This thesis has been approved by

The Honors Tutorial College and the Department of Political Science

______

Dr. James Mosher

Director of Studies, Political Science

Thesis Adviser

______

Dr. Cary Frith

Dean, Honors Tutorial College

GOT SKILLS? IMPROVING U.S. VOCATIONAL TRAINING AMIDST GROWING

DEMAND FOR ADVANCED VOCATIONAL SKILLS

______

A Thesis

Presented to

The Honors Tutorial College

Ohio University

______

In Partial Fulfillment of the Requirements for Graduation from the Honors Tutorial College with the degree of

Bachelor of Arts in Political Science

______by

Evan S. Cooper

May 2018

i

Table of Contents

Acknowledgements...... ii

Chapter 1: Introduction...... 1

Chapter 2: Literature Review...... 5

Chapter 3: Problems with Skills Production...... 25

Chapter 4: Germany Case Study...... 36

Chapter 5: United Kingdom Case Study...... 54

Chapter 6: United States Case Study...... 67

Chapter 7: Vocational Training Problems in the United States...... 87

Chapter 8: Alternative Policy Solutions...... 99

Chapter 9: Policy Objections and Rebuttal...... 122

Chapter 10: Conclusion...... 128

ii

Acknowledgements

This work would not have been made possible without the guidance and supervision of Dr. James Mosher, my thesis advisor and the Director of Studies for the

Honors Tutorial College Political Science program at Ohio University. Dr. Mosher has been an invaluable resource throughout not only the thesis writing process, but also throughout my entire undergraduate career. I am extremely grateful for your patience, support, and guidance throughout this entire process, as well as your willingness to take me under your wing as my thesis advisor and work with me tirelessly to achieve the final product that has become this thesis.

I would also like to thank Dr. Sarah Poggione, Dr. Nancy Manring, Dr. Barry

Tadlock, Dr. Jay Eungha Ryu, and, again, Dr. James Mosher of Ohio University’s

Political Science Department for working with me in my various tutorials over the past four years. Through the time spent working and talking with you all, I have come to better understand what it means to be not only a political scientist, but also a scholar and a thinker. Our tutorials together have been invaluable to me and I thank you all for your time and patience over the years.

Thank you also to Dr. Geoff Buckley of Ohio University’s Geography

Department, who convinced me to spend five weeks of my sophomore summer studying abroad in Edinburgh, Scotland. Our trip was a pivotal moment in my life that taught me how to survive on my own in a faraway land, but, more importantly, what it means to be an adventurous individual, capable of taking on the world. I will always remember our journey together and I thank you for everything you have taught me over the years. iii

I would also like to thank Dr. Cary Roberts Frith, Margie Huber, and Kathy White of the Honors Tutorial College for always helping me when I’ve needed assistance navigating my academic career, whether in regards to my thesis, studying abroad, graduate school, or simply just for a second opinion or clarification when necessary. I appreciate you all immensely and I will be forever grateful for your care and support over the years.

Finally, I would like to thank my friends and family for being my rock throughout all of this. All of your unwavering love and support over the past four years is what enabled me to become the scholar and person I needed to be to accomplish writing this thesis. I will be forever grateful for each and every one of you.

1

Chapter 1: Introduction

America is in a “crisis,” defined by Merriam-Webster dictionary as “an unstable or crucial time or state of affairs in which a decisive change is impending; especially: one with the distinct possibility of a highly undesirable outcome” (“Definition of CRISIS” n.d.). In this case, the “unstable or crucial time or state of affairs in which a decisive change is impending” refers to American unemployment, underemployment, low wages for the less skilled, and lack of effective post-secondary vocational training opportunities.

The “highly undesirable outcome” at stake is an American economy incapable of meeting the growing demand for advanced vocational skills due to increased prevalence and integration of new technologies in the American workplace, coupled with a weak post- secondary vocational training system. In this scenario, the American economy is quickly outpaced by other industrialized nations like Germany and the United Kingdom, who have stronger, more effective, better coordinated vocational training schemes with which they equip their citizens with the advanced vocational skills needed to remain competitive in a highly technologically-sophisticated economic context. Unfortunately, the people who stand to suffer the most in this scenario are those without a university degree, as typically non-university graduates have a lower degree of skill than university graduates, making them more easily replaceable in the workplace by new technologies. Without

“decisive change” regarding the American vocational training scheme at the post- secondary level—i.e. more training opportunities, better coordination among firms, schools, workers, and the government; more consistent training and certification standards, etc.—America is poised to fall behind the rest of the industrialized world economically and the less-skilled population will suffer the brunt of the blow. In order to 2 remain competitive and equip the greatest number of Americans with the skills necessary for success in today’s economy, significant change to the American post-secondary vocational training scheme is required.

To emphasize the importance of improving post-secondary vocational training in the U.S., let us quickly consider a scenario: imagine you are a senior in high school.

School is not one of your greatest strengths, so even though you will graduate from high school, you do not think a traditional four-year college education is for you. This creates a major dilemma, however. With only a high school degree your employment options are very limited and you have no desire to be stuck working a minimum wage job for the rest of your life, so you begin to consider your options. Realistically—since a four-year university is off the table—your options are: suffer through working a minimum wage job the rest of your life, join the military, or go to a community or technical college to learn a trade and some useful skills. You know you do not want to work a minimum wage job forever, and you are only 18 years old, so you are hesitant to sign your life away to the military without first considering some alternatives. This leaves you with the option to pursue a vocational education and gain relevant job skills so that you can eventually get a decent-paying job and begin to start your adult life. However, your options for vocational school are pretty limited and not all that impressive. One option would be to attend a community college to pursue an associate’s degree in some subject you are interested in, but you already know that you would rather work with your hands than sit in a classroom again every day. That leaves you with the option to attend a technical school, but the schools in your area are not very reputable and you have heard horror stories about people who attended a “for-profit” technical school only to encounter 3 endless headaches when trying to leave the school for further schooling or the workforce.

So what options are you left with? Looks like you will be retiring at that minimum wage job.

This scenario, while not necessarily the experience of everyone who decides a traditional university education is not for them, is still an unfortunate scenario for anyone to be in. If there were more consistently-reliable and reputable vocational training institutions, the choice to not go to college and instead pursue a vocational education would not be so difficult. When you consider the fact that America is currently in a position where it desperately needs highly-skilled workers—equipped with skills typically unattainable through a traditional university education—to offset the negative effects of increased automation and integration of new technologies in the American workplace, the necessity for improving American vocational education becomes much clearer.

In order to paint a clearer picture of the crisis American currently faces, in the next chapter, I will reference the work of several leading authors on the topics of technological change in the workplace and the necessity for improved vocational training.

The literature I discuss will cover various related topics such as the effects of technological change on workers and the economy, the role of technology in growing wage inequality, the wage gap between highly-skilled, highly-educated workers and less- skilled, less-educated workers; the importance of educational attainment in creating economic growth and reducing the growing wage gap in America, the different types of market economies, and the necessity of improving vocational training. 4

After the literature review, I will conduct three case studies covering the vocational training systems of Germany, the United Kingdom, and the United States. The case studies on Germany and the U.K. will explore both systems in-depth in order to better understand how each nation has achieved success in regards to vocational training, so that both nations’ vocational training models can serve as inspiration for improving vocational training in the U.S. The U.S. case study will explore various aspects of the current U.S. vocational training system in order to better understand how vocational training in the U.S. can be improved. Upon completing my case studies, I will begin to consider how to best improve the U.S. vocational training system and will design several viable policy alternatives for doing so. I will then compare each of my policy alternatives and pick the most viable, yet most effective solution for improving U.S. vocational education.

5

Chapter 2: Literature Review

Many different authors, scholars, and economists have considered the issue of the large increase in demand for skills and the problems associated with technological change, educational attainment, economic growth, jobs, and other related topics over the years. In order to more fully understand the issues that will be discussed throughout this thesis, one should become familiar with the key issues. From the effects of technological change to growing wage inequality, to the role of educational attainment in economic growth, to the reasons behind the necessity of improving vocational training, the current arguments in the literature paint a clearer picture of the problems associated with technological change, skills, and improving vocational training.

Modern technological advancements over the last fifty or so years have had a different effect on workers and production than earlier technological innovations from the early and middle Industrial Revolution. In the distant industrial past, many new technologies that were introduced into the workplace aided workers in being more effective and efficient in whatever tasks they were performing and led to rising wages for all or almost all. However, modern technological advancements, like computer technologies, are doing more than just helping workers be more productive. Today, computer technologies, referred to by some economists as “computer capital,” and other forms of automation are substituting for some types of human labor altogether— especially lower- and medium-skill labor (Autor, Levy, and J. Murnane 2003, 1280).

Computer technologies in particular have been able to replace or augment human labor in

“routine” tasks that involve a limited and well-defined set of cognitive and manual activities, such as bookkeeping, cashiering, and telephone operating (Autor, Levy, and J. 6

Murnane 2003, 1284). These kinds of jobs are easy to replace with computers because they only involve basic calculating, coordinating, and communicating functions that can be programmed into computer algorithms, which computers, capable of storing, retrieving, and acting upon information; can easily perform over and over again, indefinitely, making them more efficient and productive than manual human labor.

Scholars interested in contemporary technological change—such as the increased integration of computers in the American workplace—have found it useful to classify technological change into three distinct categories. According to one such scholar, author and economist George Johnson (1997), the three different categories of skill-biased technological change are intensive, extensive, and skill-neutral (Johnson 1997, 48).

Intensive skill-biased technological change is any kind of technological innovation that makes skilled workers more productive in the jobs that they already perform. An example of this kind of technological change is the widespread adoption and integration of computers throughout the economy which made workers in skilled jobs more productive than before. Extensive skill-biased technological change is any kind of technological advancement that makes skilled workers more efficient in jobs previously done by unskilled workers. The jobs of unskilled workers mostly involved routine manual or cognitive tasks, such as any simple, repetitive task like placing a part or making basic calculations, which are replaceable by new technology like robots. The integration of robotics into the economy is an example of extensive skill-biased technological change, because they substituted the simple jobs that the robots replace with the need for skilled workers, albeit only a small number of them, to design, operate, and maintain the robots.

This reduces demand for unskilled workers while simultaneously increasing demand for 7 the talents of skilled workers. Skill-neutral technological change would be any kind of technological innovation that increases the efficiency of both skilled and unskilled workers proportionally, causing no shifts in relative demand between jobs. An example of this kind of technological change would be the adoption of the assembly line, which increased the efficiency of both skilled and unskilled workers as it simply sped up the rate of production, without demanding much in the form of additional skills. And although the substitution of human labor by machinery has been occurring since the beginning of the Industrial Revolution; the difference now, however, is that computer technologies often introduce extensive skill-biased change, creating jobs for highly- skilled workers, but at the expense of less-skilled workers. Also, some new workplace technologies are now capable of completely substituting human labor in certain low- skilled tasks, making the human a redundancy in many of today’s workplaces and resulting in widespread loss of employment across many fields and industries.

The price of computer technologies will only continue to drop as they become more efficient and effective in performing their automated tasks. As the price of these technologies decline, industries that were initially intensive in routine labor input will make larger investments in computers (Autor, Levy, and J. Murnane 2003, 1280). In turn, these same industries will reduce the human labor input of routine tasks and will increase human labor input in non-routine tasks, which computer technologies are able to complement, but are unable to replace entirely. Autor et al. (2003, 1315) found that the industries that increased their use of computer technologies the most had the largest decline in human labor input of routine tasks. In turn, however, these industries had a greater increase in the human labor input of non-routine cognitive analytic and interactive 8 tasks. This shift toward greater human labor input into non-routine tasks will increase the demand for highly-educated workers, typically college-educated workers, who have a comparative advantage in non-routine tasks (Autor, Levy, and J. Murnane 2003, 1280).

The difference between routine and non-routine tasks lies, ultimately, in the fact that routine tasks can be broken down into a set of explicit programmed rules, which computers can easily follow (Autor, Levy, and J. Murnane 2003, 1283). Non-routine tasks, on the other hand, consist of rules that are not sufficiently well understood enough to be converted into a computer code and performed by computers. That means that human labor is still very necessary in industries that rely primarily on non-routine cognitive, analytic, and interactive tasks that require a lot of creativity or unpredictable mental calculations. As technology continues to advance, though, especially in the realm of computers and robotics, even human input in some non-routine tasks may be replaced by technology.

Although technology has only partially overtaken the role of human beings in the modern workplace, there is much evidence to suggest that technological change is not only reducing demand for unskilled workers but is simultaneously increasing wage inequality between high- and low-skill workers.

Evidence of the role technology is playing in wage inequality in America can be found by looking at the trend in real average hourly wage growth throughout the late nineteenth and twentieth centuries. From 1873-1973, real average hourly wages for

American workers rose steadily by 1.9% annually (Lawrence and Slaughter 1993, 161).

Then, after 1973, this trend reversed and from 1973-1992, real average hourly wages dropped from $8.55 in 1973 (calculated in 1982 dollars by the Consumer Price Index), to 9

$7.43 in 1992. If average wages had continued to increase at the rate they did prior to

1973, then real average hourly wages would have been around $12.00 in 1992, instead of

$7.43. The reversal of the gradually-increasing trend in real average hourly wages indicates that something occurred in 1973 that began to significantly impact workers’ wages, driving them downward. This decline in the average hourly wage has been driven by the decline in wages of the lower-skilled at the lower end of the income scale. It should also be noted that the upper-end of the wage-scale has been rising over the past sixty years, but the large decline of the low-end has been enough to pull down average wages overall.

The most likely cause of the trend reversal in wages is growing wage inequality between skilled and unskilled workers that began in the 1970’s and 80’s due to the increase in demand for skilled labor—combined with decreased demand for low-skilled labor—both caused by technological change throughout the economy (Lawrence and

Slaughter 1993, 162). One piece of evidence of the growing inequality between skilled and unskilled workers is that between 1979 and 1988, the ratio of the average wage of a college graduate to that of a high school graduate grew by 15%. Technological change during that period reduced the demand for unskilled labor by substituting much of it, while simultaneously raising the demand for skilled workers, for whom new technology became a complement to production. According to George Johnson (1997) economists studying the effects of recent technological change on labor found that most of the technological change since the 1980’s has been extensive skill-biased change, meaning that many jobs previously performed by low- or unskilled workers were complicated by the introduction of new technologies, making the tasks impossible for unskilled workers 10 and increasing demand for skilled labor. This phenomenon is known as “upskilling,” where the skills required for performing a job are increased due to complication of the task by new technology. Economists found that most of the “upskilling” that has occurred since the 1980’s directly correlates to the widespread integration of computers into the economy. They found that increased demand for skilled labor was highest in those industries which had the highest rate of investment in computer technologies. The introduction of computers in the workplace required workers to have at least basic knowledge of how to operate this new technology, so unskilled workers were forced out and skilled workers ushered in. The substitution for unskilled labor by these new technologies and skilled labor have contributed greatly to the widening income gap between skilled and unskilled workers. New technologies are able to increase productivity generally throughout the economy, thus resulting in an increase in average wages for all workers. The increase in wages for unskilled workers is minimal, though, compared to the additional wage increases for skilled workers brought on by higher demand for their skills. So, scholars have found that technological innovation has resulted in an increasing shift in relative demand for skilled workers, increasing their relative average wages and reducing the wages of low- or unskilled workers1. Since much of the technological change in recent decades has resulted in “upskilling,” it seems likely that technological change has also been a primary contributor to growing wage inequality in

America as well.

1 Some economists believe that this trend will slow and may even reverse as technologies such as computers advance to the point that they eliminate the need for skilled workers to operate them (Johnson 1997, 51). A common example of this predicted trend can be found in the growing popularity of online transactions which are simplified to be operable by relatively low-skilled people. This change eliminates the necessity of skilled labor in the transaction, eliminating those kind of jobs. 11

Another factor likely contributing to increasing inequality but also contributing to the trajectory of technological change is globalization. Technological change and globalization can work together in reducing the wages of and demand for lower-skilled workers. Lawrence and Slaughter (1993) seem to believe that the slow growth of

American average wages and growing inequality among workers can also be partly attributed to changes occurring in the United States’ international economic relations that have exacerbated the impact technology has had on growing inequality. The first major change that has occurred is the convergence of output from production between workers in different countries. As new technology has spread across the globe, the productivity of workers in countries like Japan have caught up with the productive output of American workers. This convergence in productive output has been accompanied by a convergence also in wage rates. The convergence of productive capabilities between American workers and workers in other countries has reduced the demand for American production in the global economy, which has affected the wages of less-skilled American workers, whose labor is now matched by workers in countries like Japan. According to economist and author George Johnson (1997), the displacement of goods requiring low-skill labor from the domestic American economy to other industrialized countries forced the U.S. to switch domestic production to goods requiring relatively higher levels of skill. This had the effect of increasing relative demand for high-skill labor, while simultaneously reducing demand for low-skill labor and reducing their wages. Additionally, many manufacturing and other “middle job” workers displaced by this transition were forced into the non-tradable, or “service,” sector of the economy, dramatically increasing the 12 supply of low-skilled workers and causing a decline in low-skill wages, since demand for unskilled labor remained relatively unchanged.

Increased foreign trade and investment in America has also forced American workers into more direct competition with workers in other nations and, as new technologies have increased the productivity of all workers—both foreign and domestic—the production capacity of foreign firms and workers has begun to near that of

American firms and workers as well. Additionally, new technologies have increased the demand for non-production labor—typically filled by skilled workers—resulting in even less demand for low-skilled American labor (Lawrence and Slaughter 1993, 163). Also, changes in American fiscal and monetary policy—which changed significantly under the

Reagan administration in the 1980’s—appreciated the U.S. dollar, making imports more affordable to Americans, while pricing U.S. exporters out of the global market, and ultimately resulting in reduced demand for American production, as domestic demand dropped due to the affordability of imports and international demand dropped due to exorbitantly high prices on U.S. goods. The combination of these three occurrences have resulted in significantly-reduced demand for low-skilled American labor, especially in manufacturing, resulting in an overall drop in the wages of low-skilled American workers. This development has further increased wage inequality in America, because contemporary technological change has increased the demand for highly-skilled workers—resulting in higher overall wages for that group—while simultaneously substituting human labor in low-skill manufacturing jobs, decreasing demand for (and thus the wages of) low- and unskilled workers (Lawrence and Slaughter 1993, 165). 13

While there is much evidence to suggest that the gradual decrease in wages of low-skilled workers has been closely tied to the various economic developments that have occurred since the 1980’s, there is also much evidence to suggest that insufficient increases in educational attainment over the same period have also indirectly contributed to the decline of low-skilled workers’ wages as well. In their article “The Future of

Inequality, the Other Reason Education Matters So Much,” authors Claudia Goldin and

Lawrence Katz (2009, 7) explain that, since the 1980’s, there has been a growing wealth gap between educated and less-educated workers. They have found evidence that indicates that the “ups” and “downs” in wage inequality over the years are caused by an ongoing “race” between technological change and educational attainment. This “race” is driven by the fact that, while technology change creates demand for skilled and educated labor, education provides the supply of skilled labor. Whenever technological advancement “leaps” ahead of educational attainment, wealth inequality increases. When the reverse occurs, and educational attainment outpaces the rate of technological advancement, inequality tends to decrease (Goldin and Katz 2009, 9). In order to reduce wage inequality, then, it seems that the answer is to ensure that educational attainment continues to outpace technological innovation. Currently in America, however, educational attainment is failing to keep up with technological change, which is resulting in declining wages for many American workers, especially among less-skilled workers, but even among medium-skilled workers as well. Goldin and Katz (2009, 8), in their study of the relationship between technology and education, found that nearly 60% of growing income inequality between skilled and unskilled workers from 1973-2005 could be explained by increasing economic returns on the educational investments of skilled 14 workers during that period, which resulted in an increase in wages for skilled workers as the wages of low- and unskilled workers stagnated or decreased. Clearly, education plays a significant role in increasing workers’ wages and offsetting the negative effects of the technological substitution of human labor. In order to combat technological innovation’s negative effects on workers’ wages, America must improve its education system so that it can keep the rate of educational attainment in America on par, or well above, the rate of technological change and innovation in the American workplace.

Many scholars also seem to believe that a nation’s rate of economic growth correlates directly to the level and rate of educational attainment within that nation.

According to Goldin and Katz (2009) economic growth stems from having an educated populace, because higher levels of education lead to improved labor production, spur greater technological innovation, and increase the rate at which advanced technologies can spread throughout society. The authors claim that the reason the United States enjoyed economic dominance throughout the second half of the twentieth century was because there was broad access to education throughout the country. Goldin and Katz

(2009, 10) assert that, because of this, any labor-market-based efforts to reduce inequality must focus on increasing the supply of educated workers, which would require greater investment in educational attainment among the populace. Efforts to increase educational attainment, will have to do more than just increase the amount of education those who already have access to higher education receive. Instead, to increase educational attainment overall, and thus keep up with the pace of technological change and spur economic growth, efforts will need to revitalize education-based mobility among those 15 who are currently unable to afford or access higher education (Goldin and Katz 2009,

11).

Although it seems that the answer to the problems created by technological change lies in greater educational attainment among American workers, the ways in which educational attainment can be improved can differ greatly depending on the economic structure of the nation in question. The structure of a nation’s economy can either limit or expand the potential policy solutions for improving something like educational attainment, so in order to improve educational attainment in America, it is important to better understand the type of economy the U.S. has and the unique characteristics of America’s economic structure in comparison to the structure of other types of economies. Unfortunately, most of the efforts to improve educational attainment in America have focused solely on expanding access to college education and have completely overlooked any possible solutions for expanding access to vocational training in the process. However, with a better understanding of the structure of the American economy, a new solution can be devised for improving and expanding access to vocational training in America.

