Chicago Fed’s Community Development and Policy Studies on apprenticeships in manufacturing

Posted by Alexander Jordan - On August 07, 2014 (EST)

CDPS hosts a conversation on apprenticeships in manufacturing

By Jason Keller

Cross-posted from Chicago Fed Blogs
http://cdps.chicagofedblogs.org/?p=1490
Originally posted at Chicago Fed Blogs by Jason Keller and Emily Engel


According to the U.S. Department of Labor’s Employment and Training Administration (ETA), registered apprenticeship, a model for preparing new generations of skilled workers that can be traced back to the Middle Ages, remains an important method for training and placing workers. The current surge in apprenticeship has evolved from emphasizing learning in the traditional construction trades toward a focus today on new and emerging industries, such as energy, health care, and information technology for example. Today’s apprentices are registered in “earn and learn” work programs with expert mentors in their fields, allowing them to accumulate knowledge and build skills over time. The apprentice benefits by earning a fair wage as well as obtaining industry-recognized credentials and/or college credits. The 150,000 employers and other labor management organizations who already participate in the program also benefit because apprentices are not only placed on a structured learning track, but the industry-based training is specifically designed to meet employers’ current standards and practices. The various programs also have the capacity to track trends in demand, deploy resources, and match workers according to need. The success of apprenticeships’ on-the-job learning, combined with related technical instruction, leads toward a more highly skilled and highly productive workforce.

The Federal Reserve Bank of Chicago has long been interested in employment conditions as it seeks to promote the Fed’s dual mandate of maximum employment and sustainable economic growth.[1] For example, in 2011, Community Development and Policy Studies (CDPS), a division of the Chicago Fed, launched its Industrial Cities Initiative.[2] Known as ICI, this study took a closer look at ten former industrial/manufacturing hubs and their economic evolution over the last 50 years. The ICI paid particular attention to the labor force in these cities and the steps taken by local leaders, community colleges, and other labor organizations to meet demand for vocational and technical training by major employers.

In April 2014, the White House announced that the United States Department of Labor (DOL) will make $100 million in existing H-1B funds[3] available in the form of American Apprenticeship Grants. Expected to launch in the fall, this will be a competitive application process to award grants to partnerships that help American workers participate in structured apprenticeship programs. The grants are intended to encourage new apprenticeships by incentivizing employers, labor organizations, and training providers to work cooperatively. Awards are also intended to promote apprenticeships as pathways for further learning and career advancement, as well as to bring-to-scale exemplary models that work.[4]

To better inform the business and civic communities about this renewed commitment to the apprenticeship model and solicit feedback, the DOL worked with local intermediaries to hold a series of industry roundtables across the country throughout the month of June. The meetings brought together local leaders, employers, and labor organizations each with a vested interest in workforce development. The sessions were segregated by cluster: transportation and logistics (Atlanta), health care (Boston), construction (Washington DC), energy (Houston), and information technology (San Francisco).[5] The session held at the Federal Reserve Bank of Chicago on June 19 focused entirely on manufacturing by bringing together nearly 100 policymakers and practitioners on the topic of apprenticeship.

At the Chicago roundtable, Labor Secretary Thomas E. Perez[6] explained that the apprenticeship model is a “linchpin” and a “catalyst” toward sustainable economic vitality and job growth in this country. His remarks set the stage for an informative discussion on the needs, challenges, opportunities, and solutions for using apprenticeships in both traditional and advanced manufacturing.

Roundtable attendees were asked to comment on the following questions:

?  What are your current and future talent needs?

?  How can registered apprenticeships meet those needs?

?  What are the challenges to using registered apprenticeships?

?  What innovative solutions could be expanded and replicated?

?  What support is needed to advance registered apprenticeship efforts?

Results from the June roundtables will help the DOL determine if current federal policy pertaining to apprenticeship programs is effective or if additional enhancements are needed.

The Federal Reserve Bank of Chicago appreciated the opportunity to engage with the DOL in this important discussion. For more information on CDPS, please visit the Community Development & Policy Studies home page.[7] Additionally a recent ProfitWise News and Views article, Community Colleges and Industry: How Partnerships Address the Skills Gap[8] provides more information about community college and industry partnerships in the Seventh Federal Reserve District states of Iowa, Illinois, Wisconsin, and Michigan.


[1] See the Federal Reserve System mission statement, available at http://www.federalreserve.gov/aboutthefed/mission.htm.

[2] See the Federal Reserve Bank of Chicago’s Industrial Cities Initiative, available at http://www.chicagofed.org/webpages/region/community_development/community_economic_development/ici/ici_profiles.cfm.

[3] H-1B funds projects that provide training and related activities to workers to assist them in gaining the skills and competencies needed to obtain or upgrade employment in high-growth industries or economic sectors.

[4] The White House, available at http://www.whitehouse.gov/the-press-office/2014/04/16/fact-sheet-american-job-training-investments-skills-and-jobs-build-stron.

[5] American Apprenticeships: Industry Roundtable, available at: http://www.doleta.gov/oa/pdf/industry-FS-4.pdf.

[6] Thomas E. Perez biography, available at: http://www.dol.gov/_sec/.

[7] See Community Development and Policy Studies, available at https://www.chicagofed.org/webpages/utilities/about_us/cdps/index.cfm.

[8] See ProfitWise News and Views, available at http://www.chicagofed.org/digital_assets/publications/profitwise_news_and_views/2013/PNVNov2013_FINAL




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