American Apprenticeships Are on the Rise

Below is a complimentary Demography Unplugged research note written by Hedgeye Demography analyst Neil Howe. Click here to learn more and subscribe.

NH: Over the last decade, the number of young people in apprenticeships has skyrocketed. According to the DOL's Registered Apprenticeship system, in 2021, 212K youth aged 16-24 were enrolled in such programs.

That's an increase of +10% since 2019 and a staggering +104% since 2013. 

These programs are filled mainly by high school students. They go to school for half the day and then train at a local business. Specialties range from welding to tech installment.

Most students receive a paycheck, though it's smaller than that of a full-time employee. According to the Urban Institute, 87% find a job after completing a program with an average salary of $50K. 

For the last several decades, starting in the 1980s, vocational education has been overshadowed by colleges, politicians, and corporate leaders who emphasized the need for more college graduates.

They insisted that higher education was the key to both higher economic productivity and higher worker pay. Every teen, therefore, should be "college-ready." The voc-ed lobby countered that many young people learned better by doing and did not flourish in a college environment.

They also pointed to the success enjoyed by mainly European countries like Germany in boosting average entry-level wages by sponsoring strong apprenticeship programs. But they were mostly ignored.

So what's changed? Many things. Over the last decade, the skyrocketing cost of college tuition--and the high college dropout rate (especially among males)--made parents and teens question the wisdom of universal college ed.

More recently, since the pandemic, the hot job market for youth without degrees has made the non-four-year-college career route seem more attractive. As we have written, these same drivers are pushing up college enrollment in two-year skilled trades programs. (See "Skilled Trades Defy the College Enrollment Decline.”)  

Now the federal government is even funding some of these programs. Last year the Department of Labor spent $175M on apprenticeship grants. And the American Rescue Plan included $40B in workforce training. A portion of that money was used to fund new apprenticeship programs. 

Global economic forces are also at work. The whole premise of globalization was that America would specialize in exporting services performed by the highly educated and importing products produced abroad by the less-educated.

But as we wrote in April, America is retreating from globalization and looking toward home-sourcing and import-substitution to supply a rising share of domestic demand. (See "Is This the End of Globalization?")

America may soon need a workforce to produce many of the goods it previously imported. Young people trained in the trades may be an integral part of that transition.  

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ABOUT NEIL HOWE

Neil Howe is a renowned authority on generations and social change in America. An acclaimed bestselling author and speaker, he is the nation's leading thinker on today's generations—who they are, what motivates them, and how they will shape America's future.

A historian, economist, and demographer, Howe is also a recognized authority on global aging, long-term fiscal policy, and migration. He is a senior associate to the Center for Strategic and International Studies (CSIS) in Washington, D.C., where he helps direct the CSIS Global Aging Initiative.

Howe has written over a dozen books on generations, demographic change, and fiscal policy, many of them with William Strauss. Howe and Strauss' first book, Generations is a history of America told as a sequence of generational biographies. Vice President Al Gore called it "the most stimulating book on American history that I have ever read" and sent a copy to every member of Congress. Newt Gingrich called it "an intellectual tour de force." Of their book, The Fourth Turning, The Boston Globe wrote, "If Howe and Strauss are right, they will take their place among the great American prophets."

Howe and Strauss originally coined the term "Millennial Generation" in 1991, and wrote the pioneering book on this generation, Millennials Rising. His work has been featured frequently in the media, including USA Today, CNN, the New York Times, and CBS' 60 Minutes.

Previously, with Peter G. Peterson, Howe co-authored On Borrowed Time, a pioneering call for budgetary reform and The Graying of the Great Powers with Richard Jackson.

Howe received his B.A. at U.C. Berkeley and later earned graduate degrees in economics and history from Yale University.