Should the Dept. of Labor’s Registered Apprenticeship Program Be Expanded? (H.R. 8294)

What is H.R. 8294?

(Updated September 2, 2021)

This bill, known as the National Apprenticeship Act of 2020, would provide statutory authority for the registered apprenticeship program at the Dept. of Labor (DOL). It would also support grant-related programs, among other provisions. A breakdown of its various provisions can be found below.

This bill would provide statutory authority for the Office of Apprenticeship (OA) within the DOL, which is responsible for:

• Supporting the development of apprenticeship models;
  
• Recognize qualified state apprenticeship agencies and operating apprenticeship offices in states without a recognized agency;
• Providing technical assistance to state agencies;
• Periodically updating requirements for each occupation in the apprenticeship program and determining whether to approve new occupations for inclusion in the program; and
• Awarding grants provided under this legislation.

Additionally, this bill would establish in statute the responsibilities of state apprenticeship agencies and offices. These responsibilities would include:

• Providing technical assistance to stakeholders;
  
• Resolving complaints;
  
• Establishing state performance goals; and
  
• Including descriptions of how their apprenticeship programs align with the skills needs of their states’ employers in their written plans.

The Office of Apprenticeship would enter into an agreement with the Dept. of Education to promote the integration and alignment of apprenticeship programs with secondary, postsecondary and adult education. It would also award grants to eligible entities to 1) expand national apprenticeship system programs, including by encouraging employer participation; and 2) strengthen alignment between the apprenticeship system and education providers.

Finally, this bill would establish criteria for various programs in statute. These criteria would include quality standards for apprenticeships, requirements for apprenticeship agreements between a program sponsor and an apprentice, and acceptable uses for grant funds awarded under this bill.

Argument in favor

Apprenticeship programs are an important job and career readiness option, especially in the current environment where many people may no longer be able to afford — or want to attend — traditional postsecondary education, or may need retraining in new industries after a job loss. Supporting and expanding the existing apprenticeship program at the Dept. of Labor is the easiest way for Congress to expand the availability of apprenticeships across the United States.

Argument opposed

The existing apprenticeship program at the Dept. of Labor is outdated and doesn’t meet the needs of many businesses, which would prefer to determine their own apprenticeship training requirements without the oversight of bureaucrats who don’t necessarily have the expertise to determine what skills are needed to train workers in a particular industry. Rather than expanding the existing apprenticeship program, Congress should take time to think about how to support industry-led apprenticeship programs that businesses take the lead in developing and administering.

Impact

Apprentices; apprenticeship programs; businesses offering apprenticeship programs; Dept. of Labor; Dept. of Education; and the Office of Apprenticeship (OA) within the Dept. of Labor.

Cost of H.R. 8294

The Congressional Budget Office (CBO) estimates that this bill would cost $3.1 billion over the 2021-2025 period.

Additional Info

In-Depth: Sponsoring Rep. Sausan Davis (D-CA) introduced this bill to expand apprenticeships and invest in workforce training:

“The National Apprenticeship Act will build on the success of apprenticeship programs by increasing our investment in American workers and creating more opportunities for them to get critical skills that lead to high-paying careers. We know the Registered Apprenticeship system is very successful, but it is just not having the impact on the workforce we need. By increasing standards, accountability, and coordinating programs with higher education institutions along with a greater investment, it will benefit more workers, the taxpayers, and our economy.”

Rep. Bobby Scott (D-VA), who serves as the Chair of the House Education and Labor (HELP) Committee, supports this legislation. He says:

“As our nation endures the deepest economic decline since the Great Depression, Congress has a responsibility to help Americans get back to work. The reauthorization of the National Apprenticeship Act is vital step toward accelerating the economic recovery for both workers and businesses. Registered Apprenticeships remain one of our most successful tools for connecting workers with in-demand skills and good-paying jobs. The investments in this bill will create nearly 1 million new apprenticeship opportunities while enhancing youth apprenticeship and pre-apprenticeship programs that will prepare a new generation of workers for the modern economy. I am grateful to Rep. Davis for her leadership on this bill and her tireless efforts on behalf of workers and local businesses over the past two decades.”

In its fact sheet on this bill, the House Education and Labor Committee notes that this legislation would create nearly one million new apprenticeship opportunities in addition to the current expected growth of the apprenticeship system. The committee also notes that expanding the apprenticeship program would yield $10.6 billion in net benefits to U.S. taxpayers. These would come in the form of increased worker productivity and decreased spending on public assistance programs and unemployment insurance.