Economic scholars have identified two distinct kinds of market economies: liberal and coordinated (Thelen 2004, 2). Economists characterize liberal market economies as focusing primarily on short-term financing arrangements, fragmented employers competing for the best workers, and industrial relations systems that are very adversarial

(Thelen 2004, 3). Liberal market economies typically rely heavily on market forces to coordinate the actions of firms and workers, as well as to facilitate the diffusion of technological advances and innovation across the economy (Hall and Soskice 2001, 8). 16

Coordinated market economies, on the other hand, focus more on “patient capital,” or long-term capital; highly coordinated employers working together to set wages and train the workforce, and various forms of cooperation between management and workers. In a coordinated market economy, firms work closely with other economic actors, such as employers’ associations and trade unions, to coordinate activity and spread technological change (Hall and Soskice 2001, 8). There are many countries throughout the world that employ a hybrid version of these two economies, but a few major economic players, notably the United States, as a liberal economy, and Germany, as a coordinated economy, have one or the other. In both types of economy, however, business and workers face the same kinds of dilemmas.

Thelen (2004) cites authors Hall and Soskice who claim that both of these distinct forms of market economies involve very complex, interconnected institutions and mechanisms that are dependent on one another (Thelen 2004; Hall and Soskice 2001). These so-called

“institutional complementaries” determine what groups in the economy hold the competitive advantage and force key actors, such as employers, to organize their strategies around the economic framework formed by economic institutions. This creates a dynamic where making changes to one area of the system will require adjustments in other areas, which ends up increasing the costs of change and multiplies the number of political obstacles standing in the way, as more and more groups become dependent on the existing system.

The differences in liberal and coordinated market economies, and why nations end up with one or the other, depends heavily on the nature of settlements between employers in skill-based industries, artisans, and early trade unions during the early 17

Industrial era (Thelen 2004, 5). How these groups interacted with one another changed the nature of how skill formation developed in each country, as the relations between these groups changed the character of collective bargaining institutions, early labor unions, and employers’ associations, and set each country on different national trajectories. For example, in Germany, the interactions between these groups lead to the development over time of the German vocational training system, which encouraged firms to invest in worker skills—primarily those of workers not pursuing post-secondary education at a university—and provided mechanisms to ensure the quality of the training received by non-university-educated workers (Thelen 2004, 6). This German system, however is closely tied to other aspects of Germany’s “institutional package,” including

“centralized collective bargaining, strong bank-industry links, and encompassing employer associations and labor unions” which enables Germany’s high-skill economy to offer high wages to workers and produce high value-added goods.

Germany’s vocational training system is regarded as exemplar by economists who adhere to the belief that skills and investment in human capital, or education, are the

“engine of growth” in an economy and investment in vocational training both provides an economic comparative advantage and lowers inequality (Thelen 2004, 8). Germany, being a coordinated market economy differs greatly in the opportunities it offers to workers, than countries with liberal market economies. Liberal market economies usually have wider gaps in the opportunities available to different kinds of workers, often times leading to massive income inequality (Thelen 2004, 9). Coordinated market economies, on the other hand, tend to offer greater opportunities to lower-skilled, non-university educated workers compared to liberal market economies, and often times have greater 18 income and wage equality too. Coordinated market economies are in a better position to combat wage inequality, because much of this inequality is caused by technological change, which increases the base level, as well as the intensity, of the skills required for production. The increased demand for skills caused by technological change can be easily met by strong private sector training systems set in the context of a standardized and uniform national system for vocational education. This, coupled with firms focused on

“diversified quality production,” can create a system of education and incentives that enable an economy to meet skill demands and produce a wide variety of high-quality goods, which enables firms to pay their workers better wages, and strengthens the nation’s economy as a whole.

Now, how individual firms choose to supply the skills they need can differ greatly. Most firms have to choose either to provide their own training to workers, of which the firm itself will have to bear some of the cost, or hunt and compete for skilled labor in the labor market (Thelen 2004, 11). The decision each firm makes in this regard creates a collective action dilemma. Without a consensus among firms about how they should all go about attaining the skilled labor they need, it is difficult for firms to choose to work in their own best interests. Since firms cannot trust that other firms will not simply “poach” the skilled workers for which they shelled out many resources to train

(something referred to by economists as “poaching externalities”), there is no real incentive for firms to invest in training their workers. In this instance, firms are afraid of other firms free-riding on or poaching their skilled labor, which ultimately results in a low supply of skilled labor for everyone. In addition, the fewer firms there are investing 19 in training, the higher the costs of such training becomes, providing even less incentive for firms to train their workers.

Some economists disagree with the idea of “poaching externalities,” however.

Thelen (2004) cites Gary Becker, an author who distinguishes between general and specific skills and argues that the threat of poaching is null in both cases (Thelen 2004,

11; Becker 1993). Becker (1993) claims that, while firms have no real incentive to invest in general skills for their workers, the workers themselves do have an incentive and will choose to invest in their skills, bearing the costs and potential profits of training by themselves (Becker 1993). He argues that, in a perfectly competitive market, the threat of poaching will not cause firms to refuse to invest in training, but will instead cause firms to value workers’ skills at the “full marginal product.” This means that firms will choose to place maximum value on a worker’s skills in order to ensure that the worker will choose to work for them and will not be able to find better wages anywhere else, since their skill is already being valued at maximum. Becker (1993) argues that poaching also poses no threat to specific skills, because such skills are “non-transportable” and only have value to particular firms (Thelen 2004, 12; Becker 1993). In this instance, since firms do not need to fear poaching by other firms, it is best for firms to split the costs of training specific skills with their workers, in order to reduce their costs, as well as increase the profits from return on the workers they train.

Now that the structure and associated problems of the American economy are better understood, the discussion can shift from the problems introduced by technological change to some of the issues concerning the provision of technologically-advanced skills to non-university students. As technological change continues to increase the demand for 20 skilled labor, it will be crucial for the American government to ensure that the supply of skilled labor can meet the growing demand, especially in regards to the supply of vocationally-trained labor, not just university-educated labor. Greater vocational training and education will be required in order to increase the supply of these medium-skilled workers.

For businesses, the biggest dilemma they face is securing a workforce equipped with the kinds of skills that are suitable for the businesses’ needs (Hall and Soskice 2001,

7) For workers, their biggest dilemma is trying to determine how much time, energy, and money to invest in which kind of skills. When it comes to trying to develop training and education schemes to resolve each of these dilemmas, however, there are a few key factors that actors in both liberal and coordinated market economies must consider. First, businesses will usually only be willing to participate in a training scheme if they have faith that the training or education will provide their workers with skills that are valuable, and that other businesses will not “poach” newly-trained workers (Hall and Soskice 2001,

10). Workers, on the other hand, will only choose to invest and/or participate in training or education if they are assured that their investment of time, energy, and money will pay off afterward in the form of gainful employment. In order to assure both businesses and workers of the value and payoffs of their investment into training and education, institutions must be put in place that are able to provide reliable information about appropriate skill levels, the training and education itself, and the employment prospects of workers post-training.

Liberal and coordinated market economies both have unique economic arrangements that work to resolve the dilemmas faced by businesses and workers. In 21 coordinated market economies, like Germany, often rely on industry-wide employer associations and trade unions in order to implement and oversee a publicly-subsidized training system (Hall and Soskice 2001, 25). Since industries in coordinated market economies rely so heavily on specific and co-specific worker skillsets, the ability of businesses to coordinate with one another and with workers to provide these kinds of specific skills is crucial (Hall and Soskice 2001, 17). In order to provide this kind of training, employer associations and trade unions in coordinated economies put pressure on businesses to take on apprentices and monitor their participation in training (Hall and

Soskice 2001, 25). By pressuring every business in an industry, the employer associations and trade unions can significantly reduce the likelihood of businesses “poaching” the workers trained by a business that invests in the training scheme. In addition to pressuring businesses to employ apprentices, employer associations and trade unions also negotiate industry-wide skill categories and training protocols with the businesses in each industry. This ensures that the training that is offered to workers will provide them with the skills that the businesses need, as well as ensuring that there will be external demand for workers post-training that do not get hired by the business at which they apprenticed.

In liberal market economies, industries tend to prefer that workers come equipped with general skills that can be easily-transferable between businesses (Hall and Soskice

2001, 30). Liberal market economies tend to provide vocational training and education through outside institutions that provide workers with a high level of general skills, such as universities or vocational colleges. This preference is due to liberal economies’ heavily reliance on market forces to meet the supply and demand of skills required by industry.

Since workers enter industries equipped with a high level of general education, the cost 22 of further training workers for more firm-specific skills is much lower than in coordinated economies. This enables businesses in liberal economies to engage extensively in “in-house” training of their workers, since the transferable general skills workers already have set such a high base that additional training on the firm’s dollar is not very expensive. Also, because workers in a liberal economy typically have such a high level of general skills, if they lose employment at one firm, they can often easily find a demand for their skillset at a different firm. That means that workers are more willing to take on the cost of their education entirely on their own, because they have confidence that there will be demand somewhere for the skills they invest in.

Liberal and coordinated market economies also differ in one more crucial way: in how they are able to facilitate the diffusion of technological advancements and innovation across their economy. Since economic actors in coordinated market economies rely so heavily on long-term labor contracts, and the movement of workers between firms is limited, the diffusion of new technology and innovation across industries is very low (Hall and Soskice 2001, 26). In order to affect technology transfer across the economy, actors in coordinated market economies rely on close inter-company relations, sharing new technologies and innovations openly within an industry. Liberal market economies, on the other hand, have a less difficult time affecting the transfer of new technologies and innovations. Since liberal economies rely heavily on market forces, labor contracts are usually much shorter-lived than in coordinated economies so that workers can shift around the economy as demands change. This means that the movement of scientists and engineers can move much more easily between firms, which also means that new technology and innovation is able to spread easily throughout the 23 economy as highly-skilled workers move around (Hall and Soskice 2001, 31). Although the methods of vocational training and education, and the mechanisms for affecting technology transfer, differ greatly between coordinated and liberal market economies, both have adopted unique institutions and mechanisms over time to ensure that workers and businesses are willing to invest in increasing the level of skills throughout the economy.

To briefly summarize the main points of the literature, technological change and innovation in the American workplace has begun to significantly alter the American economy, increasing demand for highly-skilled workers across the board, while simultaneously replacing and displacing low- and unskilled workers. This phenomenon has led to an increase in wage inequality between highly-skilled, highly-educated workers and workers with few or no skills and little or no education, as the demand—and thus wages—for highly-skilled workers has increased and the demand—and also wages—for low- and unskilled workers has dramatically decreased. In order to remedy this unfortunate phenomenon, it is crucial that America work quickly to expand educational opportunities for low-skilled workers, especially in the realm of vocational training, as vocational training is well-suited to equip workers with relevant skills that exponentially increase their chances of finding a decent paying job in their desired field. However, when devising a solution for improving American vocational training, it is important to take into consideration the fact that the American economic structure differs in many ways from the economic structures of other nations with successful vocational training systems that might be used as inspiration for an improved American system. Since the

U.S. is a liberal market economy, the range of available, viable solutions might differ 24 greatly from another nation with a coordinated market economy. Regardless, before any real solution for improving American vocational education can be devised, it is important to more closely examine the main problems associated with the production of skills and skilled labor, which I will do in the following chapter.

25

Chapter 3: Problems with Skills Production

The process of producing skills and skilled workers is incredibly complex. To more clearly understand the dilemmas a nation faces when producing skills, it is necessary to take a look at the entire process of skills production and identify areas where issues that could hinder the entire process might arise. In the end, it is important to understand that any new vocational training scheme must be attractive to nearly all firms and workers and be able to eliminate incentives to “free-ride” off of the program.

The system of incentives designed to attract the participation of the actors involved in vocational skills production (i.e. firms, workers, the government, etc.) is one of the primary areas that problems with skills production often occur. In order for all of the various actors involved in skills production to coordinate the production of crucial vocational skills, a sound system of incentives must be in place to keep each actor invested in the skills production scheme. However, it is necessary to first understand the possible incentives actors might have not to invest in a skills production scheme in order to understand how they might be properly incentivized to invest their time, energy, and money into producing skills.

For example, there are several reasons why firms are often hesitant to invest in new collective/industry-wide skills production schemes. One reason is that many individual firms already have their own training schemes in place to equip their workers with skills related either specifically to the firm itself, or to their particular industry as a whole. If a firm deems that their current training scheme is sufficient, then they have no incentive to invest in a more industry-wide training scheme that may or may not better prepare their own workers or prospective workers with the right skills necessary for that 26 particular firm to stay competitive. Instead, any new training scheme worth investing in needs to produce skills at a higher level and faster rate than firms’ current training programs. Many firms also hesitate to invest in new vocational training schemes out of fear that some firms will see the program as an opportunity to “free-ride” off of the investments of the participating firms. This is a reasonable fear for many firms, as the temptation to simply wait for apprentices to finish their training at a participating firm and then offer those workers an enticing position to secure their newly-trained labor is too strong for some firms. This eliminates the need for firms to invest in the training scheme and likely leaves the participating firms feeling cheated. Another reason firms often hesitate to invest in new vocational training schemes is that the required investment from an individual firm can be too expensive. This disincentive most frequently affects smaller firms with less money to invest and fewer workers to train, meaning that the benefit they would ultimately receive from the training program might not be worth the investment, or would be, at the very least, not great enough of a benefit to justify the potential risk.

Workers also face dilemmas when choosing to invest in skills. One of the main issues workers face is knowing the “right kind” of skills to invest their time and energy in learning. In order to remedy this issue, any new training scheme will need to go above and beyond to promote itself to prospective apprentices and prove to them that the skills they are about to invest in are in high demand by a multitude of firms across the economy. Many workers also fear that their investment in skills will not pay-off in secure, long-time employment. If a new vocational training scheme is going to attract the investment of workers, it will need to contain a mechanism that can grant apprentices a 27 certain degree of guarantee that they will be hired on by a “good” firm post-training and will not simply be “left out in the rain” with a bunch of new skills, now made worthless.

Also, some prospective apprentices—especially those in lower socio-economic groups— might be unable to afford to pay for enrollment in the new training program, unless some form of financial aid and/or scholarships are part of the new system. There may also be an issue with some apprentices being unable to physically access training centers, especially if there are no training schools or centers in close proximity to them and/or they are unable to afford to move away to participate in training. This might require the construction of physical campuses to house vocational training, as well as the development of housing aid, in order to consolidate apprentices from larger areas or whole regions into a single, central area, likely established near a major center of industry or commerce.

The federal government will also likely require sufficient incentives to invest in a new vocational training scheme. To begin with, the government will likely refuse to invest in any training scheme that lacks widespread support among firms and the populace, especially if they do not deem the program has enough support to net a positive economic return on the government’s investment. Another issue concerning the federal government is that a new vocational training scheme will likely require the creation of a new federal agency to manage and oversee the program’s operation. Creating a new government agency means that the federal government will need to make space in the national budget, which may require making cuts to other, more popular programs, such as health care or the military, meaning that the new program could be a hard sell to the public, in addition to simply making the federal bureaucracy generally bulkier. Also, the 28 government might lack complete information about what skills exactly are most needed by industry and the economy, making it difficult to choose which skills to focus on training. In order for a new vocational training program to work, the government will need up-to-date information on skill demands, as well as a mechanism to keep track of changes in skill demand over time—a function which might be performed by a new federal agency, as mentioned before.

Another problem to consider is how to properly incentive people to work as trainers in the new training scheme. Depending on the structure of the new vocational training scheme, the government and industries will need to hire or contract out people to teach both practical vocational skills and theory to apprentices. In order to attract trainers, the training program will need to offer them competitive salaries or contracts, in order to incentivize them to come train apprentices rather than work somewhere else. Also, it will need to be decided whether trainers will be hired full-time or part-time, or whether they will only be contracted to train for a set period of time.

The role of the states in the new vocational training scheme is also something to be considered. Unless the new training program is federally-mandated, individual states will need proper incentives to “buy-in” to the new training scheme and allow for the construction of training campuses, if necessary; contribute to paying the cost of training, etc. If states have no reason to invest in the new training system, then large portions of the population could be denied access to vocational training, which will ultimately impact the long-term success of the program as a whole.

Aside from issues related to incentivizing participation in training, it is also important to consider potential problems with coordinating the development and 29 execution of a new vocational training scheme. The most critical aspect of coordination between actors is the obtaining and sharing of information. In the case of vocational training, this information could include things such as skill needs, standards for training/certification, news about technological innovations or breakthroughs that will impact skill demands, etc. However, obtaining such information and sharing it are two separate things entirely, and, in order to maximize the effectiveness of vocational training, coordination between actors must be improved to enhance the process of gathering and sharing such important information. One issue, as mentioned earlier, is a possible lack of trust between firms. If firms are unable to trust that their peer firms will invest in the scheme and promise not to “poach” skilled workers post-training, then it will be impossible for firms to work together to coordinate the training of the skilled labor highly-needed by the economy. Another issue to consider is the lack of a proper coordinating agency—an entity responsible for gathering data on in-demand skills, coordinating the placement of apprentices in firms, settling disputes between firms and apprentices, etc. Without an agency to oversee the “bigger picture” of the training scheme, the new program will operate below maximum efficiency, impacting its long- term success and damaging its reputation.

There are also many issues associated with the costs of creating a new vocational training scheme. The biggest cost-related issue is deciding how the new training program will be funded. Should individual firms across industries share the bulk of the cost?

Should the federal government fund the program out of the national budget? Should the states take responsibility for paying? Will apprentices be expected to pay “tuition” for training? Should the total costs be split between all of the involved parties? It is important 30 to also consider that the costs of a new training program might “price out” certain parties, especially smaller firms and low-income apprentices. Also, the payoffs of creating a whole new vocational training program (e.g. economic growth, higher wages, increased profits, etc.) will need to far outweigh the costs. Another serious consideration should be whether the construction of new infrastructure will be necessary and, if so, to what extent and at what cost. The new training scheme, depending on its form, might require the construction of new campuses for training, new roads to access said campuses, etc., all of which will likely entail fairly high costs to construct.

It is also important to understand that the structure of the economy also creates specific dilemmas related to vocational training. If an economy is a “liberal market economy,” most economic activity (e.g. price-setting, supply/demand of skilled labor, etc.) is controlled by markets, rather than by close coordination between economic actors as in a “coordinated market economy,” where coordinating skills production is less complicated. Since markets typically control the production of skills, trying to

“manually” coordinate skills production will be difficult since many firms will be unaccustomed to cooperating and coordinating with other firms.

Another one of the biggest dilemmas facing prospective participants in a new vocational training scheme is the price-tag associated with creating a brand new system of vocational training from scratch, such as “start-up” costs, which can potentially be very high. Some of the associated costs include: the high costs to build vocational training programs (including both physical infrastructure, as well as hiring training staff and moving money around to incentivize firms and prospective apprentices to participate), the costs of paying school tuition for apprentices (which, in some cases, the 31 states pay for), and funneling money to high schools and community colleges to make them more effective partners in the overall vocational training scheme (Jacoby 2014).

Another issue with creating a new vocational training scheme is the corporate and overall cultural focus on short-term financial gains over long-term benefits typical of many liberal market economies. A firm in a liberal market economy is much more likely to want to invest in equipping workers with firm-specific skills that will benefit their specific company in the short-term, rather than invest in a vocational training scheme that will reap many long-term benefits for both individual firms and the overall economy, but will net very few short-term gains for the firm itself. This is because in a liberal market economy, there is less coordination, traditionally, between economic actors, meaning that economic interactions are driven by competition, which is usually more dependent on short-term, rather than long-term, performance. In addition, some developed nations are plagued by widespread negative attitudes toward practical skills and “blue-collar” work, which many people in those societies associate with a lack of intelligence and low- income lifestyles. However, practical skills should not be looked down upon, especially when the economy is in desperate need of such skills.

Each of the problems discussed above represent serious roadblocks for implementing a new, national system of vocational training. Firms, workers, and the government alike are hesitant to buy-in to a new system of vocational training for fear of the high costs and uncertainty associated with such an investment. In a coordinated market economy—where firms, organized labor, and the government have worked together for decades to create a high-quality system of vocational training that can easily adapt to the constantly changing skill demands of the economy—vocational training 32 seems easy. However, simply copying this model of skills production to use in a differently-structured economy, like a market-centered “liberal market economy,” is usually quite difficult—the very nature of such market-based economies and societies differing to such a degree that simply copying a coordinated market approach is certain to result in catastrophic failure. With that said, the potential for creating a similarly-effective vocational training scheme in a liberal market economy is vast, but there are a multitude of considerations to be made before attempting to take on such a task, if the ultimate goal is to better equip its economy to adapt to the high skill demands of the new technologies rapidly infiltrating the modern workplace.

Clearly, the process of producing skills is quite complicated—many different pieces must fall into the right places at the right times for the right skills to be produced to meet the right needs of the labor market. Despite the multitude of problems associated with skills production, there are three areas that stand out as being the most crucial to the success of any given skills production system: information, costs, and incentives.

In any situation, it is difficult to make the most rational decision without sufficient contextual information. In the case of skills production, full information is a necessity, because each of the actors—firms, workers, and the government—must have complete information about the kind of skills in which to invest. The government must know the overall skill demands of the economy, as well as the supply of such skills produced by the education system. Firms should know what skills they need to maximize production and efficiency when working with the new technologies in their warehouses, offices, and factories. Lastly, workers should be informed about what skills are most in demand, so that they can maximize the return on their investment in learning new skills. 33

The associated costs of vocational training should also be of great concern to all participating actors, as the question of who will bear the costs of producing skills might determine who is and is not willing to participate in the skills production scheme. If the government bears the burden of the paying for the scheme, then it will likely have to raise taxes and make significant changes to policy in order to foot the bill, which could affect the overall popularity of the new program. If firms bear the cost of training, then they will likely demand protections from “poaching” and “free-loading” by other firms who choose not to share the costs of training, which could affect the number of firms willing to buy into the new system. Finally, if workers are forced to pay for training, then many potential apprentices will likely be shut out from the system due to an inability to pay the price of training, which would defeat the whole purpose of creating a new training scheme.

The last problem, and arguably the most important, is that of incentives. Effective skills production requires the cooperation of all economic actors and as such, each individual actor must be properly incentivized to participate in the system in order for it to be effective. To properly incentivize the government to invest in such a program, it is likely necessary to prove that there is popular support for improved vocational training, so that legislators can feel confident that they are not putting their careers at risk by supporting such a scheme. Firms, in order to be properly incentivized to participate, will likely require some kind of guarantee from the government that their investment into the system will pay off in the end, either with more highly skilled workers, or with sufficient financial compensation. And finally, workers, to feel confident that they are making a worthwhile use of their time, energy, and money, will need some guarantee that their 34 investment into learning new skills will pay off in the form of gainful, secure employment at the end of their training.

