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Obama announces $600M to support apprenticeships and job training

The President follows Senators Booker and Scott in recommending federal funding to support vocational training programs to close the skills gap.

Before apprenticeships can help narrow the country’s growing skills gap, Americans will have to bridge a much deeper cultural divide: a deep-seated bias toward college.

“Millions of parents and kids see apprenticeships and really valuable on-the-job learning opportunities as vocational consolation prizes best suited for those who are not cut out for a 4-year degree,” said Mike Rowe, host of the Discovery Channel’s “Dirty Jobs” series in testimony before the U.S. Senate Commerce Committee.

New federal initiatives from the White House and Capitol Hill are challenging that perception. Yesterday the White House announced $600 million in grant programs to support job-driven training programs like apprenticeships.

A $500 million competition will award grants to community colleges that partner with businesses to provide collaborative job training programs that can be expanded on a national scale.

To increase apprenticeship programs, a second competition will provide $100 million for American Apprenticeship Grants in high-growth fields such as information technology, high-tech services, healthcare, and advanced manufacturing. According to the White House, 87 percent of apprentices are employed after completing their programs, and earn an average starting wage over $50,000.

“It’s never been more important for our folks to be trained for the jobs that are there — and for the jobs of the future,” said President Obama. Because the grants use existing federal funds, the President can bypass Congress to launch the new programs. Regardless, Capitol Hill has its own apprenticeship ambassadors: U.S. Senators Cory Booker (D-NJ) and Tim Scott (R-SC) introduced their own bi-partisan bill last week. The Leveraging and Energizing America’s Apprenticeship Programs (LEAP) Act would provide a tax credit to encourage more American employers to offer registered apprenticeships. “Our competitiveness and economic strength depend upon our commitment to developing a 21st century workforce,” said Senator Booker.

To address the growing problem of youth unemployment, which costs federal and state governments over $25 billion annually, the bill will offer a $1,500 tax credit for apprentices under 25, and a $1,000 tax credit for apprentices ages 26 and up. Individuals who complete registered apprenticeship programs earn about $250,000 more over the course of their careers.

Although about 10 million Americans are still unemployed, some 4 million job openings are going unfilled, according to the U.S. Labor Department. With the cost of college skyrocketing — it’s now 500% more expensive to enroll in college than it was in 1985 – apprenticeships may be a more viable way to train people for middle-skill jobs.

Yet, the U.S. had just over 350,000 registered apprentices in 2012 – or about 0.2 percent of the nation’s workforce. By 2020, the country will face an expected shortage of 3 million workers with associate degrees or higher and 5 million workers with certificates or credentials. About 45 percent of American jobs in the next decade will be in middle-skill occupations that require more knowledge than a high school diploma, but less than a four–year college degree, reports the Brookings Institution

Similar to Obama’s plan to create local programs that can be expanded on a national level, the LEAP Act is modeled on a successful apprenticeship program in Senator Scott’s home state of South Carolina.

Rather than making training and education an either-or choice, South Carolina’s Apprenticeship Carolina (AC) programs offer three components: on-the-job learning, technical training at a community college or trade school, and a scalable wage progression as students learn more and more skills.

In rural Pickens County, where many textile plants have closed, the K-12 school district further reinforces the pairing of education and hands-on learning at its Career & Technical Center, which offers access to machine tools, computers, robotic systems, and other modern workplace equipment, according to a PBS Newshour report. Grades matter for students who want to join the center’s ‘Technician Scholar’ program: entrance is by application only.

The state’s apprenticeship program also includes highly praised collaboration between schools and businesses on what skills make students successful in a wide range of industries. In Pickens County, for example, local business managers give talks to classrooms and mentor students. To incentivize participation, the state government offers a $1,000 tax credit per apprentice to participating businesses, and free training on how to set up a registered apprenticeship program.

As a result, South Carolina has increased its number of apprentices from about 700 in 2007 to over 9,000 today, with an over 600 percent increase in registered apprenticeship programs in the state. As apprenticeships have grown, so has the state’s employment rate: At the end of 2013, more South Carolina residents were employed than at any other time in the state’s history, reports the state’s Department of Employment and Workforce.

The South Carolina program  has also received positive attention from the White House, and perhaps with good reason. If future programs created by White House grants or LEAP Act tax credits follow South Carolina’s example of merging on-the-job-training with continuing education, it may serve as a blueprint to reduce national unemployment.

Lisa Wirthman writes about business, women, & social good. She contributes to Slate, Forbes, and other publications and writes a column for the Denver Post. Follow her on Twitter @lisawirthman.

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