Registered Apprenticeships Deliver Skilled Workers and Living Wage Careers

While political changes have come to Washington, a long-overdue national workforce reckoning has been underway in every corner of America for some time, magnified by transformational changes to our economy and advances in technology. As recent and often acute labor shortages have hit in-demand industries like healthcare, IT, hospitality and construction, more employers and elected leaders have recognized that college degrees are neither essential nor the most cost-effective requirement for many jobs. 

Americans and policymakers from both political parties have acknowledged the promise of registered apprenticeships as viable career training alternatives.

Registered apprenticeships are tuition-free, enabling students to “earn while they learn” and obtain nationally-recognized credentials for a host of in-demand occupations. These one- to six-year programs don’t just benefit prospective employees who receive paychecks while learning trade-specific skills, but also employers, who gain access to qualified domestic labor supply pools for a wide variety of in-demand occupations. Over the last decade, the number of active apprentices in more than doubled across the United States.

Because most apprenticeships are privately funded, their success depends on employers balancing short-term pressures to maximize the bottom line alongside longer-term workforce supply needs. This has made programs financed and administered jointly by employers and labor unions the most successful and prevalent model, with training investments baked into collective bargaining agreements that are responsive to both the economic aspirations of participants and the workforce demands of employers.

The Living Wage Question

The Chief Evaluation Office at the US Department of Labor (DOL) recently posed a critically important question about these programs. Do they deliver “living wages?” In other words, are registered apprentices truly on career pathways that enable them to earn enough to pay for basic needs like food, housing, and transportation? 

To find out, the DOL commissioned a study by researchers at the Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois, which analyzed data for all 2.8 million participants in registered apprenticeship programs from 2019 through 2022. The results revealed that yes, these programs do dramatically increase the share of workers who can afford minimum essentials in their communities. It also concluded that joint programs were by far the most reliable at delivering these outcomes.

Across industries, apprentices earned an average of $32 per hour once they completed their programs. Exit wages were $38 per hour in joint programs but just $23 per hour in programs funded and administered unilaterally by employers. As a result, 99% of completers from joint programs earned living wages—a dramatically higher share than for those from employer-only programs.

High Demand

Registered apprenticeships are particularly important in the construction industry, which trains more than half of all apprentices in the United States. Joint programs developed through partnerships between employers and unions train 70% of construction apprentices, with completion rates that are 10% better  than employer-only programs. Not surprisingly, while many construction employers sounded alarms about labor shortages in recent years, industry surveys showed these issues to be much less severe in the unionized (or signatory) side of the industry. 

Ensuring that registered apprenticeship programs can scale to meet the skilled workforce demands for growing industries, and that these American workers can build careers that pay living wages is a clear policy imperative. Data consistently correlates these best-in-class outcomes with states where apprenticeship programs are supported not by direct government or taxpayer investment, but rather by policy frameworks that support workers.   

Specifically, states that protect collective bargaining rights, which enable workers negotiate with employers over training programs, and those that have prevailing wage laws, which establish local-market minimum wages and training investments on public works projects, tend to fare best. About half of US states currently lack one or both of these policies.

Keys to Success

A good example of why they matter is in South Carolina, where millions of public dollars have been invested through tax credits and a host of government grants to boost participation in registered apprenticeship programs over the last decade. Yet on living wage metrics detailed in the recent DOL-commissioned report, South Carolina’s apprentices have lagged behind peers in states that protect collective bargaining rights and have prevailing wage laws. South Carolina’s apprentices had the 3rd-lowest exit wages and 5th-highest share of apprentices who did not earn enough to pay for basic needs. South Carolina also ranked in the bottom half of states when it comes to apprentices being able to afford local fair market rents.

This is not to say that governments shouldn’t consider public investments that expand access to registered apprenticeships, or help employers recruit from new labor supply pools. South Carolina’s success in boosting enrollments proves that carrots like grant programs and tax code incentives can create more registered apprenticeship opportunities. But the data is clear that this method is not nearly as efficient in delivering a reliable labor supply, nor as effective at delivering living wage outcomes, as a policy framework that promotes partnerships between employers and labor unions—which has the added benefit of requiring no additional investment on the part of taxpayers.

Alongside disruptions in the labor market or cyclical changes in our economy, policymakers in both parties often feel pressures to reinvent the wheel. It is clear that no such measures are needed when it comes to registered apprenticeships. Instead, the data argues for leaning into the joint model that has proven to work—and for supportive policy frameworks, including collective bargaining rights and prevailing wage laws, that help it flourish.