Although there are many other issues to resolve when considering the coordinated production of skilled labor, these three are the most central to the success of any given skills production scheme. Without proper information, the shared distribution of costs, and sufficient incentives, firms, workers, and the government will be unlikely to invest any significant amount of time, energy, or money to a new system of vocational training.

If each of these problems can be resolved in a way that is acceptable to each of the relevant actors, then perhaps an effective system of skills production can be devised.

The problems with skills production can have effects on the general public as well, especially if taxpayer money is used to finance part of a nation’s vocational training scheme. Being the realm from which labor is sourced, the general public has a heavy stake in the long-term success of a nation’s system of producing skills. Without an effective system of skills training, a nation might suffer from high unemployment and a weak economy, both of which are against the best interests of the general populace. As such, it is important for the public to take an interest in the structure and performance of its country’s skills production scheme. Media has an important role to play in keeping the public informed about the performance and achievements of the vocational training scheme. The media can keep the populace updated on things such as program enrollment numbers, the number of apprentices accepted annually, the rate of completion for apprentices, information about apprentices’ post-training placements, etc. By keeping the general public informed, the media, as well as the economic actors invested in country’s 35 skills production, can ensure that the public is well-prepared to take the right position on matters related to the nation’s vocational training system.

36

Chapter 4: Germany Case Study

If the biggest issue facing the modern economy is a lack of skilled technical labor amidst an increasing demand for it, then it would seem that the best path to resolution would be to carefully analyze the training and education systems of countries that have successfully bridged the gap between the supply and demand of skilled vocational labor.

Germany happens to be one of the most successful countries in this regard. In Germany,

86% of “working age” adults (aged 25-64 years) have obtained at least an upper secondary education, with nearly 48% of upper secondary students enrolled in either a vocational or pre-vocational training program (OECD 2014). Among the working age population, 55% have obtained vocational qualification at either the upper-secondary or post-secondary level. These statistics indicate that vocational training plays a major role in Germany’s economy and labor force. But how effective has the German model of vocational training been at reducing unemployment, if that were the ultimate goal of such a system of skills production? According to the Organization for Economic Co-operation and Development (OECD), between the years of 2005-2012 (leading up to and following the global 2008 recession), unemployment in Germany dropped steadily by 7% for

Germans without an upper-secondary education, with a 6% decrease for those with an upper-secondary education or higher. In addition, among German workers with an upper- secondary education, employment rates are higher for those who have obtained a vocational qualification than for those with only a general qualification (OECD 2014).

Also, as of 2012, only 10% of German youth were both unemployed and not in school—a rate lower than the average among OECD nations—with that status being less prevalent among young adults with an upper-secondary vocational education. 37

The German model of training and education has also resulted in a smaller discrepancy in wages between “tertiary-educated” (meaning education received at the university level, in Germany) workers and those with an upper-secondary or post- secondary non-tertiary education, with the latter earning around 84% of their more educated peers’ wages—a higher rate than the average among OECD nations. In addition to greater equity among wages, the German system also produces higher average wages than in other systems, especially in the higher manufacturing sector where skill demands are higher. On average, German workers earn about €3,775 a month, which is higher than the similar monthly averages in other Western economies (Trading Economics 2017). In

Germany, workers trained under the “dual” vocational training system receive both practical and theoretical knowledge about the skills in their trade, granting them a higher level of skills overall (Arbeitsagentur 2016; Carroll 2013; DW English 2014, 2015; Euler

2013; Federal Ministry of Education and Research n.d.; Jacoby 2014; Steedman 1993;

Thyssenkrupp 2017). Having both a practical and, more importantly, theoretical understanding of their skills enables German workers to not only be more productive in the workplace, but also deploy their skills more flexibly and adapt to challenges in their jobs with greater ease—which ultimately also allows them to command higher average wages than workers in more practically-focused training systems. Also, wage negotiations in the German system are autonomous, operating largely without government intervention and control, meaning that labor unions, work councils, and employers’ associations can negotiate wages without direct input from the government

(Spitz-Oener 2017). This combination—having both a greater mastery over and flexibility with certain vocational skills, in addition to autonomy over wage 38 negotiations—has resulted in higher average wages for German workers, than for workers in other systems, especially in higher-skill sectors. With vocational training playing a central role in the success of the German economy and labor force, the German model serves as an excellent case study for attempting to resolve the disparity between the supply and demand of skilled labor.

To better understand how the German model of vocational education might be applied to and adopted by other economies, it is important to first understand the structure of the German system. The German model is known as a “dual vocational training system” in which students split their time between on-site job training through apprenticeships, and classroom time studying the theoretical aspects of their particular trade. Vocational training in Germany comes in three different forms: in-firm training, school-based vocational training, and non-firm training (Federal Ministry of Education and Research n.d.). Each type of vocational training can be conducted at several locations and varies depending on the profession. In-firm training can be completed at firms, public service institutions, establishments of independent professionals, and in private house- holds. School-based vocational training is completed through German vocational schools, and non-firm training can be completed at any training vocational training facility not covered by the other two types of training.

Apprenticeships are the focal point of the vocational training system in Germany.

These apprenticeships typically include a combination of several days a week of on-site job training and one or two days of in-class instruction in order to prepare apprentices to do their jobs in a “theoretically-considered and practically competent way” (DW English

2015). Apprentices are usually paid a stipend of a few hundred Euros a month (depending 39 on their particular field of work), and are usually offered a full-time position at the firm with which they trained upon completion of their apprenticeship, provided that the firm has full-time positions available. There are no standard requirements for becoming an apprentice, rather the requirements differ from firm to firm, depending on each firm’s preferences and specific needs—the exception being that prospective apprentices are expected to have the German equivalent of a high school diploma from either a

“Gymnasium” or “Realschule” (Qualified Professionals Initiative 2017). Students from

Germany’s Hauptschule—slower-paced and more vocationally-oriented schools than

Gymnasium or Realschule—also complete apprenticeships until leaving school at age 18, but this type of vocational training occurs at a lower level than the training received by students from Realschule or Gymnasium who enter apprenticeships as well (How To

Germany 2017). Some firms expect prospective apprentices to have some prior experience in their field (i.e. through an internship, etc.) and some firms also have minimum age requirements. There is also a general expectation from firms that prospective apprentices are at least partially fluent in German—a point more relevant to immigrant applicants, who may not speak German well, than to German-born citizens, who likely speak fluent German. Once officially certified, German workers are instantly in demand—able to find employment even outside of the firm with which they were an apprentice.

Prospective apprentices initiate the vocational training process by applying directly to an employer for an apprenticeship (Carroll 2013). If an applicant is granted an apprenticeship, the employer then enrolls their new apprentice in a local training school, known as a “Berufsschule,” where apprentices attend a few times a week to study the 40 theoretical aspects of their trade that complement the practical skills they gain while working on-site at their training firm. In Germany, a firm typically pays somewhere between $25,000-$80,000 to train a single apprentice, depending on the firm and sector

(Jacoby 2014). Equipping apprentices with hands-on job experience and practical skills, as well as a deeper theoretical understanding of those skills and the tasks they will be expected to perform on the job, has the additional benefit of boosting workers’ confidence in their skills and ability to apply them (DW English 2015). In addition, having both a thorough theoretical and practical understanding of their particular trade gives German workers greater flexibility within their industry—enabling them to change between firms, as the successful completion of a German apprenticeship rewards workers with official certification issued by either the German Chamber of Industry and

Commerce or the Chamber of Crafts and Trades—depending on the particular worker’s vocation.

The key to success for Germany’s “dual” vocational training system lies in the close relationships between the German government, the states, employer associations, trade unions, firms, and workers (Federal Ministry of Education and Research n.d.).

These entities rely on close, constant communication with one another to “keep up” with changes in the market (due to things like technological innovation) and resulting shifts in demand for particular skills, as well as being able to adjust training regulations and update occupational profiles accordingly. Also, in Germany, the responsibility of standardizing training falls to the German government’s Federal Institute for Vocational

Education and Training (BiBB), which—with help from labor unions and employers’ associations—standardizes and continues to update all training, testing, and certification 41 throughout the country—assuring that apprentices will always receive the same degree of quality training, regardless of the region in or company with which they apprenticed

(Thyssenkrupp 2017; Federal Ministry of Education and Research n.d.).

The success of the German model of vocational training is further reinforced by a high level of widespread public acceptance of the program (DW English 2015). The prospect of receiving a vocational education in Germany is so widely supported by

German society that firms are actually “eager” to take on apprentices—so much so that

German firms go to great lengths to attract prospective talent from the highly competitive market for apprentices by offering incentives like higher wages and even free cars to try and attract the best apprentices to their firm (DW English 2014). The German public also keeps a close eye on the achievements of the German vocational training system, typically through the German media, which frequently updates the populace about the number of vocational training applicants, the number of awarded apprenticeships, program graduation rates, etc. Workers also have been given an incentive to continue working closely with other economic actors, especially firms, in the form of what is known as “codetermination.” Codetermination, or Mitbestimmung—a deeply-rooted practice in German corporate governance dating as far back as the 1920’s—means direct worker participation in the decision-making of a firm and, in 1976, the German government passed a law detailing the contemporary legal framework surrounding codetermination in the German workplace. (Berger and Vaccarino 2016).

Codetermination in German exists in two forms: “shop floor” work councils and company-level supervisory boards. Work councils, or Betriebsrat, have existed in

Germany since the 1920’s, when the “Work Councils Act,” or Betriebsverfassungsgesetz 42 legally entitled workers in firms employing more than five employees to create a “work council” (“Works Council” 2017). Work councils are “endowed with far-reaching information and consultation rights” enabling workers to better influence firm decision- making regarding things like working conditions and general training policies, with the exception of pay, which work councils are not entitled to negotiate (Berger and

Vaccarino 2016). Supervisory boards, or Aufsichtsrat, are part of a two-tiered system of representation that includes an executive board made up of firm executives and the CEO, and the supervisory board made up of an assortment of shareholder, employee, and union representatives. The Aufsichtsrat mainly appoints management board members and monitors business operations overseeing their activities, but also is the entity responsible for approving the firm’s major strategic decisions, giving the Aufsichtsrat, and the employees, de facto ultimate corporate power. The history of close coordination and cooperation between firms, workers, and the government in Germany has enabled them to, over time, develop the close economic relationships necessary for developing and effectively executing a stable system of vocational training as coordinated and effective as Germany’s.

The stability of the German model of vocational training is further reinforced by a compelling incentive structure that keeps the government, firms, and prospective workers invested in the program. The most obvious beneficiary of the German style of vocational training is the German government itself. Being able to communicate closely with industry allows the government to stay informed about what particular skills are most in- demand, allowing the government to alter training regulations and shift the focus of vocational institutions to providing the skills needed by the German economy. This 43 dynamic between government and firm in Germany allows the German economy to quickly adapt to changes in technology, as well as ensure that the German populace is equipped with relevant skills that will increase their chances of obtaining gainful employment, which provides an incentive for the government’s continuation of vocational training, as it ultimately reduces the burden of unemployment on the German government.

German firms also benefit from the vocational training system by ensuring that the labor needs of individual firms can be met by a universal, high-quality standard of vocational training. By participating in the training process, German firms can be sure that their workers are equipped with the skills needed by their particular industry, allowing those firms to remain competitive both domestically and internationally.

Finally, German workers benefit from the German model of vocational training beyond simply the obvious benefit of being taught relevant technical skills. German vocational training also benefits German workers in the form of better employment prospects and greater job security, higher wages, and flexibility. German workers, upon receiving their certification, can be confident that they will be able to find gainful employment should their firm ever be forced to let them go. One specific public incentive built into the German model that benefits both workers and firms is “short-time compensation,” which helps to stabilize the German economy in times of economic downturn (e.g. the 2008 recession) by compensating workers when their employers reduce their hours (Brookings Institution 2012). In addition, the German government has also agreed to help pay for workers’ social security benefits such as health care and 44 retirement, which incentivizes firms to not only hire apprentices, but also retain them at the firm, if possible, upon completion of their apprenticeship.

Another incentive for firms and workers exists in a system developed by German employers working closely with organized labor and the state known as the “flexible working time toolkit.” As part of this system, workers agree to work overtime without receiving overtime pay, so long as employers agree not to lay off their workers during periods of economic hardship and to also “bank” workers’ overtime hours in “working time accounts.” Then, if a firm ever lays off a worker, they are required, by contract, to give that worker severance pay, in addition to wages for all of the “banked hours” in their

“working time account.”

Longer job tenure is another incentive for German workers to participate in the

“dual” system of training. Since the “dual” system equips workers with greater flexibility of skill at a higher level than workers trained elsewhere, German workers are deemed highly valuable and, as such, firms typically seek to hold on to their workers for life, meaning that the average German worker typically has a longer tenure than their foreign counterparts. This set of institutions create strong incentives for firms to hold on to workers during economic downturns, rather than simply laying them off. The system of incentives that exist within the German model help to keep the state, firms, and workers invested in Germany’s system of vocational training.

It is important to note that Germany’s highly effective vocational training system did not merely appear overnight, rather it was molded over many centuries by changing dynamics between labor, employers, and the government. The current dynamic between labor and capital in Germany began long ago in Imperial Germany with the existence of a 45 strong independent artisanal sector—known as the Handwerk, or “organized handicraft”—that maintained the rights to regulate apprenticeship training and certify vocational skills (Thelen 2004). In 1897, the German state, supportive of the Handwerk’s claim to manage skill training, passed legislation creating a legal framework for apprentice training formally under the control of the Handwerk, giving its master craftsmen—men distinguished both in legal terms and social status by their expert knowledge of their trade—parapublic authority over skills production in Germany

(Thelen 2004, 40). At first, this new framework of skills production under the control of the Handwerk was strongly opposed politically by the Social Democrats who were skeptical of the firm-based apprenticeship model of training, but, over time, as more and more workers from the social democratic labor unions gained their credentials under the new system of skills production, the Social Democrats and the unions sought not to tear down the new framework of skills training, but rather to control or at least co-manage the new system (Thelen 2004, 41). With the growing support for the new system of skills production from Germany’s labor unions, the machine industry—where many unionized workers, certified under the new system of skills training, were employed at the time— quickly became a key player in the development of vocational skills. Coveting the artisanal sector’s power to certify skills, Germany’s major machine firms first sought an alternative, segmentalist model of training to compete with the artisanal sector’s model— one based heavily on plant-based schools focused on training for firms’ internal labor markets, which reflected emerging training practices in the U.S. and Japan at the time.

However, since the handicraft system of apprenticeship training was so heavily-ingrained in German society, it was difficult, if not impossible, for Germany’s industrial firms to 46 think outside of that system, resulting ultimately in the continuation of the existing training model which relied heavily on coordination between firms and ran parallel to the previous Handwerk system of the artisanal sector. The coexistence of the industrial and artisanal models of skills training, and their interaction with one another, changed the trajectory of Germany’s system of skills production, pulling it away from the decentralized and unsystematic training of the older handicraft model toward a newer model of highly standardized and uniform training. Both organized labor and the machine industry supported this newer model of training and as such, both actors became heavily invested in the new system and advocated for it strongly as it continued to evolve (Thelen

2004, 42). Eventually, Germany’s new system of training had been in place for long enough that by the end of World War I, most of Germany’s organized industrial workers had received their skill credentials through the apprentice system (Thelen 2004, 52). As more and more workers received their qualifications through the apprenticeship model, both firms and unions began to realize the benefits of a system of skill certification (e.g. the official documentation and proof of skills) that was separate from both the firms and unions. Since the apprenticeship model enabled workers to develop their skills in a way that was industry-specific—but still general enough within each industry as to be applicable to any number of firms—the new system of apprenticeship training provided

Germany the additional benefit of greater flexibility for the labor market as a whole

(Thelen 2004, 53). As time progressed, the coordination, standardization, and uniformity of skills only increased—through the Nazi regime, which further standardized and homogenized skills in order to satisfy the large number of skilled workers needed for its military interests and war mobilization; into the post-war period, when firms were 47 seeking to replenish the stock of skilled labor lost during the war and the German government sought to solve its problem of high youth unemployment; up through the

Vocational Training Acts of 1969 and 2005 that only further increased the use of apprenticeships and enhanced the coordination and cooperation between labor, firms, and the government (Thelen 2004; Federal Ministry of Education and Research n.d.)

Although it is well known that the evolution of the German vocational training model has, over time, increased the ease with which Germany can equip its workers with advanced vocational skills, it is also important to acknowledge the ways in which the

German system has been able to confront and resolve the most common issues related to skills production that are faced by most modern economies. While there are many different problems associated with skills production, most of these problems can be grouped into three main categories: incentives, administrative, and cultural.

Incentivizing the various actors to participate in a new scheme of vocational training is quite difficult, especially since these actors—firms, workers, and the government—have different motives for participating in vocational training. One of the biggest issues preventing firms from participating in vocational training is the potential for “poaching” or “free-riding” by other firms seeking to reap the benefits of training without sharing the costs (Thelen 2004). Essentially what this means is that firms are concerned that if they invest in a general system of vocational training in which participating firms spend time and energy training apprentices and equipping them with the skills needed to be successful in their industry, other firms—those who “opt out” of the training scheme—will “steal” newly-trained workers by offering them higher salaries or more lucrative positions than the invested firms can offer. Without a mechanism to 48 either protect from skills “poaching” or force all firms to “buy-in” to the training scheme, firms will remain hesitant about participating in vocational training, which will threaten the integrity of the entire operation. In the early 1900’s, when German industrial firms were seeking to develop their own system of training and certification to rival the craft guilds’, they created the “German Committee for Technical Education,” or Deutscher

Ausschuß für Technisches Schulwesen (DATSCH), which served as a forum for firms to combat “poaching” by coordinating the management of increased competition for skilled workers and discourage firms from not participating in training (Thelen 2004). Such coordinating mechanisms as the DATSCH are part of the “varieties of capitalism” that different capitalistic systems like Germany utilize to prevent “poaching” and

“nonparticipation” in training. An example of the DATSCH’s efforts to combat “non- participation” and “poaching” can be found in a 1911 call by the organization for all member firms to commit to train a number of apprentices equal to roughly 10-15% of their total workforce (Thelen 2004, 60–61). More recently, the German government passed legislation in 2004 entitled the “Act Against Unfair Competition” placing strict guidelines on worker recruitment from other firms which, if violated, can open up the recruiting firm to litigation from the worker’s current employer (Federal Ministry of

Justice 2010; Schöne 2012). The strict guidelines on recruitment and the threat of litigation from violating these guidelines likely help to assuage firms’ fear of “poaching” since violators can be heavily penalized, allowing firms to more confidently participate in training knowing their investments are fairly safe.

Another issue that might keep firms from investing in a new vocational training system is that individual firms might already have successful “in-house” training 49 programs that are effective at producing the skills workers will need to be successful in that particular firm. Any new training scheme, especially one with a more industry-wide focus, will need to be able to produce vocational skills at a higher level and faster rate than individual firms can, so those firms will have an incentive to participate in vocational training alongside other firms. In Germany, this issue is resolved simply by the nature of the “dual” vocational training system. The dual system provides apprentices with both practical skills for their profession and a thorough theoretical understanding of the skills they are taught—a system which produces the “higher level” of skills needed to incentivize firms to choose the vocational training system over their own in-house programs. Since these vocational programs are typically completed in two years—a relatively short time-table—this system is arguably even quicker at producing skills (at least at a higher, more theoretically-understood level) than any in-house training program. While firms are still entitled to maintain their independent systems of in-house training, the popularity of “dual” style apprenticeships and the strong competition between firms for talented apprentices gives many German firms a reason to participate in the coordinated “dual” system of vocational training.

Another major concern with many vocational training schemes is deciding who will bear the brunt of the costs for training. In Germany, the costs of vocational training are the burden of both firms and the German government, which, in 2012, paid about

42.8% and 57.2%, respectively, of the total cost for vocational training (Euler 2013). The government is willing to pay this cost because of the overall economic and social benefits gained from a strong system of vocational apprenticeship training. Firms are willing to bear the costs of training because many are able to recoup the costs of training from “the 50 productive contributions of their trainees and other factors that generate benefits for the respective business” (Euler 2013). The government and workers are typically easier to incentivize to participate in vocational training. The government will participate, largely due to the fact that, without the government’s coordination, planning, and participation; a strong, nation-wide system of vocational training would not exist. Governments typically support vocational training as a way to reduce unemployment, especially among youth, and to generate economic growth and stability—this is no different for the German government. Workers are typically eager to obtain an apprenticeship, especially if the system of vocational training in their country has a track record of equipping apprentices with applicable, in-demand skills that result in gainful, long-term employment—as is the case with the German “dual” model of training.

The second category of training-related problems is administrative, which relates primarily to the regulation/standardization of training, as well as information and coordination problems. In regards to the regulation and standardization of training, in

Germany, the Federal Institute for Vocational Education and Training (BiBB), in cooperation with joint committees consisting of representatives from labor unions and employers/firms, sets the standards for all training, testing, and certification, ensuring that apprentices in the “dual” system receive training of a similarly-high caliber, regardless of the location of their training (Thyssenkrupp 2017).

Another administrative issue with vocational training is prospective apprentices being unsure of the “right skills” to invest in. In Germany, employment agencies, called

Arbeitsagentur, have been established to help aid prospective apprentices in the decision- making process of finding a suitable apprenticeship (Arbeitsagentur 2016). At the 51

Arbeitsagentur, prospective apprentices can meet with a “careers councilor” face-to-face, for free, who will help each prospective student find a suitable apprenticeship and show them where to apply. Prospective apprentices can arrange an appointment with a “careers councilor” by calling the number of the Federal Employment Agency, or by searching for the address of their local Arbeitsagentur online and making an appointment.

