Indiana University SPEA Edward J. Bloustein School of Planning and Public Policy University of Pennsylvania AIR American University

Panel Paper: Will U.S. Companies Train? Lessons from South Carolina's Apprenticeship Carolina Program

Thursday, November 12, 2015 : 10:35 AM
Orchid A (Hyatt Regency Miami)

*Names in bold indicate Presenter

Brad Neese, Apprenticeship Carolina
The issue of skill mismatches in the U.S. is increasingly linked to the role of employers in training workers.  Despite anecdotal evidence that employers have difficulty filling skilled positions, some see the notion of a “skills gap” overstated, that hiring difficulties are the result of low wages or the absence of employer training.  Wharton Professor Peter Capelli (2012) sees an enormous training gap and “sagging investment in employer training among those companies apparently desperate for skills,” though he admits the evidence is weak.  Justin Rose, co-author of a Boston Consulting Group study of skills gaps, argues that “Companies should be much more aggressive about cultivating the next generation of manufacturing talent” and investment more in recruiting and in-house training.  MIT economist Paul Osterman argues that "Firms have gotten lazy [about training]. They're looking for someone else," such as community colleges, for-profit schools and online courses, to do that for them.

Whether employers will expand their training is critical for recent initiatives to expand apprenticeship in the U.S.  Federal government grants of $100 million are about to fund 20-25 projects aimed at increasing the numbers of registered apprenticeships.  Senators Cory Booker (D-New Jersey) and Tim Scott (R-South Carolina) recently proposed a bill to provide tax credits to employers who start apprenticeship programs or increase the number of apprentices. 

The initiative, Apprenticeship Carolina, began with a 2003 South Carolina Chamber of Commerce report. It recommended that the state create an apprenticeship program involving a partnership between South Carolina’s businesses and its 16 technical colleges.  The legislature provided an allocation of $1 million per year to operate Apprenticeship Carolina along with a tax credit to employers of $1,000 per year per apprentice. Launched in 2007 near the beginning of the Great Recession, Apprenticeship Carolina stimulated over a sixfold increase in the number of employers offering apprenticeships registered with the U.S. Department of Labor, from about 90 to nearly 700. 

In theory, such an increase in employer training is surprising, given the presumption that rational employers already know whether apprenticeship training is profitable or not and that the subsidy is small relative to training and wage costs. 

So how did Apprenticeship Carolina manage to stimulate such a large employer response?  The paper examines this question and draws lessons for understanding employer motivations and willingness to train. It discusses strategy, implementation, staffing, linkages with South Carolina technical colleges, and how Apprenticeship Carolina consultants interact with employers to help them see apprenticeships as a viable solution for their workforce development and training needs. It considers how employers think about training and how many employers change their views about in-depth training as consultants educate, provide technical assistance, and simplify the process of developing, registering, and implementing apprenticeships.