In the wake of our recent Labor Day celebration, generally symbolizing the unofficial end of summer, I am still thinking about the impact labor has on all of us. While reflecting back on the origins of Labor Day is important, it also should serves as a reminder to us about what the future of our workforce looks like. The principles upon which Labor Day were founded are still relevant today and will be essential building blocks for the jobs of tomorrow.
As you are all aware, having followed these blogs, I spend my full-time job focused on ensuring work opportunities for the men and women of our state. I am always remind that a workforce that is employed, and in particular a skilled workforce, is critical to powering economic growth and to ensuring that New Jersey workers and businesses stay competitive in a global economy. You can almost think of an employed workforce as a sort of “economic insurance policy” that continues to pay dividends to families and the nation’s economy.
With that in mind, I have introduced a few measures that build on the success of apprenticeship programs in New Jersey and across the nation. These proposals will help employers find and develop a skilled workforce, and allow workers to earn a paycheck while receiving hands-on job training. There is no partisan bent to these ideas, as my friend and colleague, Assemblywoman Maria Rodriguez-Gregg (R-Marlton) was recently recognized by the White House for her similar efforts to expand these type of programs.
The first proposal dedicates funding from the State’s Workforce Development Partnership Fund to the Department of Labor and Workforce Development, which shall disperse those funds to One Stop Career Centers for the promotion of apprenticeships and apprenticeship programs accredited and approved by the United States Department of Labor in the State. It requires that at least 5% of the 25% of training funds dedicated for displaced workers be reserved for the promotion of apprenticeships and apprenticeship programs.
The second measure provides businesses with a credit against the corporation business tax or the gross income tax for each employee of the business employed pursuant to an apprenticeship registered with the United States Department of Labor (DOL). The bill gives businesses a credit of $1,500 for each apprentice who is 25 years of age or under, and in an amount of $1,000 for each apprentice who is 26 years of age or older, and who is employed for 12 months of the taxable year for work performed primarily in this State that is directly related to the apprentice’s training. An employer may take the credit for a particular apprentice for a maximum of five taxable years of the apprentice’s employment.
One of the major challenges I have seen with developing this idea is less to do with how it is written, but rather with the mindset surrounding apprenticeship programs in general. Too often, there is this notion that apprenticeship programs are somehow less than attractive education/workforce development routes for individuals to undertake. Some view them as a poor alternative to a college education in the preparation for one’s vocation in life. It’s partially a public relations problem.
There is a formal registered apprenticeship program (created by the National Apprenticeship Act in 1937), which the Department of Labor oversees. In 2012, there were 358,000 active registered apprentices in the United States. That number represents only seven percent of the same number of apprentices in England, for example, when adjusting for population. (Other European countries, including Germany and Switzerland, are particularly adept at maintaining a strong apprenticeship program.) And, this is not a zero sum game, where you have one group (college graduates) as the winners and the rest as losers. Extensive studies, both domestic and international, have conclusively demonstrated the numerous positive benefits of an apprenticeship program, which should be particularly compelling for millennials. Here are a few to consider:
It’s a real job. Unlike internships that frequently pay no money or possibly a minimum wage, apprenticeships actually fit the term, “earn while you learn.” While rates vary, most apprentices earn 50 to 60 percent of the rate they will eventually earn. When you consider that the millennial unemployment rate is at least double of the national average, it’s an even more compelling reason.
Apprentices earn more. The average starting pay for an apprentice is $50,000. Over a working lifetime, a trained apprentice will boost lifetime earnings to $240,037 when compared with someone seeking the same job without the same training. (If you include nonwage benefits, it jumps to $301,533.)
Bye Bye Debt. The average college student in America graduates with a debt that is north of $25,000. In many cases apprentices, who complete a program, have little to zero debt. They also can qualify for college credit hours that equate to an associate degree, which jump starts them to a four-year or graduate degree later in life. The New Jersey Pathways Leading Apprentices to a College Education Program (NJ PLACE) is a prime example of one such initiative.
Joining the middle class earlier. Forty percent of students seeking a bachelor’s degree do not graduate within six years at that institution, according to the Center for American Progress’ Sarah Ayers Steinberg. They leave college with debt and no degree. An apprenticeship program is the building bridge to almost immediate income and a chance to enter the middle class, without shouldering a knapsack of debt.
It’s the economy. It really is. Employers who hire apprentices add skilled workers, reduce turnover and improve productivity, thus stimulating the economy in a positive way.
My proposals not only facilitate a direct investment into career development for the next generation of our state's workforce through apprenticeship programs, but also help New Jersey small businesses to find and train the workforce they need to meet economic demand. To highlight the importance of apprenticeship programs, the United States Department of Labor recently announced the creation of National Apprenticeship Week beginning November 2nd. During the week, employers with apprenticeship programs will be highlighting the benefits of these programs through open houses targeted at workers who are interested in possible apprenticeships. The jobs of tomorrow will require a different set of skills, which is why a strong, dynamic and skilled workforce, many coming from established apprenticeship programs, is one of the critical components to middle class prosperity. That’s my take, what’s yours?