Another important administrative problem to consider is that of effective

“tracking” of students, to enable them to follow their best path to gainful employment, including, possibly, a vocational education. In Germany, elementary school, or

Grundschule, students, upon completing the fourth grade, are placed—based on their particular interests, their school performance, and the recommendations of their teachers—in one of three different educational “tracks”: Gymnasium, Realschule, and

Hauptschule (How To Germany 2017). The Gymnasium track is for students who are more academically-inclined and prepares them for either University or higher-level vocational training. Realschule is designed to prepare students for either part-time or higher-level vocational schools, with the potential to switch into the academic track upon graduation from Realschule. Hauptschule is the lowest-tier track meant for students who struggle academically, so it is slower paced and leads to part-time enrollment in a vocational school combined with apprenticeship training. Students in each track are able to complete apprenticeship training, regardless of ability, but Germany’s tracking system helps to better guide students toward career fields where they are most likely to succeed.

Another potential administrative problem is the lack of suitable pathways to higher-level vocational training in some countries. In Germany, those on the vocational path can attain higher-level vocational training to become a Meister, or “master” of their 52 trade, by applying for master craftsman programs or other advanced degree programs

(ReferNet Germany 2015). Upon completion of a Meister program, these master tradesmen are legally certified to train apprentices in their trade (Steedman 1993).

The third and final category of problems relating to vocational training regards the various cultural issues that can stand in the way of an effective system of occupational training. First and foremost, the nature of a nation’s economy suggests the level of difficulty that nation might face when trying to implement a new vocational training system. The nature of a country’s economy can change overtime, but is shaped largely by the evolution of relationships between the various economic actors—especially between workers, firms, and the government. Germany is fortunate in that it has what is known as a “coordinated market economy,” meaning that economic activity in Germany is driven primarily by coordination and cooperation between the relevant economic actors (Thelen

2004). A coordinated market economy makes supplying effective vocational training much easier, because firms, workers, and the government are used to working closely with one another to conduct economic activity. However, some countries have what is known as a “liberal market economy,” where economic activity is controlled primarily by market forces and competition drives economic actors who are, as a result, less accustomed to working closely with one another to coordinate things like skills training.

Another cultural issue is that of an overemphasis on receiving a traditional college education, in addition to widespread negative perceptions of “blue collar” jobs and practical skills. In Germany, however, the “dual” vocational training system has been so wildly successful in equipping students with skills that make them readily employable, 53 that the bias towards a traditional, academic-focused college education is less prevalent and the German population is much more accepting of vocational education.

One other relevant cultural problem is actually tied closely to the kind of market economy a nation is—that of a cultural/corporate focus on short-term financial gains, rather than long-term societal and economic benefits. In Germany, the close relationships between labor and employers, inherent in Germany’s coordinated market economy, force the German business culture to focus more on long-term benefits like lifetime employment, stable pensions, higher average skill level, generous workers compensation, etc., rather than simply increasing annual profit margins, as is typically the primary focus of businesses in a liberal market economy, where profit is often placed over people.

Together, these many potential problems related to vocational training add up to create quite a challenge for nations seeking to create a new vocational training scheme.

Germany, due largely to its history of close coordination and cooperation among its government, firms, and workers, has been able to find suitable solutions for many of the problems inherent to conducting vocational training. Any nation seeking to create a vocational training system modeled off of the highly effective German “dual” model will have to cope similarly with the problems previous discussed.

54

Chapter 5: United Kingdom Case Study

The United Kingdom, as a liberal market economy—albeit one with a history of strong labor and employer organizations and a certain degree of economic coordination between actors—is often viewed as a useful model to look to when considering the design and implementation of coordinated vocational training in other Western, non- coordinated market economies.

Vocational training, as a means of equipping young workers with the skills necessary to be successful in any particular trade, has existed in the United Kingdom dating as far back as the Middle Ages, when the children of wealthy parents were sent to train as apprentices with master craftsmen from the medieval craft guilds (Keen 2015).

England’s first national apprenticeship system was created in 1563 with training conditions comparable to the minimum standards for apprenticeship training today.

Throughout the 1900’s, the number of apprentices in the U.K. ranged from 340,000 at the beginning of the century to nearly one-third of all male youth by 1960. Apprenticeship training in England has only continued to grow in popularity since then, with 912,200

U.K. youth working as apprentices by the end of the 2016-2017 academic year—an increase of 0.8 percent from the previous academic year (UK Department for Education

2017).

The apparent success of apprenticeship training in the U.K. today hides the period of decline in the quantity and quality of U.K. apprenticeships between the 1960’s and

1993, when significant reforms were made to the U.K.’s apprenticeships system (Keen

2015). Criticized by employers as being “restrictive, too focussed [sic] on time served and unresponsive to the needs of industry,” apprenticeships in the U.K. were reformed in 55

1994 as part of a new apprenticeship scheme called “Modern Apprenticeships” (Keen

2015; Unwin and Wellington 1995). The new “Modern Apprenticeship” scheme was aimed at “reconnecting” apprenticeships with the mainstream system of education in the

U.K. and providing a viable alternative for youth interested in receiving a work-based education over a full-time academic education (Unwin and Wellington 1995). In an attempt to retain the “best” aspects of traditional U.K. apprenticeships, “modern apprenticeships” continue to function as a means of creating autonomous, “skilled” workers capable of meeting the higher skill demands of the modern workplace (Fuller

1996). One important aspect of the new apprenticeship model was that it was led by employers themselves, unlike the U.K.’s previous “Youth Training” scheme which utilized special “training providers” to act as mock employers for apprentices (Unwin and

Wellington 1995). Now, instead, apprentices in most sectors begin their apprenticeships directly with an employer, an opportunity that significantly increases their chances of gainful employment post-training. In addition to the benefit of getting apprentices to work directly with employers, the new “Modern Apprenticeship” scheme is also attempting to expand the reach of apprenticeship training into many occupations previously lacking any form of vocational training (Unwin and Wellington 1995). One critique of the new “Modern Apprenticeship” model is a lack of consistency across the board in terms of the style of training apprentices receive in different sectors. For many apprentices, their training is conducted in an ideal fashion—directly through an employer, receiving quality training in the skills of their trade—but for some apprentices, training takes on a less ideal form. There are some “modern apprentices” who are simply

“sponsored” by a firm, and instead receive training through a third-party “training 56 provider”—which has occurred to some apprentices in the chemical sector—while still other apprentices are hired into a setting where the they work alone and receive little to no direct training—as has been the case with some apprenticeships in the childcare sector

(Unwin and Wellington 1995). Post-reform “modern apprentices” were to now be paid a wage and considered as employees of the firm with which they were training.

Apprenticeships under the new model are governed by a written agreement between the employer and apprentice, with more emphasis placed on obtaining certain qualifications—namely “level 3” National Vocational Qualifications (NVQs)—and “core skills” like communication, problem solving, teamwork, and computer literacy, rather than merely serving time as an apprentice (Gospel and Fuller 1998). By placing greater emphasis on higher level qualifications like the NVQ level 3’s and acquiring the “core skills,” the U.K. has sought to raise the overall standards of vocational training for the new “modern apprenticeship” model from the comparatively lower standards of the old

“youth training” model (Fuller 1996). However, the transition to the new model of

“modern apprenticeships” from the old “youth training” model has met sound criticism, especially in regards to the quality and quantity of new apprenticeships. Critics claimed that the new qualification standards—based on the acquisition of NVQs—set a lower bar than previous vocational qualifications, and that the “core skills” goal of the new model is too vaguely laid out and achieved inconsistently across different sectors. Other critics also expressed concern about deficiencies in the new arrangements for training, assessing apprentices, and assuring the quality of the training received.

Despite a number of criticisms, the “modern apprenticeship” model has remained and, in 2004, the U.K.’s apprenticeship system was further reformed, creating “advanced 57 apprenticeships” for higher-level training and removing the upper age limit of 25 for apprenticeships, while also introducing “pre-apprenticeships” and “young apprenticeships” to prepare younger students and less-prepared students for full apprenticeships down the road. “Young Apprenticeships” were ended with further reforms in 2010 that also introduced a new, higher level of apprenticeship known as

“Higher Apprenticeships” which are equivalent to the U.K.’s “foundation degrees”— combined academic and vocational qualifications, roughly equivalent to two-thirds of a bachelor’s degree. The U.K.’s apprenticeship system was reformed even further in 2012 when new “minimum standards” were introduced, requiring “that all apprenticeships must last at least a year, provide 30 hours’ employment a week and a minimum amount of guided learning” (Keen 2015). The many reforms made to the U.K. apprenticeship system have resulted in nearly a million apprentices working in the U.K. today, which, given that roughly 32,105,000 U.K. citizens are currently employed, accounts for about

3% of all U.K. labor.

To better understand the process of becoming an apprentice in the U.K., one should have a general idea of the structure of the British school system. The British education system is divided into four levels of education: primary, secondary, further, and higher, with most British students completing primary school from ages 5-11 and secondary school from ages 11-16 (International Student n.d.). At the end of secondary school, British students must complete a series of examinations (usually consisting of ten exams) that, if passed, will award students with a “General Certificate of Secondary

Education (GCSE)” that enables them to either go on to “further” education in what is known as a “Sixth Form college” until they are 18, and then on to higher education at a 58 university; or finish school and enter the working world (“Education in England” 2017).

Vocational training in the U.K., in the form of apprenticeships, runs parallel to the U.K.’s system of higher education, with seven “sub-levels” of certification across four “levels” of apprenticeship—intermediate, advanced, higher, and degree—which are roughly equivalent to the “GCSE,” “A level,” foundation degree, and bachelor’s/master’s degree levels of traditional U.K. education, respectively (“Become an Apprentice - GOV.UK” n.d.). In order to enter a certain level of apprenticeship training, prospective apprentices must meet specific entry requirements for each level, varying based on the qualifications and work experience apprentices in each level are expected to have prior to entering. For intermediate, or “level 2” apprenticeships, the completion of which is roughly equivalent to five GCSE exam passes, prospective apprentices must be at least 16 years of age and be able to demonstrate an ability to complete the training program based on expectations that can differ across different training providers, employers, and jobs (“Entry

Requirements for Apprenticeships in England” 2017). For advanced, or “level 3” apprenticeships, the completion of which is equivalent to two “A level” examination passes, prospective apprentices are usually expected to have at least three or more GCSE passes and some prior work experience in their industry, though these expectations can differ depending on the industry. Higher apprenticeships encompass both levels 4 and 5; completion of level 4 is equivalent to a “higher national certificate”, a foundation degree, or the first year of an undergraduate degree; while completion of level 5 is equivalent to the completion of a full degree. The requirements for higher level apprenticeships are, as expected, higher than the requirements for intermediate and advanced apprenticeships, typically requiring certain GCSE and A level qualifications, as well as a greater degree of 59 work experience in their particular industry. Degree-level apprenticeships are the highest level of apprenticeship in the U.K. and are a recent addition to the British system of vocational training, enabling U.K. apprentices to obtain a full bachelor’s or master’s degree throughout the course of their training. The entry requirements for degree-level apprenticeships are much higher than the other levels of apprenticeships, requiring certain exam qualifications, as well as certain vocational qualifications such as the “National

Vocational Qualification” which is a work-based award achieved through assessment and training in an apprentice’s particular industry (“Entry Requirements for Apprenticeships in England” 2017, “National Vocational Qualification” 2017). Employers typically expect degree-level apprenticeship applicants to have certain qualifications in subjects related to their particular industry and apprenticeship, though these expectations vary depending on the industry and employer. With a better understanding of various types of apprentices available in the U.K., we can begin to explore the specifics of the U.K. model of apprenticeship.

Apprenticeships in the U.K. are similar to apprenticeships in other Western nation’s training schemes, but, being that the U.K.’s vocational training system is adapted to the specific economic, political, and cultural context of the United Kingdom, apprenticeships there are designed to fit the U.K.’s unique needs. And although apprenticeship training in the U.K. differs in many ways from the “dual” model of vocational apprenticeship training in Germany, it still has had to address similar problems with training that are inherent to any vocational training scheme, namely that of properly incentivizing the various actors to participate. 60

When considering how to incentivize participation in its vocational training scheme, the U.K. had to address many of the same incentive, administrative, and cultural/structural problems Germany had to solve when developing and implementing its

“dual” training scheme. Of the incentive problems, the U.K. had to figure out how to eliminate “poaching” of trained workers by non-training firms, how to convince firms with existing high quality “in-house” training to participate in a general training scheme, who would be responsible for paying for the training scheme, and how to persuade workers to complete apprenticeships in the first place. Of the administrative problems, the U.K. had to determine who would set the standards for apprenticeship training, how to inform firms and workers of the “right skills” to invest in, and how to provide suitable pathways to higher-level vocational qualifications. In regards to the cultural/structural problems related to apprenticeship training, the U.K. had to acknowledge the limitations of its economic framework, its cultural overemphasis on receiving a traditional university education, and rectify the focus of corporations and the wider culture on short-term gains with the governments’ desire to attain the long-term benefits of a vocationally trained populace.

The first problem the U.K. had to resolve was that of “poaching externalities” or

“free riding”—a problem inherent to any scheme related to general skills training.

“Poaching externalities,” also referred to simply as “poaching,” occur when the incentive for individual firms to participate in a general system of skills training is weaker than the incentive for firms to “opt out” of the scheme and instead “poach” skilled workers trained by the other firms that choose to participate. The U.K. faced this dilemma in the early

1910’s when considering how to train its workers, as the tendency of U.K. workers to 61 change employers created a positive externality for firms in the sense that firms who did not train their workers could “poach” trained workers—by offering higher wages, better benefits, etc.—from firms who did participate in training (Booth, Snower, and Great

Britain Centre for Economic Policy Research 1996). The non-participating firm would then enjoy the free benefit of skilled labor without any investment of its own. This problem ultimately led to a general under-training of workers. To try and remove this

“poaching externality”, in 1964, the U.K. passed the Industrial Training Act which sought to realign firms’ incentives to train workers by creating twenty-seven Industrial Training

Boards (ITB) to which all firms were supposed to pay a training levy to the ITB of their specific industry and, in turn, their industry’s ITB would allocate grant money for training to the firms that provided training of an acceptable quality and quantity to their workforce. According to the language of the 1964 Industrial Training Act, “An industrial training board may—[…] make grants or loans to persons providing courses or other

[training] facilities approved by the board” (TSO n.d., sec. 2.4.b).The new funding scheme under the Act improved the incentive for firms to invest in general vocational training, since the levy imposed by the ITBs applied to all firms within an industry

(unless a firm secured an exception), meaning that firms would have to pay the training levy regardless of whether or not they participated in training, and could only recoup their money by receiving grants from the ITBs—which they could only receive if they provided quality training that received approval from the ITB. The training levy imposed by the 1964 Industrial Training Act has only since been built upon and refined so that today, only large firms in the U.K. (specifically those with payrolls exceeding £3 million) actually pay the apprenticeship levy—which is charged at a rate of 0.5% of an 62 employer’s payroll—while all firms, large and small, receive £15,000 toward the cost of the levy, which is usually enough to completely cover the levy charged to smaller firms

(“Apprenticeship Levy - GOV.UK” n.d.). The result is that all firms are required to pay for vocational training, but smaller firms—for whom the apprenticeship levy would likely be a greater burden—are essentially compensated, by the government, to train workers.

The U.K. apprenticeship levy system not only eliminates, or at least greatly reduces, the “poaching externality” inherent to general training, but it also eliminates the problem of getting firms with quality in-house training to “buy in” to a general training scheme, because training continues to happen “in-house,” however, now, that training— thanks to the apprenticeship levy—is largely paid for by the government. So firms’ in- house training schemes and the general U.K. training scheme have essentially become one and the same. The apprenticeship levy also answers the question of who is to bear the cost of training, as really only the government and the largest U.K. firms pay for the training scheme; smaller firms and individual workers end up paying very little, if anything for training. Workers are incentivized to not only participate in training, but to work hard and perform well in their position, by the prospect of receiving vocational qualifications that make them attractive to prospective employers. Since workers have to pass a variety of assessments (which vary depending on the sector of the apprentice) to demonstrate their expertise in their specific industry, workers have a reason to pay attention, work hard, study, and practice with the skills and knowledge they receive during their training, so that they can acquire their desired qualifications in order to get hired on by a good firm and, ultimately, receive higher pay than they would without vocational qualifications. 63

Administrative problems are the second category of dilemmas faced by nations attempting to conduct apprenticeship training. The first administrative question that needs to be answered is that of standard setting—or who will be in charge of setting skill standards for apprenticeships in various sectors? In the U.K., standard setting is a mostly decentralized process, with the U.K. Institute for Apprenticeships setting specific criteria for approving the variety of apprenticeships that are created and proposed by firms themselves (Institute for Apprenticeships n.d.). The government’s argument (delivered by the Institute for Apprenticeships) in support of this model of decentralized standard setting is that “[employers] are the people who know best what makes someone competent in the role and what transferable skills an apprentice will need to take the next step after their apprenticeships” (Institute for Apprenticeships n.d.). This unique arrangement between firms and the government not only answers the question of who sets the standards for apprenticeship training in the U.K., but it also resolves the issue of prospective apprentices not knowing what the “right skills” to invest in are. Since firms, with their standard-setting power, know best what skills are necessary for success in their specific industry, they design their apprenticeships to cover all of the “right skills” apprentices will need in their industry in the working world.

Another administrative problem that can arise in providing vocational training is that of providing suitable pathways to higher-level vocational qualifications so that apprentices who complete an apprenticeship and enter the workforce can continue to improve and build upon their skills once they are employed. In the U.K., this dilemma was recently resolved with the introduction of “higher apprenticeships” in 2010 (Keen

2015). Higher apprenticeships are available at National Vocational Qualification levels 4- 64

7, with levels 4 and 5 equating to an undergraduate university education, level 6 equating to a graduate university education, and level 7 equating to a post-graduate education

(“Higher and Degree Apprenticeships - GOV.UK” 2017; City & Guilds n.d.). All U.K. citizens are eligible for a higher apprenticeship, provided that they meet the entry requirements for each level. For example, in order to enter a level 4 apprenticeship, applicants can be required to have “at least five GCSEs grades A-C […] and Level 3 qualifications, including A levels, NVQ/SVQ Level 3, or a BTEC National”; in some industries, applicants can also be required to have taken GCSE exams in subjects related to the specific apprenticeship for which they apply (“Entry Requirements for

Apprenticeships in England” 2017). The requirements for level 5-7 apprenticeships have the same base requirements as level 4, but require even higher qualifications and even greater amounts of previous experience in their particular industry. The pathway to higher apprenticeships in the U.K. is fairly straightforward, with the entire application process laid out on the gov.uk site, including listings of the current higher and degree apprenticeship vacancies (“Become an Apprentice - GOV.UK” n.d., “Higher and Degree

Apprenticeship Vacancies - GOV.UK” 2017).

The final category of training-related dilemmas contains cultural/structural issues that may complicate the process of providing quality vocational training to workers. The first cultural/structural issue that complicates vocational training is the nature of a nation’s economy—referring to whether a nation, if it is a market economy, is liberal or coordinated. In Germany, the “dual” vocational training system that has been widely praised as being a successful model of skills production, owes its success largely to

Germany’s coordinated market economy, which has, over time, created a political, 65 economic, and social context that makes coordinating vocational training much easier.

The U.K., on the other hand, is a liberal market economy, meaning that the relationship between its various economic actors—the government, firms, and workers—is a lot less close, making the coordination of training a bit more difficult, since firms and workers are accustomed to operating through competition, not coordination (Thelen 2004).

Another cultural/structural problem that can affect the effectiveness of vocational training in a nation is a cultural overemphasis on receiving a traditional college education.

Additionally, a cultural/corporate focus on short-term financial gains over long-term social and economic benefits can dissuade a culture from attempting to create an effective, high-quality system of vocational training. Improving vocational training is dissuaded under such a cultural mindset, as a general skills production scheme requires significant investments from firms and the government—investments which, if short-term gains are the priority, will likely never come to fruition, as those entities will not want to sacrifice short-term gains for longer-term benefits.

In order to better understand the various dynamics of vocational training in the

U.K., it is important to first understand how to define certain related terminology. For example, a reader should understand “culture” (i.e. “cultural issues”) as referring to the ways in which U.K. citizens, firms, and institutions interact with and perceive one another on a regular basis and have come to understand one another’s roles in society. A nation’s culture can determine many things, but, in terms of vocational training, culture primarily determines the social and economic context in which vocational training is conducted, as well as determining who regulates, conducts, supports, and receives training. When referring to the social and economic “norms” related to vocational 66 training, one should understand “norms” as referring to any aspect of U.K. culture that is deemed as “normal” by most citizens, firms, and institutions. In terms of vocational training, “norms” can be understood as relating to the nature and various aspects of vocational training that most people and entities in society agree upon as being characteristic of the usual way vocational training is conducted. An “institution” is another important term that can be understood as any societal entity (i.e. a group or an organization) that performs a specific function in society. For example, in regards to vocational training, an “institution” could be an entity that provides vocational training services (i.e. coordinates or offers apprenticeships, etc.), sets vocational training standards (i.e. a regulating agency, etc.), or participates in the education of workers.

Another important term to define is “structure” (i.e. “economic structure”), which should be understood as the arrangement of and relations between the various economic actors that make up the context in which vocational training is conducted [cite online dictionary?]. For example, the “economic structure” in the U.K. consists of the government, which regulates, sets standards for, and funds—through the Apprenticeship

Levy—vocational training; firms that opt to train apprentices, workers that opt to pursue and complete and apprenticeship, and citizens that do/do not support vocational training both as a policy and as a form of skill creation.

With a better understanding of the United Kingdom’s apprenticeship training system, we can now move on to a consideration of the United States’ vocational training system, so that a decision on how to best improve the U.S. vocational training system can be reached.

67

Chapter 6: United States Case Study

While the United States has long been regarded as one of the most powerful economies in the world, it has allowed its economic power to diminish significantly over the years and allowed economic inequality to rise significantly by failing to make a concerted effort to improve its system of vocational training—as many other developed nations have—to better equip its workers for both present and future skill demands. By placing a heavy cultural emphasis on young people receiving a four-year college degree, despite the incompatibility of many students with this path, the United States has failed to meet the growing demands of the modern world and, as a result, many people have fallen far behind—jobless and struggling financially, without the proper skills or abilities to catch up with the rest of the working population. As a result, wages have steadily fallen and economic inequality has grown significantly, as those unable to find “good” jobs have been either forced into low skill, low wage jobs or left jobless. There is still hope, however. Though unemployment is relatively high among portions of the U.S. population without a high school and/or college degree, the U.S. economy has seen recent growth in many of the “trade” industries, with increasing demand for workers with high-level vocational skills. The rapid advancement of workplace technologies—such as computers, robots, machinery, tools and equipment, etc.—is fueling the increased demand for higher level vocational skills throughout the economy as the knowledge and expertise required to operate and work with these new technologies effectively has increased drastically.

