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The LEAP Act Indicates It's Time For a New Training Model

By Irelis Arias on 4/24/2015
LEAP apprenticeship  

The summer internship is a rite of passage for many young adults – and a great source of cheap or free labor for businesses. But with most interns moving on after only a few weeks or months of informal learning, it might be time to consider a new training model: the apprentieship

Apprenticeships, popular in Europe, differ from internships in that they offer pay and formal on-the-job training. Once an apprenticeship is completed, workers receive a nationally-recognized credential, giving them qualifications outside of nebulous, unquantifiable “experience.” According to the White House, nine out of ten apprentices get hired for full-time jobs after completing their apprenticeship, with average starting wages of more than $50,000.

Despite the high success rate for apprenticeships, they remain relatively unknown in the United States. There are only 358,000 apprentices in the United States, accounting for roughly .2 percent of all American workers. Politicians on both sides of the political spectrum are currently taking steps to raise awareness of apprenticeships with the goals of lowering the unemployment rate and addressing the skills gap employers are facing.

Senator Cory Booker and Senator Tim Scott have recently introduced the Leveraging and Energizing America’s Apprenticeship Programs (LEAP) Act to try to boost apprenticeships in the United States. Senators Booker and Scott are hoping that the LEAP Act will create another 400,000 positions, more than doubling the number of apprenticeships available today.

Key pieces of the LEAP Act include:

-       Incentivizing apprenticeship by offering a federal tax credit for employers. Employers will receive a tax credit for hiring new apprentices registered with either the U.S. Department of Labor or a state apprenticeship agency.

-       Dealing with the youth unemployment rate. Currently, the average age of apprentices is 29. The LEAP Act will offer a higher tax credit, $1,500, for apprentices under 25. The tax credit for apprentices over 25 will only be $1,000.

-       Paying for this by reducing government printing costs. By 2015, many government publications will only be available online, with the exception of essential printed documents prepared for social security recipients, medicare beneficiaries, and other individuals with limited internet access.

In addition to the proposed LEAP Act from Senators Brooker and Scott, the White House has also been vocal about the need for apprenticeships. President Obama recently announced that the government will be allotting $600 million to grant programs to support apprenticeships. $500 million will go towards awards for community colleges partnered with businesses for job-driven training. The remaining $100 million will be earmarked for American Apprenticeship Grants for certain high-growth fields like information technology, healthcare, and manufacturing. This will be the first time the government has offered federal assistance to help sponsor apprenticeship programs.

Apprenticeships will prove to be valuable in the near future. Employers are already facing a skills gap in highly-skilled fields, and that gap will continue to grow: according to the Brookings Institution, the U.S. is expected to experience a shortage of nearly 5 million workers with necessary technical certificates or credentials by 2020. The Brookings Institution also anticipates that nearly 45 percent of all jobs over the next decade will be classified as “middle skill” occupations, which require more than a high school diploma but less than a bachelor’s degree. The formal qualifications earned under an apprenticeship model are perfectly suited to meet these requirements.

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