Editor’s note: This post is co-authored by Secretary Perez and National Economic Council Director Jeff Zients. It has been cross-posted from the White House blog – view the original here.
To create new opportunities for more hardworking Americans, the president and his team are committed to advancing job-driven training initiatives that help American workers acquire the skills they need to succeed in good jobs that are available now. Expanding quality apprenticeship is a key strategy to make education and training programs more job-driven.
As part of that effort, today, we hosted the first-ever White House Summit on American Apprenticeship to gather the best ideas and to catalyze action to dramatically increase apprenticeship in America. More than 60 attendees presented their ideas — including leading employers, big and small, like IBM, Bank of America, Blue Cross/Blue Shield and Oberg Industries; labor unions like the IBEW and SEIU; training providers like Ivy Tech and Lone Star Community Colleges; and local workforce leaders from states as diverse as Pennsylvania and South Carolina.
Hands-on apprenticeships, where workers earn and learn at the same time, are a proven path to good, secure middle-class jobs. In fact, 87 percent of apprentices are employed after completing their programs, with an average starting wage above $50,000. And apprentices earn a significant premium for their skills — as much as $300,000 more than their peers over a lifetime, according to some studies.
And employers benefit as well. Given a potential shortage of 1.6 million middle-skill workers by 2020, according to the McKinsey Global Institute, we need more apprenticeships that allow companies to develop a skilled workforce that can drive improvements to their bottom lines. Ninety-eight percent of employers with apprenticeship programs today would recommend apprenticeship to other employers. And the return on investment is impressive — studies from across the globe suggest 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.
But with only 375,000 apprentices in programs at the beginning of this year, we’re falling well short of our potential — especially compared to some of our global competitors. We would need more than six times as many new apprentices to be on the same per capita level as Great Britain. It would take a 16-fold increase for us to be in a league with Germany. And with women and African-Americans comprising only 6 percent and 10 percent of our apprentices, respectively, we are clearly not tapping the full extent and diversity of the nation’s talent.
We’re committed to turning that around. This fall, the president will make available $100 million in American Apprenticeship Grants to increase apprenticeship in high-growth fields; align apprenticeships with further learning and career advancement opportunities; and take successful apprenticeship models to scale. And the president continues to call on Congress to create a $2 billion training fund to help states and regions double the number of apprentices over five years.
And already, we are seeing results — there are now 10,000 more apprenticeships in America since January. Employers and unions ranging from Ford and UPS to the UAW and SEIU have pledged to add tens of thousands more. Community colleges are stepping up to link apprenticeships with college degrees. And across the country, states like South Carolina (which has already increased apprenticeships sevenfold), California, Minnesota, Michigan and more are using creative state programs to expand their apprenticeships.
Today’s White House Summit on American Apprenticeship is a testament to the powerful opportunity before us. Together, we can do more to expand this successful career pathway — helping workers punch their ticket to the middle class and helping business grow and expand.
Follow Secretary Perez on Twitter as @LaborSec.