Currently, the United States’ economy and education system are ill-equipped to meet this growing skill demand. While many other developed nations today are facing similar trends and turning to improved systems of vocational training to meet the growing 68 demand for advanced vocational skills, the United States has continued to rely heavily on an outdated college-centric model to prepare its workers for a high-tech future.

While vocational skills can range from “lesser” skills—such as cosmetology and bookkeeping—to more “advanced” skills—such as computer engineering and robotics— with an extremely wide range of other skills in between, the growing trend in the demand for skills in the U.S. leans toward the advanced end of the spectrum. Advanced vocational skills, as opposed to lesser vocational skills, are, by definition, more difficult to learn and, as such, it is difficult to meet a growing demand for such skills, especially when a nation’s education system, as in the United States, is so heavily entrenched in providing a general education to its workers, rather than high-quality vocational training in specific, in-demand skills. Many U.S. firms try to pick up the federal government’s slack by conducting “on-the-job” training to try and equip their workers with the skills needed in their industry, but the extent of workplace training in the U.S. is too limited to meet the growing demands for advanced vocational skills throughout the entire U.S. economy.

In order to meet the growing demand for advanced skills, the United States should follow the path of other developed nations and work to develop and implement a stronger system of vocational training across the country. Meeting the growing demand for skills is important not only for the sake of continued economic growth in the United States, but it will also allow the U.S. to further reduce unemployment throughout the country, create jobs, revitalize the American middle class, and help to grow the economy while reducing economic inequality as newly-trained workers begin to receive higher wages thanks to higher levels of vocational certification. Additionally, increasing the amount and quality 69 of vocational training in the U.S. will not only result in higher wages for newly-trained skilled workers, but also in higher wages for unskilled workers, as competition by firms for unskilled, lower wage workers will increase, resulting in a higher average wage for both skilled and unskilled workers throughout the country. Increasing vocational training will also help to protect workers from both future unemployment and economic volatility, as they will be able to market, adapt, and utilize their new skills in many ways to increase their chances of finding employment. Increasing the amount and improving the quality of vocational training in the U.S. is a necessary step to ensuring that America, and her workers, are equipped for success amidst rapid technological change throughout the global economy.

Currently, the United States does not have a coherent, unified, national system of vocational education. In fact, the system is highly-fragmented, taking on many different forms, unlike the vocational training schemes in many other developed nations that tend to take on a more centralized, uniform model of training. Though there is a wide variety of vocational training models in the United States, most of the most common forms can be lumped into three distinct categories: “government-sponsored job training,” “school- based” vocational training, and “school-to-work” training models. “Government- sponsored job training” primarily consists of adult learning centers and military technical training. “School-based” training occurs in formal educational institutions such as high schools/specialized high schools, private “career” schools, community colleges, state

“institutes of technology,” and “school-to-work” programs and primarily adopt an academic, classroom-based model of training. The final category of training is made up of the “school-to-work” models of vocational training, which most closely resemble the 70 vocational training models of other developed nations and consist of apprenticeships, co- operatives, and internships. Each of these models is distinct from the others, but it is important to understand the purposes and nature of each model to be able to fully extend the scope of vocational training in the United States.

To preface this discussion, it is important to understand that, at the federal level, the U.S. government only plays a modest, supplementary role in promoting vocational training. On an annual basis, the U.S. federal government allocates funds in the form of

“State formula grants” and “competitive discretionary grants” that are to be used—as specified under the Carl D. Perkins Career and Technical Education Act—for improving states’ career and technical education programs (“PCRN: About Grant Programs” n.d.,

“Career and Technical Education” 2016). Annually, about $1.1 billion is appropriated for

State formula grants and $25 million for competitive discretionary grants, with the majority of the remaining funding for vocational training in the U.S. coming from the states and local sources.

As far as the various models of U.S. vocational training go, the first group of vocational training models to discuss are the “government-sponsored job training” models that primarily consist of adult learning centers and military technical training.

In the United States, “adult learning” typically refers to programs in the U.S. that focus on teaching basic literacy, numeracy, and English as a language to adults, in addition to college and career readiness and helping adults obtain high school diploma equivalency (World Education, Inc. 2018). Adult learning programs are designed primarily for adults who have only a high-school education or less, or foreign-born immigrants who struggle speaking English—a necessary skill for doing much of anything 71 as an adult in the U.S. As a result, the most common utilizers of adult learning programs are the working poor or those looking for work, high school dropouts, and immigrants with limited English proficiency. Adult learning programs exist in many forms and under many different entities, including free-standing organizations, “school districts, community colleges, individual municipalities, multi-service centers, libraries, faith- based organizations, housing developments, workplaces, and unions” and their education services are usually conducted by part-time teachers and volunteers (World Education,

Inc. 2018). The extent of variation in adult learning programs and opportunities largely depends on the state in which it is conducted. For example, the New York State

Education Department offers “adult career and continuing education services” through its

Adult Education Programs and Policy (AEPP) office (New York State Education

Department 2015). The AEPP office’s mission states that its goal is “to promote, develop, and support adult education programs with the goal of providing adult students with successful pathways and transitions to post secondary (sic) education, apprenticeship training, employment opportunities, and the workforce." The AEPP’s office offers a variety of adult learning programs from those focusing on adult literacy, to apprenticeships, to “distance learning,” where learning takes place with the students and teachers in separate locations; to a program known as “Employment Preparation

Education” that provides state aid for adult learning programs leading to a high school, or high school equivalency, diploma; to public school districts and NY State’s Boards of

Cooperative Educational Services (“Distance Learning” 2015, “Employment Preparation

Education (EPE)” 2015). Maryland also offers adult learning programs and services through its Department of Labor, Licensing and Regulations’ Division of Workforce 72

Development and Adult Learning for anyone over the age of 18 not enrolled in high school (Maryland Department of Labor, Licensing and Regulation n.d.). The Division of

Workforce Development and Adult Learning offers classes across Maryland for individuals to increase their basic reading, writing, and math skills or to learn English as a language, prepare for diploma equivalency testing—specifically the General

Equivalency Diploma (GED) and National External Diploma Program (NEDP) tests— and increase career readiness. While adult learning programs are beneficial for helping working-age adults achieve the minimal numeracy and literacy skills needed to find even a low skill job, and while some states’ adult learning programs do offer some career training in the form of apprenticeships, overall, adult learning programs are not a sufficient means for the U.S. to meet the growing demand for advanced vocational skills.

The other most common form of government-sponsored job training that occurs in the U.S. is military technical training. This style of vocational training is available only to members of the U.S. military and is used specifically for training military members for their military jobs, though the skills utilized in many “military” jobs also have many uses and applications in the civilian world. Each branch of the military has its own technical training school, where soldiers in their respective branches go to learn the skills needed to perform their military jobs. Typically, each branch has a school, sometimes called “A” school, where soldiers go to learn the basics of their specific military job, as well as a school for advanced and specialized training, sometimes called a “C” school, where soldiers can take advanced training courses once they have mastered the basic fundamentals of the specific job (Civil Air Patrol n.d.). Technical training in the military usually lasts multiple weeks, though the full length of job training varies depending on 73 the job, and training concludes at the end of the training period with graduation from the training program. Since the current system of vocational training in the U.S. is so fragmented and weak, many people choose to join the military simply to acquire access to high quality job training, which is usually in high-skill jobs that can result in gainful employment in the public sector upon completion of military service. According to the

U.S. Department of Labor’s Bureau of Labor Statistics, of the 1,085,286 active duty enlisted personnel members in the U.S. military, only 151,501 (or roughly 14%) are classified as “combat specialty,” leaving the remaining 933,785 (or roughly 86%) of active duty enlisted personnel in non-combat job classifications—jobs with skills relevant—either directly or indirectly—to many professions in the working world

(Bureau of Labor Statistics n.d.). The range of non-combat jobs for which the U.S. military offers training is extensive. The U.S. Air Force alone offers hands-on training in over 130 career fields, from electrical engineering, to piloting, to nursing and medicine, to firefighting, to linguistics and many others (U.S. Air Force n.d.). Many of these fields, especially those related to engineering and medicine, are of an advanced technical nature, requiring a high level of skill to be successful. As such, those who receive non-combat job training through a branch of the U.S. military are receiving vocational training of the highest quality, with access to cutting edge, state-of-the-art technologies and high quality instruction. However, while military technical training, as a form of government- sponsored job training, has been effective in equipping military personnel with the skills needed to be successful in their specific military jobs, the requirement of being a member of the military prevents this solution from being an effective means of offering advanced vocational training to the rest of the U.S. population. 74

The second category of vocational training models can be referred to as “school- based” vocational training and includes any vocational training offered through an academic institution such as high schools/specialized high schools, private career schools, community colleges, state institutes of technology, and “school-to-work” programs.

In the United States, many public and private high schools and specialized high schools (i.e. vocational technical high schools) offer courses or entire academic pathways dedicated to equipping students with basic (or more advanced) vocational skills to prepare them for entering a career field right out of high school. The range of careers for which high schools and specialized high schools provide relevant vocational training is quite wide and include various vocations such as plumbing, welding, automotive technology, cosmetology, dental assisting, engineering technology, masonry, graphic communications, and many more (Pannoni 2014). Vocational training in high schools, also known as “secondary” level vocational training, is an ideal academic pathway for any student interested in beginning their career as soon as they graduate high school and many vocational schools at this level do a great job equipping their students with the necessary skills to be successful in their careers. However, vocational training at the high school level has an unfortunate history and a bit of a negative reputation, as vocational high schools and programs were, for a long time, seen as simply a “dumping ground” for low-achieving students or students with behavioral problems, as well as having a history of pushing poor students and students of color into low quality vocational programs to keep them out of more advanced academic classrooms/programs, and ultimately, better jobs (Education Week 2016). Also, the quality of vocational training programs in U.S. high schools has, both historically and today, been questionable. While some high 75 schools, such as Montachusett Regional Vocational Technical School in Fitchburg,

Massachusetts, have extremely positive reputations and are competitive, with hundreds of students applying annually for a limited number of spots, many other vocational programs and high schools have lesser reputations and struggle to find students (Pannoni

2014). Vocational training at the high school level can also take on several different forms—some training takes place at stand-alone vocational high schools, but training can also take place in traditional high schools which typically offer a wide selection of vocational education courses, though many of these classes are elective courses that must fit in with a full academic course load. Other school districts allow their students to attend a career-tech center or community college for part of the school day to receive vocational training in a career the student is interested in (Pannoni 2014).

Aside from the varied levels of quality and success vocational high schools in

America experience, overall enrollment in secondary vocational training programs is declining nationwide. This decline is due to several factors, primarily a lack of qualified teachers or instructors, limited budgets, high operational costs, as well as an increase in the number of core academic requirements students in many schools must complete in order to graduate, limiting the amount of time students would otherwise have to enroll in vocationally-oriented courses (Pannoni 2014).

Vocational training at the high school level, while a valuable mechanism for equipping American youth with the skills needed to be successful in the working world, is not well-suited for addressing the greater skill needs of the entire U.S. population.

While a continued effort should be made to maintain and improve vocational training programs in U.S. high schools, the primary focus for improving American vocational 76 training should be at the post-secondary level, as a viable alternative for college-age students and workers looking to update their skills or acquire new skillsets.

Private career schools are another example of “school-based” vocational training.

These schools are private institutions that offer specialized job training and job certification, often operating under a for-profit model. These institutions can cover a wide range of occupations—from cosmetology, to bartending, to nursing, to graphic design and computer science. Though private career colleges exist for a wide variety of jobs, individual institutions are usually oriented towards one specific job or industry, such as business or cosmetology. Completion of training at a career college results in a certification for the job the training was geared toward. While there are many for-profit career colleges that offer quality training and have alumnus successfully working in a career, there are many career colleges that offer lower quality training and cause issues for their students when it comes to things like transferring credits to other institutions

(Smith 2016). For-profit career colleges also do not always have the best training instructors, as some of these institutes only require instructors to have an associate’s degree in their field, rather than having high level official certification or an advanced academic degree. As such, for-profit career colleges, while there are some reputable institutions in this category that offer high quality vocational training, are not always the best means of providing vocational education. In terms of the viability of adopting the training model of for-profit career colleges in order to produce the supply of advanced vocational skills necessary to meet growing demand in the U.S. economy, this model does not seem to be the most viable option. 77

“School-based” vocational education also occurs at community colleges throughout the United States. Community colleges can often offer a wide variety of vocational programs, which offer training and certification in specific career fields (e.g. automotive repair, plumbing, welding) (Boyington 2016). While many community colleges offer vocational training programs directly through the colleges themselves, it is also possible in some cases for students to complete their vocational training at a technical school and then, if the two institutions have an “articulation agreement”—a partnership to coordinate and accept the transfer of credits to and from one another—the student can transfer their credits from the technical school to work towards completing a full degree at the community college (Boyington 2016). In Colorado, for example, students that earn a vocational certificate from a technical school can transfer their credits to the Community College of Denver and attend the college to finish whatever classes are needed to earn a full degree in their program, if available (Boyington 2016). Community colleges work well as sites for vocational training programs, since many community colleges have close ties to their surrounding communities and often work with local employers to determine local skill needs and design courses and degree programs to help equip students with skills that will improve their chances of obtaining gainful employment in their community (Simon 2012). Examples of such coordination at the local level can be found in community colleges in Nevada that are responding to local demand for health care services by increasing the number and improving the quality of their nursing programs. Community colleges in Florida are also responding to growing local demand, specifically in the fashion industry, by providing more programs related to the fashion business. The credentials awarded to students that complete a vocational 78 program at a community college are typically either a “long” or “short” certificate, which require at least one full year of full-time study or less than one year of full-time study, respectively (Soliz 2016). The benefits of community college vocational programs include both the acquisition and certification of vocational skills in a relatively short period of time, as well as the close coordination with local employers and access to local labor markets that typically come with studying at a community college. Community colleges are typically an effective means of providing vocational education, owing largely to their lower cost of attendance (compared to traditional four-year universities and more-specialized technical schools), as well as their close ties to local communities and, in many cases, local employers. To become an even more effective source of vocational training, however, community colleges across the U.S. should focus on developing close relationships with local employers (if they do not have them already) to work together to create/improve vocational curriculum based on the skill needs of both the local labor market and the wider, national labor market.

Technical schools, also known sometimes as “trade” schools, are another means of acquiring a vocational education in the United States. While similar in nature to the for-profit “career” schools discussed earlier, technical schools differ in that they do not operate for profit and typically offer higher quality training. Technical schools typically focus more on the theory and science behind a profession, relying primarily on textbooks and manuals to teach students, as opposed to the hands-on skills application characteristic of more vocationally-oriented programs (Seattle PI n.d.). These programs usually run for two years and result in either an associate degree, a pre-bachelor’s technical degree, or a certificate. Most technical colleges focus on preparing students for immediate 79 employment upon graduation, while others are designed to prepare students to transfer into a four-year program (“Institute of Technology (United States)” 2017). Some technical schools operate as public, non-profit institutions, while others, such as ITT

Technical Institute, operate as for-profit organizations. Technical schools cover a similarly wide range of industries/professions as do other vocational training programs

(i.e. manufacturing, health care, business, etc.) but many of the top technical schools in the U.S. focus on professions in health care (e.g. nursing) and manufacturing (mechanics, welders, etc.) (Coudriet 2017). While U.S. technical schools offer similar benefits as other vocational education programs (i.e. quicker degrees/certification, connections to potential employers, acquisition of in-demand skills, etc.), two of the biggest potential downsides are the cost (some technical schools have tuition costs similar to four-year universities) and the limitation of learning primarily from textbooks and manuals, rather than hands-on experience with a real-world employer offered by other kinds of vocational education programs. While technical schools can be highly effective at preparing their students for obtaining a job in the real world, their heavy focus on textbook learning, as well as their potentially high costs of attendance, make technical schools less ideal for equipping America’s populace with the skills needed to meet the U.S.’ rapidly growing high skill demand, than other vocational education models.

State institutes of technology are another form of “school-based” vocational training. Most state institutes of technology have been around for quite some time, with many established as far back as the mid-19th century (“Institute of Technology (United

States)” 2017). Commonly called “Institutes of Technology,” “Polytechnic Institutes,”

“Polytechnic Universities,” or “Universities of Technology,” state institutes of 80 technology are usually research-intensive universities, focusing primarily on fields related to science, technology, engineering, and mathematics. Some state institutes of technology offer advanced degrees such as Doctor of Philosophy (PhD) and Doctor of

Science (DSc), differentiating them from most other “school-based” models of vocational education in both the intensity of learning and the level of certification/degrees available.

Compared to the other models of “school-based” vocational education, state institutes of technology are likely the least effective solution for solving America’s growing skill demand, owing largely to these institutions’ close similarity to other four-year traditional universities, to which are inaccessible to many Americans, especially those typically targeted by vocational education programs. Earlier in the 20th century, technical schools offered basic vocational instruction to students, but, over time, as technologies became more complex and the skills required in the workplace became more advanced, technical schools shifted their focus upward, focusing on more advanced, college-level skills.

The third and final category of vocational education models in the U.S. are the

“school-to-work” models, which encompasses training models such as apprenticeships, cooperative education (“co-ops”), and on-the-job training, and can loosely include internships as well (“School-to-Work Transition” 2016). Since the extent of on-the-job training in the U.S. is too limited to meet the growing demands for advanced vocational skills throughout the entire U.S. economy, this model will be omitted from more in-depth discussion. Internships, as a form of vocational training, are typically less organized and skill-focused than apprenticeships and cooperatives, in addition to being limited in the capacity with which interns can contribute meaningfully during their internship, and are not always related to the career trajectory of their interns. As such, an extended 81 discussion of internships will be omitted as well. Apprenticeships and cooperatives, though slightly different in nature, are both effective means of equipping students with relevant vocational skills and will be discussed in further detail.

Cooperatives, or co-ops, also known as “cooperative education” or “cooperative learning” programs, are similar to other “school-to-work” programs in that students are able to obtain hands-on experience by working directly for a firm in their career field.

Cooperatives are typically offered through universities who have partnered with firms in various fields (most often in engineering and technology, though some programs do exist in business, liberal arts, and other fields) to develop their cooperative learning programs

(Boyington 2015). Most universities that offer cooperative learning programs typically require students to complete at least two co-ops in order to graduate. Cooperatives are usually at least three to twelve months in duration and are typically paid. During a co-op experience, students stop taking classes at their university in order to work for their co-op firm full-time. Since co-op students are considered full-time paid employees at their firm for the duration of their program, they are able to invest more time into their experience and are often allowed to work on big projects, putting cooperative students into a position to contribute significantly to the organization for which they work. The time commitment and accessibility of cooperative learning experiences alone give co-op students a more comprehensive work experience in their field than an internship, for example; offering cooperative students a more thorough look at their prospective career field and giving them a competitive edge over their peers with no such experience. While cooperatives have proven to be an extremely effective means of equipping students and workers with the advanced skills necessary for success in the modern workplace, given that most 82 cooperative learning experiences occur in conjunction with a traditional four-year university, the cooperative learning model is not necessarily the best solution for improving the U.S. system of vocational training as a whole.

Apprenticeships, as discussed in previous sections of this document, are a form of

“school-to-work” vocational training where students, or “apprentices,” can obtain hands- on work experience and develop vocational skills by working for a firm in their field of interest. During their apprenticeship, apprentices receive instruction from skilled workers in their field and develop their skills by working with training equipment and other tools and machinery. Currently, in the United States, there are over 505,000 apprentices participating in more than 21,000 registered apprenticeship programs nationwide (U.S.

Department of Labor Employment and Training Administration n.d.). Nearly half of current U.S. apprentices (~206,000) entered the U.S. apprenticeship system in fiscal year

2016 alone, representing a massive increase in apprenticeship enrollment compared to previous years. According to the U.S. Department of Labor’s Employment and Training

Administration, “Registered Apprenticeship” programs can be sponsored by individual employers, a group of employers, or an industry association, all of which occasionally partner with labor organizations to set up apprenticeship programs, though the role of labor organizations in U.S. vocational training is less extensive than in other advanced nations. U.S. firms who sponsor an apprenticeship program, whether individually or as a larger group or industry, invest significant amounts of time, money, and energy into designing and executing these programs, creating open positions for apprentices, overseeing training development, and providing hands-on learning and technical instruction to their apprentices. Sponsoring an apprenticeship program in the U.S. is done 83 solely on a voluntary basis, often times with support from other invested groups such as community-based organizations, educational institutions, and other stakeholders.

Apprenticeship standards concerning things like related classroom instruction and paid on-the-job training are set by the program sponsors and then registered officially with either the federal Office of Apprenticeship or a State Apprenticeship Agency recognized by the U.S. Department of Labor. Apprenticeship agreements act as a contract between program sponsors (i.e. training firms/organizations) and apprentices, allowing both actors to officially agree upon the standards and requirements of the apprenticeship program.

Successful completion of a registered apprenticeship program results in a nationally- recognized certificate of completion issued by the program’s industry, allowing graduated apprentices to take their newly-acquired skills anywhere in the country, increasing their overall chances of employment.

Currently, the U.S. government boasts of “a network of over 150,000 employers in more than 1,000 occupations” across nine industries including advanced manufacturing, construction, energy, finance and business, healthcare, hospitality, information technology, telecommunication, and transportation (U.S. Department of

Labor n.d.). Current apprenticeship program partners include a wide variety of businesses, educational institutions, and other groups such as Ford, Pepperidge Farm,

Siemens, Rutgers University, the University of Michigan, Nestle, Dow, the Association for Career and Technical Education, Central Piedmont Community College, the

International Union of Bricklayers and Allied Craftworkers, and many more.

