Skills Shortage

Apprenticeships could help Trump bring jobs to forgotten Americans

A.J. Scherman,Ryan Buzzy
You'll be taking my job some day so I might as well train you for it. Source: Picture Alliance

Pittsburgh. The stairwell looks like it’s been left to rot. Pipes and wires are exposed in the hallways. It’s hard to believe that Pittsburgh’s new Energy Innovation Center (EIC) is actually up and running. Then again, that’s the point: The center’s students are supposed to learn how to add the finishing touches. The EIC exemplifies a tradition in this former steel town of companies and colleges working together for the good of the community. Universities “have been and are central to the revival of the economy here,” says Jared Cohon, a former president of Carnegie-Mellon.

But Pittsburgh’s EIC was also inspired by Germany’s dual-education model, a form of apprenticeship where students go to vocational school, while also working in a related and paid job in a factory.

Such apprenticeship schemes are slowly but surely making a comeback in the United States, supported on both sides of the political aisle as a promising way to get students out of debt and out-of-luck workers into new jobs. In theory, companies, educators, state governments, Congress and the Trump administration should all work together, with their common goal to train skilled workers for the next generation.

Americans, more than Germans, remain wedded to the dream of going to college.

But in America’s polarized politics, apprenticeships have instead become yet another proxy war for the agendas of various competing lobbies. Trade unions see apprenticeships as their last hope of stemming the decline in unionization. Employers are wary of the cost of such programs. Teachers’ unions are leery of public money being diverted from schools to apprenticeships. Democrats expect apprenticeship programs to lift minorities out of poverty; Republicans talk of the “forgotten middle” of rural America. You get the idea.

Then there’s the cultural aspect. Americans, more than Germans, remain wedded to the dream of going to college. Parents struggle to see manufacturing and other skilled trades as a promising career for their children. “As a whole, Germans still value the ability to work with your hands and see that as a desirable skill,” says Anthony Ponder, dean of the STEM (science, technology, engineering and math) program of Sinclair Community College, which is pioneering an apprenticeship program with five companies in southern Ohio. “Success here was always defined as a four-year degree.”

But while college is certainly a goal worth striving for, it’s not for everyone. Only about one third of Americans actually complete a college degree. “So you’re basically saying to two thirds of Americans that ‘you’re a loser,’” says Joseph Fuller, co-head of Harvard Business School’s Managing the Future of Work Project. “The correct rallying cry should be ‘post-secondary for all,’ not college for all,” he adds. “But that doesn’t sound nearly as good.”

The political will is there. Donald Trump and his daughter, Ivanka Trump, held meetings with German CEOs during their first trip to Germany last year. Ms. Trump, who visited a Siemens plant to get a closer look, said she would take “many good ideas” back to the US. Mr. Trump then said that the word “apprentice” had a nice ring to it. In June, he signed an executive order directing the federal government to expand apprenticeships.

German Chancellor Angela Merkel L wispers with Ivanka Trump during a roundtable discussion on voca
What is it with Donald Trump and the word 'apprentice'? Source: Imago

Barack Obama made similar promises. He set up a German-American taskforce to explore worker retraining options and promised $90 million for apprenticeships in 2016. The idea was picked up and expanded by the Trump administration, which wants to invest about $200 million per year. On the German side, the new taskforce includes the education ministry; on the American side, it’s led by the Department of Labor. The group last met in December, and plans to meet again this month.

In Berlin, there’s a great deal of skepticism about whether anything will come of it – a “toothless tiger” is how one civil servant summed up the committee. Some of the Americans also have doubts. “The need is there, the desire is there, but it’s also another example of our political dysfunction at the moment,” says Mr. Cohon of Carnegie-Mellon, which was part of Obama’s committee.

And yet everyone agrees that more apprenticeships would be a good thing. University-bound students complain about accruing heaps of debt and about a lack of well-paid jobs when they finish their degrees. Companies complain about being forced to over-pay for hiring graduates for skilled trade jobs. Some of those hires could have been spared that college debt by going through a vocational training program instead.

About 500,000 Americans did some form of apprenticeship last year. About half were in the construction industry, another 95,000 in the US military. Compare that to more than 1.3 million who went through such programs in Germany last year – in a country with about one quarter the population. So there’s certainly plenty of potential: A study co-authored by Mr. Fuller of Harvard University identified about 3.2 million job openings in the US across 74 occupational sectors (see graphic) that could benefit from apprenticeships.

Germany has long traditions of apprenticeships and vocational schools, which already start at the high-school level. It’s one of many explanations for Germany’s export prowess, especially in manufacturing. Students are encouraged to move into skilled trades, and there’s less stigma surrounding blue-collar work.

02 The case for apprenticeships-01

Apprenticeship programs in the US are – surprise – often run by German companies. Volkswagen started an apprenticeship program five years ago at its plant in Chattanooga, Tennessee. It managed about 127 apprentices out of a workforce of around 2,500. Mercedes has a similar program, double the size. Altogether about 528 people are currently being educated according to the German education model. Often they’re supported by the German-American Chamber of Commerce. Pittsburgh’s GACC chapter is the only one that is sanctioned by the state.

With unemployment in the US at a 17-year low, and manufacturing becoming more and more of a high-tech world, companies across rural America complain about a lack of skilled workers to fill openings. “The number one topic that companies bring up today is access to talent,” says Mindy McLaughlin of Team NEO, an economic development group in northern Ohio. The companies that complain the least, she says, tend to be German subsidiaries that “find a way to make apprenticeships work in an American context.”

With little existing infrastructure or federal support, companies often have to develop their own programs, all the while with “a risk that other companies could take advantage of that,” said Marc McGrath, an American who heads up the US automotive division of German car parts supplier Schaeffler, which has been running an apprenticeship program in the US since the early 1980s. 

Mr. McGrath still thinks the risk is worth it. “Like anything, it’s in the details and your commitment,” he says. Shaeffler hires nearly 90 percent of its apprentices and retains close to 80 percent of them. In most cases, companies pick their own employees to rise from the shop floor to higher positions. Rewarding good work helps build loyalty and retention.

02 Annual expenditure on educational institutions-01

Many US rivals, by comparison, see apprenticeships as a luxury – one of the first things to go in a downturn – rather than something that can help them keep talent for the long haul. That may be short sighted, and is giving companies like Shaeffler a built-in advantage. “It is a secret to our success,” says Mr. McGrath.

A few American companies are trying to emulate the Germans. Goodyear is training 20-25 apprentices at one of its plants in Lawton, Oklahoma. It’s been “hugely successful,” says program director Kevin Henson.

And it’s not just about young college-bound students. An apprenticeship program by VEKA, a German maker of windows and door fixtures, is “age-independent” and has included military veterans and former policemen, according to Joe Peilert, North American president. He remembers one apprentice who previously did maintenance on F117 stealth aircraft. VEKA takes anyone “open-minded to try new things,” he says.

Others see an opportunity for rural Americans who have found themselves out of a job but have years of middle-management experience. Students coming out of university “won’t be ready to take on the jobs of baby boomers,” says Rebecca Lucore, head of corporate social responsibility in North America at Covestro, a spinoff of German chemicals firm Bayer. As a result, Covestro’s apprenticeship program has focused on “down on their luck” adults returning to the workforce. This German idea could yet help to solve what Mr. Trump calls “American carnage.”

Christopher Cermak is an editor with Handelsblatt Global in Berlin, recently back from a 3-month stint in the United States.  Marc Etzold and Tim Rahman of WirtschaftsWoche, a sister publication of Handelsblatt, contributed to this story. To contact the author: cermak@handelsblatt.com

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