Bloomberg News

Apprenticeship Good for Ben Franklin Closes Skills Gap

August 01, 2013

United Tool Apprentice Toby Wofford

United Tool apprentice Toby Wofford and the more than 7,800 other apprentices in South Carolina, and the $1,000 state tax credit they each bring to their employers, are among case studies the U.S. Department of Labor highlights in a report finalized in the last few weeks. Photographer: Jeff Green/Bloomberg

Toby Wofford learned his way around United Tool and Mold Inc. maintaining machines his last two years of high school in Easley, South Carolina. Now he’s graduating to an advanced apprenticeship program that includes free classes at a nearby technical college.

The United Tool apprenticeship is one of more than 500 such programs added in South Carolina since 2008. They range from certified nursing assistants in senior-care facilities to pharmacy technicians at CVS Caremark Corp. (CVS:US) These federally registered programs are part of an effort by states to adapt such on-the-job training to close a skills gap in technical jobs.

“It’s the best of both worlds,” 18-year-old Wofford said in an interview at the shop, which makes and repairs molds for plastic parts such as auto-fuel tanks. “You get the on-hand experience, but you also need the knowledge of education from college.”

The apprentice system, which helped founding fathers Benjamin Franklin become a printer and John Hancock learn silversmithing, faded in the U.S. during the next 200 years until it was concentrated primarily in construction trades, said Joseph Fuller, a senior lecturer at Harvard Business School in Boston who is studying work-training programs.

Wofford and the more than 7,800 other apprentices in South Carolina, and the $1,000 state tax credit they each bring to their employers for up to four years, are among case studies the U.S. Department of Labor highlights in a report finalized in the last few weeks. The report recommends outreach to schools, parents and businesses to rekindle interest in technical training.

Create Momentum

“There is quite a lot of interest in apprenticeship, and maybe that will create some momentum, because it’s clear there are categories of skills that employers find chronically hard to fill,” said Fuller.

Even with unemployment stalled above 7 percent for 55 straight months, the number of unfilled positions hovered at about 3.8 million in May, according to the U.S. Bureau of Labor Statistics. Job openings are about 20 percentage points below the levels at the start of the 18-month recession that ended in June 2009 on a normalized basis, compared with unemployment, which remains almost 70 percent higher.

Supplanting Apprenticeship

College has supplanted apprenticeship with most parents and students, not to mention with business owners, according to the findings of the report from a Labor Department advisory committee. Policy makers also don’t consider the option, the report concluded.

Last year, about 60 percent of the 358,000 federally registered apprentices were in jobs such as electrician, carpenter or plumber, according to Labor Department statistics. There are more than 21,000 programs nationwide, with 1,700 new ones established last year. The number of new apprentices is on an upward swing after declining during the construction slump.

Registered programs are required to have supervised, on-the-job training, job-related education and a scalable progression of wage increases for completing requirements, said John Gaal, director of training and workforce development for the Carpenters’ District Council of Greater St. Louis & Vicinity.

Health-care and information-technology groups are among professions gaining interest in apprenticeship, according to Gaal. “What we’re selling here are careers, not jobs,” he said. “These people are going to add value to the industry.”

Fastest-Growing Areas

In South Carolina, one of the fastest-growing areas for such programs, only about 10 percent of apprentices are in construction, said Brad Neese, director of the state’s Apprenticeship Carolina.

“Rather than trying to import workers from other states, we’re trying to grow our own,” he said. “Our goal isn’t really to help people get off unemployment. It’s to help companies grow.”

The state’s effort grew out of concerns about the skills gap and includes companies such as Michelin & Cie (ML), Duke Energy Corp. (DUK:US) and Kimberly-Clark Corp. (KMB:US)

South Carolina is one of eight states including Michigan, Connecticut and Rhode Island that give tax credits of as much as $1,500 for each registered apprentice, according to the Labor Department. Eight states give tuition support. Tennessee provides both.

The tax breaks help cut the cost of the apprenticeships that train both administrators and certified nurse assistants for Agape Senior, said Jimmie Williamson, chief human-capital officer for the South Carolina operator of assisted-living, rehabilitation, skilled-care and hospice sites.

Pay Increases

The 13-month certified nursing-assistant apprenticeship, which increases pay by about $2,000 a year, has helped improve retention among graduates to about 93 percent, compared with non-apprenticed employees who rarely last a year, he said. So far, about 200 employees have been apprenticed, he said. The company also has added a two-year program to train employees for administrative jobs, he said.

For Nancy Spires, 65, who spent 30 years in the grocery business including positions in management, the program helped her fulfill a life-long desire to work in health care.

“I used to read the Little Golden Wonder book ‘Nurse Nancy’ when I was a little girl, riding in a shopping cart with my mother,” said Spires. “Now I help the younger workers.” She joined Agape in 2007, entered the certified nursing assistant apprenticeship program in 2010 and now works in hospice care.

Less Traditional

In Wisconsin, which is among the top states for construction-trades apprenticeships, the focus is shifting to less traditional fields, said Reggie Newsom, the state’s secretary of the Department of Workforce Development.

“We’re trying to change the conversation,” he said. “These are not about dumb, dirty, dangerous jobs. This is a pathway to the middle class.”

In one of the more unusual adaptations, Wisconsin is using apprenticeships to try and halt the loss of smaller dairy farms, said Joe Tomandl III, program director for the Dairy Grazing Apprenticeship project. The state is losing 500 farms a year as farmers retire without successors or operations are sold, he said.

Gabby Rojas, 36, was paid partly in calves during her apprenticeship, so she now has 120 head of cattle for the new farm she’s operating with her husband. The program combined training with an experienced farmer, as well as college classes on topics such as business management and animal science, she said.

‘Fantastic Opportunity’

“It sounded like a fantastic opportunity,” said Rojas, who said she regretted she couldn’t afford to take over her father’s farm when he retired. “Now I have my foot in the door.”

Duplicating the success of South Carolina, Wisconsin and other states may be difficult, said Robert Lerman, an economics professor at American University in Washington who has written several papers on apprenticeships.

The U.S. offers no federal tax credits or tuition support, and the $28 million budget of the Department of Labor’s apprenticeship office isn’t enough when compared to billions spent on other types of training, Lerman said.

In contrast, in Germany and Switzerland students are identified early and encouraged to pursue technical training, he said. England spends about $2.3 billion a year on its programs, according to Neese.

“We have to be aware of the obstacles to making it happen,” Lerman said. “But I think South Carolina demonstrates you can expand apprenticeship, even in a down economy, and very little of it is construction.”

Patience Key

Patience is key to success in apprenticeships, said Jeromy Arnett, production administration manager at United Tool. He said he’s prepared to wait five years for full payout because the goal is to have experienced workers when veteran employees start to retire.

Wofford came to the company the summer of his junior year of high school, working about 40 hours a week alongside more experienced employees. The teen did mostly “grunt” work, cleaning and maintaining machines to help familiarize him with the shop, Arnett said. He split time between school and work at the shop his senior year.

During an interview last week Wofford was setting up a mold that was about to be machined to meet a customer’s engineering change.

“The student apprenticeship gave me a good head start to see what I’m getting into,” he said, smiling at a question about the benefit of heading into college training without accruing any debt. “My friends think I’m real lucky to be getting such a good deal.”

To contact the reporter on this story: Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net

To contact the editors responsible for this story: Kenneth Fireman at kfireman1@bloomberg.net; Tom Giles at tgiles5@bloomberg.net.


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