Siemens USA is a subsidiary of Siemens AG, a German-based manufacturing giant with a global reach that is one of the world’s leading producers of energy-efficient, 84 resource-saving technologies including systems for generating and transmitting power, as well as those used for medical diagnosis (Siemens USA n.d.). Siemens USA is also one of the biggest proponents of “dual” style apprenticeship training in the U.S., launching their own “dual” style apprenticeship program in 2010 at their factory in Charlotte, North

Carolina, where they build gas and steam turbines and generators for energy production, with plans to soon expand their apprenticeship program into four additional states (CNBC

2017). Apprentices at Siemens USA begin right after high school, joining the company as an apprentice and beginning paid work right away while simultaneously attending a local community college where apprentices will earn an associate’s degree through a curriculum created by Siemens USA in conjunction with the college. Siemens pays for apprentices’ tuition and book costs, enabling apprentices to emerge from the Siemens

USA apprenticeship program after four years, debt-free, with money and experience from four years’ worth of work, in addition to having an associate’s degree, a nationally- recognized certificate of completion, and guaranteed future employment at Siemens. For students who might otherwise have been stuck in a dead-end, low-paying, low skill job, the apprenticeship program at Siemens is a fantastic opportunity to gain marketable skills and extensive work experience, as well as a degree and a certificate, all without ever having to be saddled with college debt and the uncertainty of finding gainful employment, post-graduation.

With a more thorough understanding of the various models of vocational training that exist within the U.S., we can now discuss the funding mechanisms that exist to support this wide variety of vocational training models. 85

Vocational training in the United States is extremely decentralized due to the nature of the various mechanisms and sources used for funding vocational training programs throughout the country. The U.S. federal government, for example, plays a minimal role in funding the multitude of vocational training programs throughout the

United States. The majority of the federal government’s contribution to vocational training funding comes from the Carl D. Perkins Vocational Training Act of 2006, in which states simply receive a designated amount of funds each year to improve and maintain their various vocational training programs, but the style of vocational training is ultimately left up to the discretion of the individual states. The U.S. federal government also provides funding specifically for adult learning programs under the 2014 Workforce

Innovation and Opportunity Act (WIOA) (113th Congress 2014). Under the Act, “each eligible agency shall use funds made available […] to develop or enhance the adult education system of the State or outlying area” through “The alignment of adult education and literacy activities with other core programs” for “the development of career pathways to provide access to employment and training services for individuals in adult education and literacy activities” (113th Congress 2014). In addition, WIOA funds are also to be used for “The establishment or operation of high quality professional development programs,” “The provision of technical assistance to eligible providers of adult education and literacy activities,” and “The monitoring and evaluation of the quality of, and the improvement in, adult education and literacy activities” (113th Congress

2014). Under these guidelines, states are allowed to use their funds to provide and improve adult learning programs however they see fit. 86

The U.S. government also provides financial assistance to U.S. workers who lose employment due to foreign competition (i.e. a U.S. factory closes because it can no longer compete with foreign firms) through the Trade Adjustment Assistance program.

According to the U.S. Department of Labor’s Employment and Training Administration,

“the [Trade Adjustment Assistance] program seeks to provide adversely affected workers with opportunities to obtain skills, credentials, resources, and support necessary to

(re)build skills for future jobs” (U.S. Department of Labor n.d.). Affected workers covered under this program have access to job training services, in addition to income support and special allowances to aid with the costs of job searching and relocation.

Having explored the various models of vocational training in the United States, as well as some of the various funding mechanisms used to support the U.S. vocational training system, we can now move on to a more in-depth discussion of some of the specific problems related to vocational skills production in the U.S.

87

Chapter 7: Vocational Training Problems in the United States

While vocational training has existed in the United States in many forms for quite some time, vocational training in the U.S., as the system exists today, is insufficiently prepared to meet the growing demand for advanced vocational skills brought on by steadily increasing numbers of complex and complicated machinery and technology in the American workplace. As technological innovation and advancement in the workplace continues to raise the minimum skill standards for many jobs in America, it is important that the nation’s system of vocational training can keep up and supply the number of highly-skilled workers the U.S. economy needs to maximize production and efficiency and remain competitive globally. This is especially important considering that technological innovation and a higher degree of automation in the American workplace will cause certain jobs with specific skills to disappear entirely, completely changing the kind of vocational skills required for American industries to remain productive and competitive. In the face of this dilemma, the U.S. must become better able to “look forward” and predict the kind of skill demands there will likely be in the near future, so that the American system of vocational training can adjust accordingly and produce the skillsets necessary for the U.S. to “stay ahead” of future demand. However, the school- based American system of vocational training, as it currently exists, faces many different problems on many different fronts that prevent the American system from being better able to meet current skill demands and adjust to potential future demands. Federal, state, and local governments; industries, individual firms, workers, etc.—all of the actors involved with vocational training in the U.S. face certain problems related to skills production. And while the United States does contain some good examples of successful 88 school-based vocational programs at the local and state scales, the wider, national system of vocational training, as it currently exists, is not enough to meet the growing skill demands faced by many different U.S. industries. The United States should look to its few successful examples of school-based vocational training as inspiration for improving its wider, national vocational training system in order to better prepare itself to meet growing skill demands. This section seeks to explore the various problems related to vocational training in the U.S. and will conclude with a comparative analysis of vocational training in the U.S. versus the training schemes of Germany and the United

Kingdom.

The coordination and regulation of vocational training is a complex process that can be greatly affected by problems and dilemmas that occur at various scales of society, from the local scale, to the state scale, all the way up to the national/federal scale. At each of these levels, there are unique dynamics and relationships between actors such as firms, workers, and the government that can affect the pool of potential solutions available at that specific scale. Local-scale problems, while sharing many similarities to problems faced on the larger state and national scales, also differ in their own unique way from the problems faced on the other scales. The same can be said for the problems that can occur on the state and national scale—while sharing similarities to problems faced on the other scales, they each have their own unique problems that can only be resolved through appropriate entities at their specific scale. How these unique problems are resolved at their specific scales can have serious implications for the structure of a nation’s system of vocational training. Understanding the kind of problems that arise on each scale of 89 society can help to determine what the best course of action might be for resolving all of these problems with a comprehensive policy solution.

Since most vocational training takes place in the realm of local governments—at local community colleges, technical schools, career colleges, etc.—the problems faced by government and industries at the local level can have profound implications for the potential success or failure of the national system of vocational training. Understanding the kind of problems local governments face can shed light on what kind of structural changes might need to be made to the wider system of vocational training in order to improve its rate of success. For many local governments, a primary issue is that of unemployment throughout the community. As a result, local governments try to create effective systems of vocational training to help the citizens of their community acquire the skills necessary to find stable, good-paying employment. However, designing an effective system of vocational training is no easy feat and, as such, several additional problems can arise. One problem in many communities is a lack of effective training or vocational learning opportunities. If a community lacks a reputable community college or technical school, then students and workers might not have anywhere to go to obtain additional vocational skills and improve their employability. Another closely related problem is that some communities simply lack firms that are willing to train workers, perhaps out of fear that other firms will “poach” the workers they train, or simply because they lack the funds and resources to offer training. Either way, firms reluctant to engage in training eliminates another possible means of equipping the community with advanced skills. Even in some communities fortunate enough to possess potential training institutions such as a community college or technical school, sometimes the available 90 training institutions follow low training standards and/or offer poor quality vocational training, reducing the effectiveness of the training programs offered at those institutions and diminishing the ability of those communities to equip their citizens with necessary vocational skills. Inconsistent training standards and certification also make it difficult for employers to gauge the value (or lack thereof) of any given certificate of completion, because there is no consistent standard for vocational training in the U.S to which employers can compare the certifications they receive from job applicants. Even when a community’s local institutions are highly reputable, sometimes those institutions simply lack the necessary funds and resources to offer quality vocational training programs.

Many communities also lack effective coordinating mechanisms for helping local colleges, firms, and government coordinate vocational training and related things such as training curriculum, apprenticeships, financial aid, etc. Another problem local governments often face when it comes to vocational training is a general lack of knowledge throughout the community regarding the “right skills” to invest in. If community members are not sure what skills are in-demand, then they will be unable to make informed decisions regarding the kind of vocational training they might pursue.

Also, local bias against vocational education and “blue collar” work in many American communities prevents people from enrolling in vocational training programs, even if an abundance of high quality programs exists within that community. Each of these problems create significant dilemmas for local governments seeking to improve their systems of vocational training. In order for effective training to occur, all of the actors— firms, government, workers, etc.—must coordinate with one another to devise high quality training curriculum, arrange apprenticeship opportunities, and set consistent, high 91 quality training standards for everyone to follow. Each of the problems mentioned above would prevent the necessary process of close coordination among actors from occurring, preventing local governments from developing high quality vocational training programs.

Many of the same problems exist on the state level, though at this scale, state governments have a bit of a wider view than local governments when it comes to coordinating vocational training—which can prove to be either a blessing or a curse, depending on the circumstances. Unemployment throughout the state is the main reason many state governments seek to improve their system of vocational training, however several other dilemmas often arise as well. While states typically contain many different

“sources” of vocational training—such as community or technical colleges, or even simply firms that have their own apprenticeship programs (although apprenticeship programs are rare in the U.S.)—if these training programs lack coordination, then the effectiveness of a state’s comprehensive vocational training system will be seriously lacking. Also, if the existing training institutions within a state are of low quality and follow training standards inconsistent with other training programs in the state or within their industry, then any vocational training that takes place will have reduced effectiveness and make it difficult, if not impossible, for employers to have faith in the quality and validity of the certifications they receive from potential hires within the state.

Inconsistent training standards, aside from reducing the overall effectiveness of training, create additional problems for students such as the inability to transfer credits or providing training beneath the acceptable skill standard in the students’ prospective industry. Another problem at the state level in many states is the “abuse” of the state’s vocational training system by “for-profit” career colleges that accept student financial aid 92 but offer low quality training or training of a standard less than the required minimum in each industry, as well as making it difficult, if not impossible, for students to transfer their credits to other training institutions, wasting students’ time and energy, in addition to failing to produce the skilled labor desperately needed by the state economy. Some states simply lack effective options for vocational training, although this problem is likely very uncommon, since most states have an abundance of firms and academic institutions engaged in vocational training, some of which are bound to offer effective training.

On the national scale, the problems related to vocational training can differ greatly from those faced at the local and state levels, but many of these problems occur in some form on all three scales. Since the federal government is the sole governing authority on the national level, many of the solutions to vocational training problems on the national scale rely solely on actions taken by the federal government. The biggest problem faced on the national scale is nationwide unemployment and a high demand for advanced vocational skills accompanied by an insufficient supply of highly skilled workers. As such, the federal government seeks to resolve the unemployment program by improving its vocational training system to equip workers with the advanced skills that the national economy and many industries desperately need. However, the second biggest problem on the national level—the highly fragmented nature of the comprehensive U.S. vocational training system—prevents the federal government from effectively addressing its unemployment problem and meeting the demand for advanced vocational skills. Much of the fragmentation in the U.S. system of vocational training stems from a third problem faced at the national level—a widespread lack of effective coordination between local, state, and federal governments; industries and individual firms, academic institutions, 93 training providers, and labor unions and workers. Since coordination is lacking between these entities, the U.S. system of vocational training is not operating as efficiently or effectively as it potentially could. Resolving the fourth problem the federal government faces on the national scale—inconsistent training standards within/across industries— could help to resolve some of the other issues previously mentioned, as the coordination between firms, labor, the government, and other relevant entities necessary for creating a consistent training standard for all vocational training in the U.S. would create a set of circumstances that make it possible to reduce fragmentation and improve coordination throughout the U.S. vocational training system. Finally, even if the federal government was successful in improving coordination and standard-setting, the widespread cultural bias against vocational training and “blue collar” work in America would still stand in the way. In order to overcome this bias and improve vocational education’s reputation in the eyes of the American public, coordination among the related actors must be improved and consistent industry-wide training standards must be set, so that vocational training can be seen as a legitimate alternative to a traditional college education for receiving skills that will lead to a stable, good-paying job.

Together, the problems faced on the local, state, and national scales in the U.S. create significant barriers to improving the U.S. vocational training system. While resolution of these problems would significantly improve vocational training in the U.S., there are additional problems related more closely to firms and workers that also stand in the way of improving the U.S. system of training.

The first category of additional problems can be considered as “incentive” issues preventing firms from engaging in vocational training. One reason many firms are 94 reluctant to engage in a more wide-spread system of vocational training is that they already have their own effective in-house training programs and, as such, have no need to buying into a new system of training that may or may not be better than the one they already have. Also, firms fear “free-riding” from other firms that refuse to participate in vocational training but then “poach” workers trained at firms that invested significant time, energy, and money in training their workers. In such an instance, firms who would otherwise be willing to offer training would choose not to, out of fear that their investment in their workers would not be protected or that a coordinated system of training among firms could be abused by firms who refuse to contribute but reap the benefits anyway. Another problem that some firms, especially smaller firms, face is a lack of the capital necessary to invest in a wider system of vocational training, which prevents their participation in and contribution to the training system, despite their interest in participating.

Workers also face their own particular set of problems regarding vocational training. The first problem is the poor reputation of many vocational training programs in the U.S., especially at the high school level where vocational training high schools are often viewed as “dumping grounds” for low-achieving students and students with behavioral issues. A poor reputation often keeps many people from seeking a vocational education, despite the high chances for success and gainful employment upon completion of their training. Also, there is an overemphasis in contemporary American culture on young people attending a traditional four-year college to receive an academic bachelor’s degree, despite the massive, growing demand for advanced vocational skills in the U.S. economy. The cultural overemphasis on attending a four-year college also reinforces the 95 negative perception of vocational training, as it prevents people from seeing the value in obtaining a vocational education in a period of high demand for such skills. Many workers also simply lack knowledge about the “right kind” of vocational skills to invest in, due to a lack of reliable information sources regarding which skills are in high demand. Workers need to know which skills, exactly, are in demand so that they can pursue an education in the right vocation, rather than acquiring vocational training for an industry with little demand for new workers. There is also often uncertainty about whether a vocational education will result in gainful employment upon completion of training, although, in a high quality, heavily-coordinated system of vocational training, this problem would be nearly non-existent, as the system would inherently create networks between employers and workers that workers could use to their advantage to obtain gainful employment. Another problem some workers face is that some vocational training programs and schools are simply too expensive for them to afford, although a proper system of financial aid could help to remedy this problem.

There are also several, more general problems facing the United States in regards to vocational training. First, the fragmentation of the U.S. vocational training system, as mentioned before, and the lack of wider cooperation and coordination among firms, workers, the government, and other invested institutions creates a significant barrier to effective vocational training in the U.S. Also, the potential cost of a wider, national system of coordinated vocational training is likely too cost-prohibitive or just plain unpopular among government officials who opt to maintain the status quo rather than pour money into a system that has no guarantee of improving U.S. vocational training to any significant degree. Individual states could also see attempts by the federal 96 government to create a national, coordinated system of vocational training as a violation of “states’ rights” by removing states’ autonomy in the decision-making process regarding how state governments are to conduct vocational training within their state.

Each of these issues could break any attempt to create an improved, coordinated system of vocational training in the U.S.

One of the biggest issues with vocational training in the U.S.—in terms of effectiveness, as compared to other advanced nations—is the fragmentation of the various mechanisms for coordinating training. Coordination of vocational training is almost nonexistent in the U.S., since its training model is highly decentralized and fragmented, with each involved actor following a different model or set of standards. The U.S. federal government, while being the ideal candidate for heading a centralized, coordinated system of vocational training, plays a relatively small role in the current system of vocational training in the U.S. by simply appropriating funds to each state on an annual basis for the purposes of improving their individual state systems of vocational training, and also making some efforts to try and provide assistance to displaced workers and those who are unemployed. For the most part, the states and local governments within each state are the primary mechanisms for arranging and coordinating vocational training throughout the U.S. However, the problem with this is that the U.S. is facing a national shortage of highly skilled workers, so a fragmented state-by-state system of vocational training is likely incapable of meeting the greater skill demands of the national economy.

In order to truly improve the U.S. system of vocational training, it is necessary to familiarize oneself with the variety of vocational training coordinating mechanisms that 97 exist in the U.S. so that a better, more coordinated model might be created out of the decentralized, fragmented system currently in place.

To begin with, there are a few arguments for why the U.S. should move toward a more coordinated system of training. First, a fragmented system of training with little to no effective coordination exposes the entire system of training to potential overlap, duplication, and waste, which could otherwise be eliminated or mitigated with better coordination among training providers (Grubb and McDonnell 1996, 253). Second, greater coordination among the various actors engaged in vocational training could provide trainees and other relevant actors with a host of complementary services that would draw on the strengths of multiple programs and, together, be more effective than any service offered by a single program. Another argument for greater coordination is that a highly fragmented system of training makes it hard for potential trainees and

“clients” to determine the full range of available programs and the efficacy of any single program. This is how issues arise like trainees who receive training from a proprietary

“career” school being unable to transfer their credits to a different training program or institution, resulting in a significant waste of time and money for all involved. With a more coordinated system, the standards of each program would be more uniform, so the expectations and results of each program would be more similar than they are today.

Another similar issue is simply the overwhelming number of different training programs that exist in the U.S., with some programs offering primarily advanced skill training (i.e. state institutes of technology), others offering primarily low-skill training (i.e. cosmetology schools), and all of those in between offering a variety of training programs with differing levels of efficacy and skills offered. 98

In order to truly improve the U.S. vocational training system to the necessary degree required to meet the growing demand for advanced vocational skills, the U.S. will need to find a way to increase cooperation and coordination between firms, workers, the government, communities, academic institutions, etc. With a better understanding of some of the problems inherent in the U.S. system of vocational training, we can now consider some policy alternatives for best improving the U.S. vocational training system.

99

Chapter 8: Alternative Policy Solutions

Overhauling an entire nation’s system of vocational training is no easy feat, especially when it follows a highly fragmented model of training and is located in a nation as large and complex as the United States. However, a thorough understanding of the key problems and challenges confronting the U.S. vocational training system—in addition to a healthy dose of inspiration from the successful training models of Germany and the United Kingdom—can help us to devise a set of policy alternatives to consider for improving vocational training in the U.S. A new policy approach to vocational training is necessary in the U.S. in order to supply the growing demand for advanced vocational skills spurred by technological innovation in the American workplace. More importantly, however, a new policy approach to U.S. vocational training is necessary for truly reducing economic inequality in the U.S., as an improved system of vocational training creates opportunities for people who are unemployed, underemployed, or of lower socioeconomic status to gain the skills necessary for obtaining higher paying jobs, which will help to lessen the wage gap in America. Additionally, creating new vocational training opportunities will reduce the number of people vying for low-skill, low-wage jobs—as there will be new opportunities for obtaining higher paying jobs—ultimately increasing demand for low-skill workers and resulting in a wage increase across the board for all remaining workers in low-skill, low-wage industries, further reducing economic inequality in America. Four policy alternatives will be explored: a Germany- inspired policy alternative, a U.K.-inspired policy alternative, a federally-coordinated and

-organized “school-based” American policy alternative, and a “hybrid” American policy alternative. Both the Germany- and U.K.-inspired policy alternatives will look at adapting 100 the original German and U.K. training models as closely as possible to the U.S. context.

Later on, I will develop some policy alternatives that do not fully adopt either the

Germany or U.K. models, but instead build upon the most useful aspects of both models that will be integrated into the final, preferred policy for improving vocational training in the U.S. At the end, I will identify a preferred policy alternative and provide an explanation of why the three non-preferred policy alternatives would not work well in practice in the American context and why the preferred alternative is the better policy solution.

Germany is widely regarded as having one of the most successful national systems of vocational training in the world. The German model, often referred to as a

“dual” system of vocational training, is based on a highly-coordinated system of apprenticeship-style training coupled with theoretically-focused classroom instruction. In the German “dual”-style system, students are hired on as apprentices with local firms, apprenticing a few days a week to gain hands-on work experience, while simultaneously enrolling in related courses at a local vocational training school to gain a more theoretical understanding of their specific trade. Receiving both hands-on experience and theoretical instruction in their field benefits German apprentices by allowing them to develop and hone their hard skills while also gaining a more comprehensive and theoretical understanding of the skills, tools, and machines they will use in their job on a daily basis.

While the social, economic, and political context surrounding the development and evolution of the German vocational training system differs greatly from the context found in the United States, there are certain ideas and concepts from the German system that could be adapted and applied to improve the U.S. vocational training system. 101

A Germany-inspired solution to the U.S. problem would focus primarily on increasing the number of “dual”-style training programs available in the U.S. by incentivizing U.S. firms to begin offering apprenticeship opportunities and spurring greater coordination between firms and academic institutions to create a suitable curriculum to coincide with the new apprenticeships made available to students.

However, in order to begin developing this kind of vocational training model in the U.S., the first question that must be answered is that of standard setting—more importantly, who sets the standards.

In Germany, labor unions and employers’ associations work closely with a federal agency, known as the “Federal Institute for Vocational Education and Training,” or

“BiBB,” to standardize and update all training, testing, and certification (Thyssenkrupp

2017). The actual training standards are set primarily by the labor unions and employers’ associations, with the BiBB playing more of a supportive role in upholding and reinforcing the standards decided upon by the unions and employers’ associations. Since training standards are set at the industry level in Germany, they do not tend to vary much from firm-to-firm, allowing for greater consistency in training throughout each industry.

This also means that skills in Germany are more easily transferrable if a worker should ever move to a new company in the same industry.

In the U.S., a similar federal agency could be set up to work specifically with employer’s/industry associations and labor unions in the U.S. in order to determine what skills are in high demand and then set national training standards, devise nationally- standardized training exams, and standardize certification in order to create a system capable of meeting those skill demands in an efficient and effective manner. Similar 102 agencies could be set up at the state level specifically to work with and guide local firms in setting up their own apprenticeship programs, as well as to connect them with academic institutions in their community, such as local community colleges or technical schools.