The National Skills Coalition supports this legislation. Its Director of Government Affairs, Kate Spiker, says funding for youth apprenticeships and support for business-education partnerships is “critical to expanding apprenticeship throughout the country and bringing together entities with the knowledge, experience, and ability to best serve workers and businesses.”

The majority of House Education and Labor Committee Republicans opposed this bill when it was considered in their committee. In their minority views report, these committee members argued that registered apprenticeships give the DOL, rather than businesses themselves, too much power to determine training needs in industries:

“Although there is little data available on non-registered earn-and-learn programs, it is estimated that they comprise more than 80 percent of all apprenticeship programs. Businesses have expressed concerns that participation in registered apprenticeships allows DOL to dictate the skills their business must provide to apprentices in specific industries rather than allowing the businesses to determine what is needed. If a business created an apprenticeship model that meets their needs, then attempting to mold their program to fit the requirements of a registered apprenticeship would be counterproductive… Congress should update the NAA, but that update must be focused on meeting the needs of individuals seeking opportunities for advancement in the workforce and employers seeking to bridge the skills gap. While H.R. 8924 may be a step in the right direction in some aspects, the bill too often simply rubber stamps a decades old system, does not go far enough to streamline registered apprenticeships for today’s economy, and does not protect business’ ability to tailor their programs to individual needs.”

This legislation passed the House Education and Labor Committee by a 26-16 vote with the support of 44 Democratic House cosponsors.

Of Note: The Registered Apprenticeships (RAs) system is the United States’ most successful federally authorized workforce development program. The Dept. of Labor (DOL) reports that 94% of apprentices who complete Registered Apprenticeships are employed upon graduation at an average annual starting wage of over $70,000. However, the most recent data indicates that only 0.3% of the overall U.S. workforce has completed an apprenticeship.

Apprenticeships are arrangements that include a paid-work component and an educational or instructional component in which an individual obtains workplace-relevant knowledge and skills. Companies with apprenticeship programs register with either the DOL or a state labor agency. Program participants are paid by the employer while they receive training at work and in an educational setting (such as a college classroom or trade school). At the end of the program, the apprentice receives a job and an industry-recognized credential based on passing some form of assessment. Apprenticeship programs are overseen by either the federal government or a state agency in order to ensure that they meet national quality standards.

In 2016, then-National Economic Council Director Jeffrey Zients and then-Secretary of Labor Thomas Perez argued that apprenticeships are a strategic investment that pays dividends for both employees and employers. They observed that 91% of apprentices are employed after completing their programs, and that the average starting salary for someone coming out of an apprenticeship program is over $60,000. They also noted that employers benefit from apprenticeship programs, as every dollar invested in an apprentice returns $1.47 to the employer in the form of increased productivity, reduced waste, and greater innovation.

Brent Parton, deputy director of the center on education and skills at the New America Foundation, argues that growing the U.S. apprenticeship system, “even at a modest level, could be transformative.” He adds that apprenticeship is “an underutilized way of learning, something that’s really been something of a best-kept secret in a handful of industries.”

Some critics of apprenticeship programs point out that they tend to exclude women and people of color, particularly in higher-wage positions. Currently, most apprentices are white and male. In 2017, the DOL cancelled two contracts that sought to promote racial, ethnic, and gender diversity in apprenticeship programs.

More broadly, apprenticeship programs in the U.S. are plagued by doubts about their ability to become mainstream. Unlike in Europe, where apprenticeship programs are deeply ingrained in countries’ cultures (as is the case in Switzerland, where most 15-year-olds are in apprenticeships, or Germany, where the culture of apprenticeship has existed for hundreds of years thanks to strong national trade unions’ support), federally registered apprenticeships currently account for only 0.3% of the overall U.S. workforce. 

Due in part to their rarity in the U.S., apprenticeships also don’t have a well-defined relationship with higher education. Governing’s J.B. Wogan observes, “Proponents often trip over how to describe [apprenticeships] in relation to higher education: Are these part of someone’s eventual path to a four-year bachelor’s degree, or are they a cost-effective substitute for college?”

There are also practical barriers to expanding apprenticeship as a concept. The modern economy, in which workers have increased mobility and an easier time switching jobs, makes employers wary of investing in worker training, such as apprenticeships. Additionally, because apprenticeships train workers more narrowly than traditional college degrees, workers who are trained in such programs are among the most vulnerable workers during recessions, as their relatively narrower skill sets and less flexible knowledge can make it difficult to switch between industries.

Media:

• Sponsoring Rep. Susan Davis (D-CA) Press Release
  
• CBO Cost Estimate
• House Education and Labor Committee Fact Sheet
• House Education and Labor Committee Report
• Industry Week