worried that they couldn’t find enough skilled, trained employees.
The numbers are startling. The Labor Department estimates that at least 750,000 jobs are unfilled at industrial firms. One recent study calculated that open industrial positions could climb above 2 million by 2030. Construction firms face similar prospects. On top of normal hiring just to replace workers who leave the industry, firms need to fill about 600,000 positions. Pay isn’t the problem. Trained carpenters earn a median annual salary of $55,000; steelworkers take home more than $61,000. Graduates of manufacturing-apprentice programs typically begin employment at more than $50,000 annually, with some apprentices hired for as much as $75,000 annually.
Those unfilled jobs represent squandered opportunity. While politicians and policymakers talk about bringing manufacturing jobs back to America in an era of rising overseas costs and international tensions, it’s not clear whether organizations can find enough workers to fill those positions. Underlying the problem: a misguided emphasis on college-for-all, declining academic performance in public schools, and the short shrift that school districts give to technical training.
Policymakers have long talked about expanding training programs, boosting funding to technical schools, and creating more joint ventures with businesses to train young people. Yet progress remains frustratingly slow, and the United States lags far behind other industrialized countries in producing job-ready trades employees. One startling example is the slow growth of apprenticeships, the chief model that many countries use to get students ready for such work. In the last 20 years, despite new programs introduced by several administrations, apprenticeships have grown only haltingly, Labor Department data show. In that time, the number of trainees in apprenticeships has expanded to 593,690, from 386,511—a 53 percent gain. That might sound impressive, but over 20 years, it represents an annual average rate of growth of just over 2 percent. The percentage of apprenticeships relative to the workforce is a tiny 0.3 percent. In industrialized countries like Australia, Canada, Britain, and Germany, the rate is around 2 percent. At those levels, the U.S. would have more than 3 million apprenticeships.
Even these numbers mislead. The number of trainees finishing apprenticeships and joining the workforce remains below 100,000 annually, as only about 35 percent of those entering these programs complete them. One reason is the declining success of American public schools in graduating high schoolers with basic skills at a time when blue-collar jobs in manufacturing, construction, and areas like auto repair are increasingly sophisticated. Reading scores hit an all-time low in the school year that ended June 2023, a sobering reminder of the inadequacies of many public schools and the challenges that their graduates will face in getting training. Even worse is the disturbing trend of school systems lowering standards for graduation, or canceling proficiency exams and otherwise manipulating graduation rates, instead of improving instruction. The high drop-out rate is also a result of an “academic only” training model in some places that doesn’t involve cooperation with businesses, thus failing to engage students, some critics maintain.
The Trump administration tried to tackle that problem by emphasizing ventures between employers and schools, such as community-college associate-degree programs that provide the classroom learning that apprentices need, while they also earn credits working for potential employers. To help in that drive, the administration created the National Council of the American Worker, enlisting companies like Walmart, Home Depot, and Lockheed to establish and expand training programs. Trump and administration representatives also met with CEOs of American subsidiaries of European companies like Siemens to expand apprentice initiatives in the United States. In Trump’s four years in office, the number of apprenticeships grew by 23 percent, an average annual growth rate of nearly 6 percent—a much more robust pace than during the Obama or Bush administration.
The politics have since changed, however. The Biden administration says that it is committed to apprenticeships, too, but it’s focusing efforts on political allies like trade unions. The administration has written into federal legislation tax credits for businesses that create apprentice programs on government projects, but the legislation contains numerous requirements that companies must adhere to, such as prevailing wage mandates and project labor agreements, which raise the cost of employment and favor unionized firms. But organized labor represents an increasingly smaller portion of the workforce. In industries like construction, where the unions themselves often run training programs that dictate hiring, organized labor also doesn’t have a great track record of expanding job opportunities. One study in Boston, for instance, determined that nonunion construction firms were more likely to hire and train minority workers than were unionized businesses.
What happens in national elections will matter. A bipartisan coalition of Democrats and Republicans has introduced a bill, the National Apprenticeship Act of 2023, that would appropriate $400 million in 2025, growing to $800 million in 2029, to finance apprentice and other technical training programs. But with a mounting federal deficit and a recent downgrade of U.S credit, the bill faces resistance. Rather than tap current federal funds, Republican senator Tom Cotton has offered a more radical proposal: taxing university endowments that exceed $2.5 billion and funneling that money into workforce-training and apprenticeship grants. The legislation, based on Cotton’s contention that federal funding has been “propping up” colleges, while Americans who don’t attend college are “left behind,” would offer various ways to finance training for non-college students, including vouchers. But Cotton’s bill has yet to get a hearing in a Democrat-controlled Senate.
The number of unfilled trade jobs is rising even as Americans are starting to “fall out of love with college.” The percentage of Americans who say that “preparing for college” should be a top priority of K–12 education has been plunging. No wonder, considering that about 45 million Americans carry college debt and some 40 percent of college graduates are underemployed. Yet progressives like Bernie Sanders continue to propose free college for everyone, and school districts are slow to redirect funds to trade programs. The cooperation between industry and schools that characterizes European apprenticeships remains relatively rare here.
It all amounts to a massive wasted opportunity.
Photo: monkeybusinessimages/iStock