Once a relationship is established between local firms and local schools, they can work together to devise curriculum in line with the national standards in order to create a

“dual”-style vocational training system here in the U.S. that would give apprentices the benefits of both hands-on training and theoretical study in order to greatly improve their understanding of their specific vocation. Coordinating agencies could be set up in each state to help coordinate curriculum development between local firms and community colleges. The curriculum would be developed so that apprentices learn a theoretical concept during their in-class time and then reinforce their knowledge of that theoretical concept by applying those concepts to the hands-on portion of their apprenticeship training. Classroom instructors and shop-floor instructors would then communicate regularly with one another and share progress reports for their apprentices to make sure that their apprentices are staying on track and learning the concepts they need to learn to successfully complete their apprenticeship. Both classroom and shop-floor instructors, prior to receiving any apprentices to train, would be required to receive a “masters” qualification, the examination for which would be designed by each specific industry, and upon obtaining this qualification, classroom and shop-floor instructors will be deemed sufficiently qualified to instruct and be able to begin receiving apprentices to train.

National certification examinations could be conducted at any academic institution involved in the “dual”-style apprenticeship system and all program certificates 103 would be standardized and nationally recognized. The national examinations can be split into two sections: a paper test based on the theoretical concepts apprentices learned during the classroom portions of their apprenticeship, and a hands-on demonstration of their skills using actual equipment on the shop floor. In order to receive certification in their specific trade/industry, students would be required to successfully complete both sections of the examination. Upon receiving the certificate of completion for their program, apprentices would then be able to take their skills and certification anywhere in the country and find gainful employment.

While the German “dual”-style model of training has been quite successful in

Germany, there are certain “pros” and “cons” to implementing a similar model in the

U.S. One benefit of the “dual”-style system is that it couples hands-on experience with classroom instruction, which helps workers to develop a more comprehensive understanding of the skills, tools, and machines they use on a daily basis, allowing them to work more efficiently and effectively on the job. Also, by adding an academic component to vocational training, the German “dual”-style model could help to improve the negative reputation of vocational training and “blue collar” work in the U.S. by elevating vocational training to a higher status as a viable post-secondary alternative to a traditional college education. Also, by relying primarily on coordination between labor unions and employers’ associations to set training standards, with the government playing a largely supportive role in enforcing those standards, the German “dual”-style model creates consistency among the training standards followed by most firms within any given industry, creating a more effective vocational training system overall. 104

There are also some potential drawbacks to implementing this model in the U.S.

The primary concern is that U.S. labor unions are extremely weak and have relatively little influence over industry, which creates a significant barrier for the viability of this model as a policy solution, considering the central coordinating and standard-setting role of labor unions in the success of the “dual”-style training model in Germany. Another concern is that creating the kind of coordination between firms and academic institutions necessary for successfully implementing a “dual”-style vocational training program in the

U.S. might prove too difficult to accomplish. Firms and academic institutions do not have the same kind of close historical relationships in the U.S. as they do in Germany and, as such, it will likely prove difficult to recreate those same kind of firm-school relationships in the U.S. on a large enough scale to improve U.S. vocational training to the degree necessary to meet the growing demand for advanced vocational skills. Since the U.S. lacks the same kind of social and cultural dynamics between labor and industry that allow the “dual”-style model to be so successful in Germany, integrating “dual”-style vocational training in the U.S. as-is might result in less success overall in terms of significantly improving the U.S. vocational training system. So, while a vocational training system based on an “as-is” version of the German “dual”-style apprenticeship model is one policy alternative for improving vocational training in the United States, its success relies too heavily on historical social dynamics and contexts that have never existed in the U.S. As a result, it is not the preferred policy alternative for improving the

U.S. vocational training system.

Another alternative solution for improving vocational training in the U.S. could be based on the system of vocational training in the United Kingdom. The U.K. was 105 inspired by the success of the German “dual”-style apprenticeship model of vocational training and attempted to adapt the German model into the context of the United

Kingdom. However, because of significant differences in their respective institutions and histories, the U.K. had to significantly modify the German system of training to better fit the U.K. context. Since the U.K. and the U.S. are both considered liberal market economies (while Germany is considered a coordinated market economy), it makes sense to look at the system that resulted from the U.K.’s attempt to adopt the German model of vocational training as inspiration for improving vocational training in the U.S.

In the U.K., apprenticeships are offered by firms who have a desire to take on apprentices, which many firms do, as apprentices contribute to some degree to the firm’s productivity and production during their apprenticeship, but at a reduced pay rate than a regular worker would be, reducing the cost of business for firms and creating an incentive for them to hire apprentices. Standard-setting for apprenticeships in the U.K. is a decentralized process whereby the federal Institute for Apprenticeships sets specific criteria for approving any apprenticeship opportunity offered by individual firms. By setting a minimum criteria for firms to follow, the U.K. government essentially sets a minimum standard for all apprenticeship training that occurs in the U.K. How individual firms choose to go about teaching their apprentices the skills relevant to their specific industry is largely left up to the firms themselves, with the justification (coming from the

Institute for Apprenticeships) being that “[employers] are the people who know best what makes someone competent in the role and what transferable skills an apprentice will need to take the next step after their apprenticeships” (Institute for Apprenticeships n.d.). The

U.K.’s “laisse faire” model of standard setting differs greatly from Germany’s more 106 structured, externally-governed approach where the government—in conjunction with firms, industry associations, and labor unions—plays a greater role in setting the standards for vocational training. Funding for the U.K.’s apprenticeship system comes from an “Apprenticeship Levy” that all firms in the U.K. must pay each year, regardless of their level of involvement (or lack thereof) in vocational training. To offset the cost of the levy for smaller firms for which the levy would prove to be a greater burden, the U.K. government gives every levy-paying firm £15,000 (“Apprenticeship Levy - GOV.UK” n.d.). The levy itself is then used to fund the U.K.’s vocational training system. The primary purpose for the U.K. using an apprenticeship levy to fund vocational training is to reduce poaching externalities (i.e. nonparticipating firms “poaching” workers trained by participating firms) and to encourage training by creating a disincentive for nonparticipation, as well as to create an incentive for smaller firms to participate in apprenticeship training by making it more affordable to hire apprentices.

A similar model to the U.K. could be adopted in the United States. A federal agency could be created with the sole role of setting minimum standards for apprenticeship training, as well as to set standards for training examinations and certification in the U.S. The agency would work with various industries to set industry- specific standards for apprenticeships, examinations, and certification. Then, individual firms would be allowed to devise their own apprenticeship-style training program and offer apprenticeships, for which interested students could apply. Upon completion of their apprenticeships, apprentices would take the standardized examination for their industry and, if successful, would be awarded a certificate of completion that would indicate that they have mastered the minimum standard of skills set by their industry. An 107

“apprenticeship levy” similar to the U.K.’s could also be created in order to create financial incentive for firms to participate in the new apprenticeship-style vocational training scheme and to help fund the apprenticeship system and make it more affordable for smaller firms to participate in apprenticeship training as well.

As with the German-inspired model, a U.K.-inspired policy alternative for the

U.S. has its own “pros” and “cons.” One benefit of this policy alternative is that it sets a minimum standard for training, but gives firms wide discretion in how they go about meeting those minimum standards. This gives firms greater flexibility to tailor the training of their apprentices more closely to the firms’ own goals and needs so that they can train apprentices that will be well-suited to come work for their specific firm upon completion of their apprenticeship, increasing both the productivity of the firm and employment, overall. Another benefit of the U.K.-inspired policy alternative is the

“Apprenticeship Levy” which creates an effective funding mechanism for the apprenticeship system while also creating strong incentives for firms to participate in vocational training. The levy also works to make it more affordable for smaller firms and businesses in the U.S. to participate in apprenticeship training by largely offsetting the cost of the levy for those firms through a possible $20,000 grant they would receive back from the U.S. government.

Despite having many benefits, there are some downsides to the U.K.-inspired model as well. One drawback of this policy alternative is that it relies solely on hands-on apprenticeship training, but lacks a theoretical academic component like the “dual”-style training system of Germany. As a result, apprentices would lack a more thorough understanding of their trade, which might lead to lesser productivity on the work floor as 108 workers will be less prepared to resolve job-related problems (e.g. a broken tool or machine) on their own than, say, their German counterparts who have received a “dual”- style vocational education. Also, by giving a large degree of autonomy in standard-setting to firms and industries, rather than adopting a more structured approach in which industry, labor, and the government cooperate in setting training standards, a U.K.- inspired model would likely not result in the kind of training standards the U.S. really needs to meet the growing demand for advanced vocational skills.

While the U.K.-inspired policy alternative has some significant benefits, by largely neglecting to include an academic component or involve academic institutions in vocational training, this model is not the preferred policy alternative either.

A third policy alternative for improving the U.S. vocational training model could be the introduction of a completely new “school-based” system built around a Federal institution (here on referred to as “the Institute”) which could take on many different forms. The Institute would essentially function as a federally-organized and governed

“parallel” schooling system at the post-secondary level that would pick up the slack of the somewhat ineffective community colleges in the realm of vocational training and focus solely on equipping the American populace with the kind of advanced vocational skills needed by the U.S. economy. Since community colleges are not designed specifically to function as vocational training schools—though some community colleges do offer vocational training—they are not necessarily the ideal vessel for improving vocational training in the U.S. to the degree that is needed. As such, the “Institute” would be designed to function solely as a highly-organized and highly-effective vocational training school. The purpose of this federal “school-based” model would be to create a 109 clear, accepted alternative to traditional university education, similar to the Grandes

Écoles in France, but focused on vocational training (The Grand Écoles are an alternative/parallel elite post-secondary schooling system in France designed to “prepare administrative, scientific and business executives […] for their place as leaders in government or private enterprise” (Power 2003)). Although the proposed Institute for the

U.S. would be more accessible to the general populace than the Grandes Écoles, it would be similar in that, in France, studying at a Grandes Écoles is considered as contributing to public service, so “students [at the Grandes Écoles] generally pay low or no fees, and are paid monthly stipends in some institutions” (“Grandes Écoles” 2018).

The structure of the Institute is also important to consider in order to supply the greatest number of people with new vocational training opportunities. As such, the

Institute would be governed by a central federal agency that will oversee the operations of several “hub” campuses located in or around major hubs of growing industry across the U.S. (i.e. the Rust Belt, southern California, etc.). Each “hub” campus would be supported by a number of “branch” campuses located throughout the surrounding region servicing smaller, more local populations, similar to the relationship between the “main” and “branch” campuses of many of the largest traditional universities in the U.S. The

“hub” campuses would be larger and receive more direct funding than the “branch” campuses and, like most American universities, would be able to equip their students with the skills and connections necessary to gain employment at the biggest, fastest- growing companies in the American economy. The “branch” campuses, while smaller than the central campus, would also equip their students with relevant, in-demand technical skills, but would have a more regional/local view, focusing more specifically on 110 meeting the demands of the industries in the region surrounding the “hub” campus (e.g. the Silicon Valley campus would focus on equipping students with computer skills such as programming and computer engineering, while the Detroit campus might focus more on skills more relevant to manufacturing than to software design). This design for the

Institute would allow it to extend its service to the greatest number of people without reducing its effectiveness. This structure would also give students more flexibility with their educational career, as students not ready to move away from home to attend the larger “hub” campuses would be able to start out at their local “branch” campus and later transfer to the “hub” campus if they desire.

Training at the Institute would be conducted by industry “experts” who could either be hired on a full-time, long-term basis, or contracted out for a short period of time

(i.e. two to five years), or a mixture of both. The latter scenario might prove more effective at maintaining the ability of the Institute to adapt to future changes in industry, such as further mechanization or the emergence of new industries, since industry

“experts” would only be contracted for a short period of time, allowing the Institute to contract new “experts” in other industries if the demand for skills shifts. The Institute should be federally-funded, as the service it would provide would benefit the entirety of the U.S. economy, making it a worthwhile investment for the nation. Federal funding would make the Institute accessible to all American citizens, as there would be no “out- of-state” fees for students from other states and the need for school loans would be eliminated since the federal government would have no need to charge tuition. A caveat to such generous federal spending could be that students who fail to graduate would be held responsible for repaying the cost of their training at a set rate per credit/course. Such 111 a caveat would incentivize students to take their training seriously so that the money spent by the government to turn them into skilled workers is not wasted. The justification for having such a low or non-existent cost of attendance would be that students studying at the Institute—similar to those at the French Grandes Écoles—would be considered to be completing a public service—that of equipping themselves with the skills necessary to make our national economy more productive and efficient—and, as a result, it would not make sense to charge students for completing a service to their country.

The training programs offered by the Institute could either be two-year programs, where students undergo intensive training on industry-specific skills; or three-year programs, with the first year focusing on more general technology and/or engineering skills, and the remaining two years providing students with industry-specific skills. The latter would make the program more accessible to students from low-income areas where their high school education may have failed to equip them with the skills necessary to succeed in industry. Additionally, the Institute would work with firms in the states, regions, and localities surrounding both the main and branch campuses to design apprenticeships, or even simply “cooperative learning” opportunities, at those firms which would be made available to students from the Institute and eligible candidates outside of the Institute who are interested in obtaining an apprenticeship. These apprenticeships or cooperative learning opportunities would be made a graduation requirement for all Institute students, many of whom would likely complete their apprenticeship/co-op requirement in their final year at the Institute.

The “path to graduation” for students attending the Institute would be similar to a traditional college experience. For example, the first year at the Institute will be dedicated 112 to helping students find their desired vocation or industry and then equipping them with the most basic skills necessary for success in their industry. After determining the industry they are interested in, Institute students will be required to fulfill certain “general education” requirements for their industry, such as specific math or science courses, which they would complete in their first semester or year, depending on when they commit to an industry. However, the “general education” requirements at the Institute would be more streamlined than at traditional universities, focusing specifically on the minimum math, sciences, and hard skills necessary for success in the students’ specific industries. Since the “hub” campuses would have limited space for housing and instruction, they would have to be selective in their admissions, which would mean that most Institute students will complete their “general education” requirements at a local

“branch” campus. Upon completion of the “general education” requirement, students completing them at a “branch” campus would be eligible to transfer to a “hub” campus, or opt to finish out their vocational education at the “branch” campus.

After completing all of the “general education” requirements in their first year, students would spend an additional two to three years completing increasingly advanced courses relevant to their industry. In each of their industry-tailored courses, students would learn the theoretical concepts behind their trade while also developing relevant hard skills using training tools and technologies relevant to their industry.

In order to graduate, students would have to have not only completed all of their

“general education” and industry-relevant course requirements, but they would also be required to take and pass a national standardized examination tailored to their specific industry. Also, each industry program would require students to complete either a 113 cooperative learning opportunity or an apprenticeship at a firm within their industry, where students would apply their theoretical knowledge and hard skills to real world production. Until all course requirements are fulfilled, the national industry examination is passed, and a cooperative learning opportunity or apprenticeship is completed, students would be unable to receive an official certificate of completion, a document that would hold the same weight as a traditional bachelor’s degree for graduates of the Institute.

There are both “pros” and “cons” to this training program design. One of the

“pros” is that students would be able to receive high-quality training in the industry in which they seek to work. This design would grant greater flexibility to students who, upon graduation, would be able to seek employment at whichever firm they prefer, equipped with valuable skills desired by their industry. Along that line, Institute students would be well-equipped to meet the skill needs of the biggest and fastest-growing industries in America. An additional benefit of the Institute design is that this program would have more of a “university” feel, which might garner greater respect and legitimacy while reducing the “working class” stigma that can come with many of the community and technical colleges that exist today. Also, Institute graduates will be granted an official license/certificate/degree with which a certain degree of skill would be acknowledged by potential employers. One other benefit of the Institute design, in addition to being accessible to basically everyone, is that it would equip students with industry-specific skills, whereas a solely apprenticeship-style program might take a more firm-specific approach in the training it provides. Another benefit of the federal “school- based” Institute model is that, being part of a federal program, the Institute would be nationally-coordinated, meaning that every “hub” and “branch” campus across the nation 114 would be following the same rules, regulations, and standards as every other Institute campus. Compared to the traditional university system in the U.S., which does not benefit from such a degree of nationwide coordination, the Institute model seems much more efficient and effective.

There are also a few “cons” to be seriously considered with the Institute model.

To start, the Institute model would be an incredibly expensive undertaking. Not only would it require new physical infrastructure to be built (i.e. campuses with teaching buildings, labs, workshops, dorms, cafeterias, etc.), but it would also require a significant amount of money to hire and/or contract industry “experts” to serve as instructors. The amount of federal funding required for this program design might also create significant political resistance, especially from states that would not immediately benefit from the

Institute’s skilled graduates (despite benefitting over time from the resulting growth of the national economy). Another possible drawback from the Institute model is that it might be less well-suited to meet the demands of local-level industry, as it tends to focus more on the biggest, fastest-growing industries nationwide and Institute students, with their exceptional credentials, would likely seek employment at the biggest and “best” firms, neglecting the skill needs of local firms. Also, while the Institute model would be highly effective at improving the coordination and execution of vocational training in the

U.S., the same results—that of equipping a larger number of Americans with the advanced vocational skills needed by the U.S. economy—could likely be achieved instead through a sound system of incentives for more firms to offer apprenticeship opportunities—a much less-costly solution than adopting the Institute model. So, while 115 the Institute model seems like it would prove to be effective at producing the skilled workers needed by the U.S. economy, there are a few serious drawbacks.

Since the U.S. is already home to a wide variety of existing vocational training models—from community colleges, to technical schools, to firms already engaging in apprenticeship training—a preferred policy alternative will utilize the best, most successful aspects of each model and compile them to develop a new model for U.S. vocational training that is better prepared to equip the U.S. populace with the advanced vocational skills the U.S. economy desperately needs. It is also important to note that, given the wide variety of already existing vocational training models in the U.S., it is possible to incorporate aspects of the German and U.K. training models into a new U.S. model with relative ease. This model of vocational training, which I have labeled the

“hybrid” model, would consist of an extensive expansion and deepening of some of the already successful, but relatively small-scale programs that already exist in the U.S., as well as scaling back and potentially eliminating some of the more unsuccessful elements of the existing U.S. vocational training system.

A creation of a new “hybrid” model of vocational training—one that draws on the strengths of existing vocational training models both in the U.S. and abroad, while eliminating the weakest aspects of each—would be the preferred means of improving vocational training in the U.S. The goals of this model would be to equip the greatest number of Americans with advanced vocational skills in the quickest manner and at the lowest cost. The new “hybrid” model would utilize existing vocational training institutions in the U.S. to move toward a “dual”-style vocational training system funded by an “apprenticeship levy.” 116

This new “hybrid” model would require the creation of a new federal agency focused solely on improving vocational training in the U.S. that would work with industry leaders to develop new standards, examinations, and certification for vocational training in the U.S., as well as work with firms and academic institutions such as community and technical colleges to create a “dual”-style model of training. Operating under a coalition of the Department of Education, the Department of Labor, and the

Department of Commerce this new agency would work with firms and academic institutions in different communities in different states to develop a relationship between local firms and colleges that would serve as the cornerstone for a new, “dual”-style apprenticeship-based vocational training model. After these relationships are established, the agency can take on a reduced role as merely a facilitator as the firms and schools work together to develop apprenticeship opportunities in the firms that coincide with new curriculum taught at the schools.

After the new federal vocational training agency steps back into more of a supervisory role, the community colleges and firms would continue to meet and work with one another on a regular basis to continue developing new curriculum and apprenticeship opportunities, in order to keep the vocational training system up-to-date and responsive to changes in skill demands and the economy. Representatives from both the community colleges and local industries and firms would conduct these meetings and would exchange information such as program success, potential problems, current problems, room for growth, etc. Under this system, students interested in obtaining an apprenticeship would also be automatically enrolled in whichever academic institution is partnered with the specific firm with which the student is apprenticing. 117

This new heightened emphasis on the “dual” training model, though currently uncommon in the U.S., would be made possible by the close relationships that would develop over time between local firms and colleges as they continue to engage in close communication and cooperation while developing and maintaining the new “hybrid” training system. Apprentices would then split their time between hands-on work at the firm and classroom instruction on the more theoretical aspects of their trade, similar to how apprentices do in the German “dual”-style apprenticeship model. This style of training would allow apprentices to learn the hard skills necessary for success in their prospective industry, as well as to learn the more theoretical aspects of their trade so that they can have a more thorough understanding of their hard skills and the technology with which they will work on a daily basis. Additionally, the coordinating agency led by the coalition of the Departments of Education, Labor, and Commerce would work with industry leaders and vocational training experts to develop a national standardized examinations for all apprentices to complete in order to receive their official certificate of completion. All standardized examinations that would be required for apprentices to obtain official certification of completion of their program would be conducted at the academic institution which those apprentices completed the classroom instruction portion of their training. The training program instructors at each college would proctor the exam for all of the apprentices in their specific programs.

While academic institutions would likely prove easier to persuade to adopt this new model of vocational training than firms, in order to incentivize a large number of firms to participate, there would likely be a need for a financial incentive for participation. Under this new model of vocational training, firms would actually receive 118 two separate financial incentives to participate. The first incentive would come in the form of an “Apprenticeship Levy,” similar to the U.K. model, where the government would charge all firms an “apprenticeship levy” at a certain rate based on their total annual payroll, regardless of whether the firms engage in apprenticeship training or not.

Then, all firms would be granted a certain amount of money to help offset the cost of the levy for smaller firms and to help compensate larger firms for paying the levy. The levy itself would be used to compensate firms for the initial cost of the levy, as well as to offer financial support for smaller firms that offer apprenticeships or want to setup their own apprenticeship opportunities. The levy would incentivize firms that do not offer apprenticeships to develop and offer their own apprenticeships, since they would be forced to pay the apprenticeship levy whether they participate in training or not. Firms that offer apprenticeship-style training prior to the introduction of the Apprenticeship

Levy would be exempt from paying the levy, as a reward for pioneering the apprenticeship model in the U.S. without any financial incentive from the government to do so.

The second financial incentive to induce firms to cooperate with the new “dual” training approach would come in the form of the reduced rate that firms would be allowed to pay apprentices during the duration of their apprenticeship. This may require passing a new minimum wage law specifically for people engaged in apprenticeship training. If passed into law, the reduced apprentice wage would be a sturdy incentive for firms to create their own apprenticeship opportunities and take on apprentices, as their apprentices would offer the same, or a slightly reduced, level of productivity as full-time workers, but at a fraction of the cost, with the understanding that apprentices are 119 accepting reduced wages during their apprenticeship in order to gain valuable skills that will result in higher pay once they enter the workforce full-time. While reduced wages might seem like a drawback for apprentices, in reality, reduced wages benefit apprentices by reinforcing the incentive for firms to offer apprenticeships in the first place. Since apprentices are generally less productive than the average full-time worker, offering reduced wages to apprentices allows firms to mitigate the cost of training, as well as incentivizing firms to continue training. Additionally, even earning a reduced wage as an apprentice is more than receiving no wage while working toward a four-year university degree. It should also be noted that the supervising/overseeing entities involved in the new vocational training scheme would work to protect apprentices from any exploitation by their training firm (i.e. failure to pay at least the minimum reduced wage, overloading apprentices with tasks, etc.). These two incentives should be sufficient enough to incentivize most firms to begin participating in apprenticeship-style training.

