The Virtue of Apprenticeship

Commentators and political factions blame these labor market problems on everything from bad trade deals, to declines in manufacturing jobs, to corporate greed, to outsourcing, to an uncompetitive tax and regulatory environment, to lax immigration policy. But there is another contributing factor that receives less attention: the weaknesses of secondary, postsecondary, and job-training systems in preparing students for well-paid jobs and rewarding careers.

U.S. researchers too often equate “skills” with years of schooling, completion of degrees, or scores on tests of math and verbal capabilities. In their well-known book, The Race Between Education and Technology, Claudia Goldin and Lawrence Katz argue that increases in educational attainment have been too slow to yield healthy economic growth and reduce wage inequality. This view of skills is one driver of the expansion of higher education spending over recent decades. In 2014, the United States spent $27,900 per full-time equivalent student in postsecondary education, 81 percent more than the OECD average of $16,400.

Despite increases in years of schooling, added government spending, and the buildup of student debt, U.S. employers report that they still face a serious skills mismatch in various occupations, especially those in technical fields. One survey of a nationally representative sample of manufacturing companies found that “84 percent of manufacturing executives agree there is a talent shortage in U.S. manufacturing, and they estimate that 6 out of 10 open skilled production positions are unfilled due to the shortage.” The skills shortfall in manufacturing is primarily in jobs that require occupational and employability skills and is not necessarily about a shortfall in the general skills that come with many college degrees. In fact, worker productivity depends heavily on occupational competencies and employability skills such as communication, teamwork, the ability to efficiently allocate resources, problem-solving, reliability, and responsibility. Strikingly, in hard-to-fill jobs, firms generally prefer relevant work experience over a bachelor’s degree.

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