While there might be some initial resistance from community colleges and firms to move to a new system of vocational training, upon further consideration, it should become apparent that there are strong incentives to engaging in this new “hybrid” model of vocational training. First, community colleges would benefit from increased enrollment as people begin to realize the benefits of receiving a vocational education and flock to the community colleges to receive a “dual” vocational education. Firms are heavily incentivized by being able to pay a reduced wage to apprentices while benefitting from increased productivity. State governments should not have any reason to object to this new “hybrid” model, because it would allow them to increase the skill level of their states’ citizens while also increasing economic growth and bringing increased revenue to 120 their community colleges as more and more people begin to pursue a “dual”-style vocational education. While the “hybrid” model would focus on vocational training at the post-secondary level, community colleges would be able to attend career and college fairs in local high schools and advertise their apprenticeship programs in order to link the

“hybrid” model at the post-secondary level to the high school level.

There may also be some cultural resistance to increased vocational training, but I believe that any cultural resistance would be far outweighed by the cultural support for the new model as people begin to realize that a “dual”-style vocational education is their ticket out of being stuck in low-skill, low-wage jobs. With most U.S. firms on-board and with strong relationships established between firms and academic institutions like community and technical colleges, as well as oversight and funding from the government, this “hybrid” model should be enough to create a system of relationships between firms, workers, the government, and academic institutions that would enable the U.S. to finally meet its growing demand for advanced vocational skills.

To conclude, while the Germany-inspired, U.K.-inspired, and “school-based” models for improving vocational training in the United States would likely all succeed at least to some extent in improving the U.S. vocational training system, on their own, they are all either too ideal, too expensive, or simply do not do enough to improve the U.S. system to truly meet the growing demand for advanced vocational skills. The Germany- inspired “dual”-style vocational training model would be effective at equipping apprentices with a more thorough theoretical understanding of their skills and trade, in addition to an advanced level of vocational skills, but would be difficult to implement in the U.S. given the profound differences in the relationships of the actors related to 121 vocational training in Germany versus those in the U.S. Since U.S. firms lack the close relationship with labor and government that German firms have in Germany, it would be difficult to achieve a similar level of success in the U.S. using a model suited specifically for the unique context of Germany. The U.K.-inspired model, while proven successful in the U.K., lacks a theoretical learning component and gives firms almost sole control over training standard setting, both of which would prevent the U.S. from achieving the level of advanced vocational training that it desperately needs. The “school-based” Institute model could prove extremely effective at improving U.S. vocational training, but it is extremely cost-prohibitive and requires a level of coordination and cooperation that does not currently exist in the U.S. and would take a long time to develop, which may be detrimental to improving U.S. vocational training in a reasonable time frame. Clearly, these models are not ideal for improving U.S. vocational training, at least in the form they have been proposed. However, by combining the best, most useful aspects of each of these “less-preferred” policy alternatives into a more-preferred “hybrid” solution, a single, best solution for realistically improving the U.S. vocational training system in a profound way might be found.

122

Chapter 9: Policy Objections and Rebuttal

Despite having worked to make the proposed “hybrid” model of vocational training as complete and unproblematic as possible, there are still several potential objections to this proposal. Critics might critique the structure and design of the model, or the strength of certain incentives for participation, or problems with fairness and equity, or any number of things. However, despite the critiques that may be leveled at the preferred “hybrid” solution, it still stands as the strongest and most complete approach to comprehensively improving vocational training opportunities in the U.S. so that the U.S. can help equip its workforce with the advanced skills necessary to be successful in the face of rapid technological innovation and advancement in the workplace. Although the

“hybrid” model stands as the strongest bet for effective improving U.S. vocational training, it is still important to consider as many critiques as possible in order to further strengthen and improve the “hybrid” model.

To begin, some critics of the preferred “hybrid” solution may claim that the U.S. vocational training model should be more centralized and rely more heavily on government involvement, as that would allow the training system to react to changes in market skill demands more quickly than a decentralized system controlled largely by individual firms and academic institutions, as well as ensuring that training standards are more uniformly enforced throughout the country. Creating a more centralized training model would also allow for better coordination of training, testing, and certification standards, which would allow the system to function more uniformly, despite operating over a landscape as large as the U.S. Additionally, allowing greater government involvement and oversight can better ensure protection for apprentices from labor 123 exploitation, as well as allowing the government to control and direct coordination among firms and schools, allowing the system to operate more smoothly.

Other critics of this solution might claim that the financial incentives laid out in the preferred policy alternative will be insufficient to encourage participation from all firms and that, perhaps, non-participating firms should be taxed directly for non- participation in the training system. This critique is especially important, considering that most U.S. firms either do not train at all or already have a successful system of “in- house” training for their workers, so starting or transitioning to a new vocational training model could prove too costly for firms to want to adopt the new model. By creating a direct tax for all non-participating firms, the government can ensure that most, if not all firms get on board with the new training scheme.

Others will likely argue that firms with successful “in-house” training models will not want to participate in this new training scheme and will likely push-back politically against the Apprenticeship Levy. This critique, while similar to other critiques, is important to consider separately, as push-back from firms with existing “in-house” training programs against the proposed “Apprenticeship Levy” should be expected. Firms with successful “in-house” training models will likely see no need in switching to a new training system, so proper incentives will need to be created to convince these firms to participate in the new apprenticeship-style training model.

Also, some critics may claim that it is unfair to grant exemption status from having to pay the Apprenticeship Levy to firms with existing apprenticeship programs prior to the levy’s inception, as there may be smaller firms forced to pay the levy that would have started their own apprenticeship program long ago, but, being a small firm, 124 they could never afford the necessary resources to start their own program. This critique is important to consider, because one of the main points of improving vocational training in the U.S. is to create as many opportunities for advanced vocational training as possible, which requires participation from all firms, even small ones. If small firms feel slighted by the new training scheme, they will be hesitant, if not totally unwilling to participate in the new model of vocational training.

There are likely some critics as well that will claim that there will be no interest in apprenticeships that offer a reduced wage for the same labor done by a full-time worker.

If prospective apprentices do not feel that they are being compensated appropriately for their labor, there will likely not be very much interest in apprenticeship training among the general populace. In order to ensure widespread participation in the new vocational training scheme, a sufficient financial incentive for apprentices to participate will be necessary. While all of these critiques may be valid, they do not necessarily negate the potential efficacy of the preferred policy alternative being proposed.

While the proposed “hybrid” model is not perfect by any means, the critiques leveled against it do not detail any problem of real significance once one considers more carefully the nature and structure of this preferred model of vocational training.

First, in response to the claim that, to be successful, the improved model of vocational training in the U.S. should be more centralized and include more direct government involvement, it should be noted that, because of the decentralized nature of vocational training as it currently exists in the U.S., it would be much easier, and likely much more effective, to keep the primary coordination of vocational training at the local and state levels and rely less on a top-down approach with heavy influence and control 125 from the federal government. Relying too heavily on the federal government can result in the neglect of unique skill and labor demands at the local and state levels, where improved vocational training would have the most profound and effective impacts on local and state economies which serve as a base for the wider national economy.

To those critics that claim that the apprenticeship levy would not be a strong enough incentive for firms to begin participating in apprenticeship-style vocational training and that a stronger incentive would be a direct tax on all non-participating firms, it should be noted that for non-participating firms, the apprenticeship levy essentially acts as a direct tax for non-participation in the program, as firms will be required to pay the levy, regardless of whether or not they take on apprentices. For firms that do not already offer apprenticeships, the apprenticeship levy would incentivize them to begin participation, as they can only recoup the benefits of paying the Apprenticeship Levy by choosing to hire on apprentices.

Critics that claim that firms that already have successful “in-house” training programs will refuse to accept the new model and push back politically against the apprenticeship levy have a fair point. However, since most “in-house” training at firms is designed for employees that are already employed full-time by the firm, and the new apprenticeship model would be aimed at students and workers not yet employed full- time, existing in-house programs and the new apprenticeship model will not necessarily conflict with one another. As far as the potential pushback against the Apprenticeship

Levy goes, firms would benefit far more from training and hiring apprentices than from relying solely on “in-house” training, as apprentices will work for reduced wages (which lowers the firm’s payroll costs) and firms will benefit far more from being able to hire on 126 already-trained former apprentices than from taking productive time from full-time workers to train them. Also, again, since “in-house” training and apprenticeship training are directed at two completely different groups, they do not necessarily conflict with one another and so they can easily coexist.

As far as the critique of granting firms with existing apprenticeship programs prior to the inception of the levy exemption status from having to pay the levy because it would be unfair to smaller firms who would have created such a program if they had had the necessary resources, this critique, while valid, is a non-issue in reality. While it may seem unfair to grant some firms exemption status, it would be more unfair to force firms that already engaged in apprenticeship training (a training model that is extremely rare in the U.S.) to pay a fee for continuing to do what they were already doing before. In that instance, the levy would serve more as a punishment to those firms than an incentive to participate. Also, while it may seem like an unfair practice to smaller firms, the amount of money returned to firms by the government to offset the cost of the levy will likely be large enough to cover the complete cost of training for smaller firms, so that smaller firms are essentially given an exempt status as well, which negates the original critique entirely.

Lastly, some critics may claim that there will be no interest from potential apprentices in accepting an apprenticeship that pays a reduced wage for their labor. While this is a valid point, those who choose to accept an apprenticeship opportunity at a firm will likely be willing to accept the reduced wage, especially since they will understand that they are obtaining valuable skills during their apprenticeship that will result in higher pay later on when they complete their apprenticeship and enter the workforce. Hopefully, 127 these responses to the critiques of the preferred policy for improving vocational training in the U.S. are enough to satisfy the critics of this plan.

128

Chapter 10: Conclusion

As you can see, the process of producing vocational skills is incredibly complex, especially when trying to create a system of skills production that provides sufficient incentives for participation, produces the kind of advanced skills necessary to work with complex tools and technologies on the job, and can keep up with the pace of future technological change and innovation that may alter the kind of skills necessary to function efficiently and effectively in the modern workplace. The main problem with the system of producing skills in the U.S. is that the U.S. vocational training system is highly fragmented and, as a result, lacks the kind of coordination and cooperation among the actors involved with producing vocational skills that would enable the U.S. to keep up with the increased demand for advanced skills brought on by technological change and innovation. In addition, the task of implementing effective changes to the U.S. vocational training system has to hurdle several barriers related to both the practical and political implementation of such changes. One such barrier, related to the practical implementation of changes to the U.S. system, is that of incentivizing participation. Since labor unions in the U.S. are relatively weak and U.S. firms tend to look primarily after their own interests first and foremost, coordination and cooperation among labor and firms is nearly non-existent—and that does not even take into consideration the lack of coordination among other related entities, such as academic institutions and the government. Since the U.S. vocational training system is so highly fragmented, in order to produce effective changes to the U.S. system, coordination and cooperation among the relevant economic actors (i.e. firms, labor, the government, schools, etc.) must be improved. 129

Even if cooperation and coordination related to U.S. vocational training were improved, there are still potential hurdles to confront in regards to the political implementation of a new vocational training policy. For example, senators and representatives from states that would not immediately benefit from improvements made to the U.S. vocational training system—even if they would stand to benefit greatly overall in the long run from the resulting growth of the national economy—might prove hard to sell on a new vocational training policy. Fortunately, however, jobs are a hot- button issue for politicians, so the idea of creating more jobs through improving the U.S. vocational training system will likely resonate with voters who will, in turn, attempt to influence their politicians to support a new training scheme. However, this is why it is so crucial that any new vocational training policy is designed and implemented in a way that stands to benefit as many as possible—from workers, to firms, to the national economy as a whole.

That is why I have chosen a preferred policy solution that builds upon the existing

U.S. system, in addition to pulling from the various strengths of the German and U.K. systems. To reiterate, the preferred policy solution for improving vocational training in the U.S. is a “hybrid” model, that aims to improve cooperation and coordination among academic institutions and firms on the local level to create a new system of “dual”-style apprenticeship training funded almost entirely from a U.K.-style “Apprenticeship Levy” that incentivizes participation in training on part of the firms, while also ensuring that all firms, both large and small, are able to create their own apprenticeship opportunities.

While this solution involves the creation of a new federal agency, this new agency’s role is primarily that of facilitator, creating enough structure to help spur coordination and 130 cooperation among actors at the local level, while also creating a system flexible enough to adapt to future changes in skill demands. If this preferred “hybrid” solution for improving vocational training in the U.S. succeeds, then the U.S. will be in a very strong position to ensure that every American is employed and equipped with the skills and knowledge necessary to be successful in the modern workplace.

If this preferred solution does not succeed, and the U.S. fails to adopt a new, better system of vocational training, then the U.S. may, unfortunately, come to face a

“nightmare” scenario. In such a scenario, U.S. workers fail to keep up with competition from developed nations with better vocational training systems, as well as failing to keep up with competition from low-skill workers in developing nations who are willing to accept lower wages. This “nightmare” scenario would likely result in the flight of corporations from the U.S. to nations where they can either access labor with the kind of advanced skills they need, or pay significantly less for low-skilled workers. The pace of technological change and innovation will only cause further problems for a U.S. ill- equipped to meet growing skill demands, as future technologies will likely only further replace human labor in the modern workplace, especially in lower- to medium-skilled positions that are easily automated. This will place American workers at an even further disadvantage, as there will be little to no demand for any workers without advanced vocational skills who can continue to perform functions in the workplace that robots and new technologies cannot. Without available employment opportunities for Americans with less than the highest degree of skills, wages for the lower-skilled will continue to decline. This effect will likely cause wage inequality in the U.S. to continue to increase 131 far past the levels at which it exists today. In a worst case scenario, social, economic, and political crises could eventually arise.

Avoiding such a nightmarish scenario is precisely why it is necessary for the U.S. to pursue a new policy approach—as outlined here—for vocational training and education. The U.S. is on the brink of a most dire situation, one that can easily be avoided, however, by simply looking to other, successful models of vocational training and considering how such models might be replicated or at least learned from in order to improve the U.S. system of vocational training. The time to act is now and we must not wait until more American jobs are lost to the forces of future technological change and innovation.

132

References

113th Congress. 2014. “Workforce Innovation and Opportunity Act.” July 22, 2014. https://www.gpo.gov/fdsys/pkg/PLAW-113publ128/html/PLAW- 113publ128.htm. “Apprenticeship Levy - GOV.UK.” n.d. Accessed November 7, 2017. https://www.gov.uk/government/publications/apprenticeship-levy/apprenticeship- levy. Arbeitsagentur. 2016. Apprenticeships in Germany. https://www.youtube.com/watch?v=7gtYl77l4UQ. Autor, David H., Frank Levy, and Richard J. Murnane. 2003. “The Skill Content of Recent Technological Change: An Empirical Exploration.” Quarterly Journal of Economics 118: 4. Becker, Gary S. 1993. Human Capital. 3rd ed. Chicago: The University of Chicago Press. “Become an Apprentice - GOV.UK.” n.d. Accessed November 26, 2017. https://www.gov.uk/apprenticeships-guide. Berger, Bennet, and Elena Vaccarino. 2016. “Codetermination in Germany – a Role Model for the UK and the US? | Bruegel.” October 13, 2016. http://bruegel.org/2016/10/codetermination-in-germany-a-role-model-for-the-uk- and-the-us/. Booth, Alison L., Dennis J. Snower, and Great Britain Centre for Economic Policy Research. 1996. Acquiring Skills: Market Failures, Their Symptoms and Policy Responses. Cambridge University Press. Boyington, Briana. 2015. “Understand the Differences Between a Co-Op, Internship.” US News & World Report. March 31, 2015. https://www.usnews.com/education/best-colleges/articles/2015/03/31/understand- the-differences-between-a-co-op-internship. ———. 2016. “Explore Career Programs at Trade Schools, Community Colleges.” US News & World Report. February 4, 2016. https://www.usnews.com/education/community-colleges/articles/2016-02- 04/explore-career-programs-at-trade-schools-community-colleges. Brookings Institution. 2012. “Why German Labor Policies Are Better than America’s - YouTube.” February 3, 2012. https://www.youtube.com/. Bureau of Labor Statistics. n.d. “Military Careers : Occupational Outlook Handbook: : U.S. Bureau of Labor Statistics.” Accessed January 16, 2018. https://www.bls.gov/ooh/military/military-careers.htm. “Career and Technical Education.” 2016. Pamphlets. August 18, 2016. https://www2.ed.gov/about/offices/list/ovae/pi/cte/index.html. Carroll, Caitlan. 2013. “Inside Germany’s Dual Vocational Training System.” Young Germany. August 1, 2013. http://www.young-germany.de/topic/study/courses- degrees/inside-germanys-dual-vocational-training-system. City & Guilds. n.d. “Qualification Comparisons - NVQ Level 1, 2, 3, 4, 5, 6, 7, 8 | City & Guilds.” Accessed December 14, 2017. https://www.cityandguilds.com/qualifications-and-apprenticeships/qualifications- explained/qualification-comparisons. 133

Civil Air Patrol. n.d. “Military Service Technical Training Schools - Civil Air Patrol.” Accessed January 8, 2018. http://ae.capmembers.com/whats_happening/careers/educational_preparation/mili tary-service-technical-training-schools/. CNBC. 2017. “Siemens USA CEO: Doubling down on Apprenticeships.” June 20, 2017. https://www.cnbc.com/video/2017/06/20/siemens-usa-ceo-doubling-down-on- apprenticeships.html. Coudriet, Carter. 2017. “The Top 30 Two-Year Trade Schools: Colleges That Fight The Nation’s Skills Gap.” Forbes. June 19, 2017. https://www.forbes.com/sites/cartercoudriet/2017/06/19/the-top-30-two-year- trade-schools-colleges-that-fight-the-nations-skills-gap/. “Definition of CRISIS.” n.d. Accessed March 15, 2018. https://www.merriam- webster.com/dictionary/crisis. “Distance Learning.” 2015. Adult Career and Continuing Education Services | NYS Education Department. May 8, 2015. http://www.acces.nysed.gov/aepp/distance- learning. DW English. 2014. “Companies Courting Trainees | Made in Germany - YouTube.” November 26, 2014. https://www.youtube.com/. ———. 2015. “Dual Vocational Training - Germany’s Successful System | Made in Germany - YouTube.” January 7, 2015. https://www.youtube.com/. “Education in England.” 2017. Wikipedia. https://en.wikipedia.org/w/index.php?title=Education_in_England&oldid=812212 693. Education Week. 2016. “Can Vocational High Schools Be a Viable Alternative to College? - YouTube.” March 3, 2016. https://www.youtube.com/. “Employment Preparation Education (EPE).” 2015. Adult Career and Continuing Education Services | NYS Education Department. May 6, 2015. http://www.acces.nysed.gov/aepp/employment-preparation-education. “Entry Requirements for Apprenticeships in England.” 2017. UCAS. September 13, 2017. https://www.ucas.com/entry-requirements-apprenticeships-england. Euler, Dieter. 2013. “Germany’s Dual Vocational Training System: A Model for Other Countries.” Bertelsmann Stiftung, Gütersloh, Germany. Federal Ministry of Education and Research. n.d. “The German Vocational Training System - BMBF.” Federal Ministry of Education and Research - BMBF. Accessed September 14, 2017. https://www.bmbf.de/en/the-german-vocational- training-system-2129.html. Federal Ministry of Justice. 2010. “Germany: Act Against Unfair Competition (Version Published on March 3, 2010).” March 3, 2010. http://www.wipo.int/wipolex/en/text.jsp?file_id=229699. Fuller, Alison. 1996. “Modern Apprenticeship, Process and Learning: Some Emerging Issues.” Journal of Vocational Education & Training 48 (3): 229–48. https://doi.org/10.1080/1363682960480302. Goldin, Claudia, and Lawrence F. Katz. 2009. “The Future of Inequality The Other Reason Education Matters So Much.” Improving “No Child Left Behind”: Linking World-Class Education Standards to America’s Economic Recovery, 7. 134

Gospel, Howard, and Alison Fuller. 1998. “The Modern Apprenticeship: New Wine in Old Bottles?” Human Resource Management Journal 8 (1): 5–22. https://doi.org/10.1111/j.1748-8583.1998.tb00156.x. “Grandes Écoles.” 2018. Wikipedia. https://en.wikipedia.org/w/index.php?title=Grandes_%C3%A9coles&oldid=8227 28437. Grubb, W. Norton, and Lorraine M. McDonnell. 1996. “Combatting Program Fragmentation: Local Systems of Vocational Education and Job Training.” Journal of Policy Analysis and Management 15 (2): 252–70. Hall, Peter A., and David Soskice. 2001. “Varieties of Capitalism: The Institutional Foundations of Comparative Advantage.” OUP Oxford. “Higher and Degree Apprenticeship Vacancies - GOV.UK.” 2017. November 15, 2017. https://www.gov.uk/government/publications/higher-and-degree-apprenticeship- vacancies. “Higher and Degree Apprenticeships - GOV.UK.” 2017. November 24, 2017. https://www.gov.uk/government/publications/higher-and-degree-apprenticeships. How To Germany. 2017. “German School System.” 2017. https://www.howtogermany.com/pages/germanschools.html. Institute for Apprenticeships. n.d. “What We Do.” Institute for Apprenticeships. Accessed December 14, 2017. https://www.instituteforapprenticeships.org/about/what-we-do/. “Institute of Technology (United States).” 2017. Wikipedia. https://en.wikipedia.org/w/index.php?title=Institute_of_Technology_(United_Stat es)&oldid=801969081. International Student. n.d. “UK Education System | Study in the UK.” International Student. Accessed November 26, 2017. https://www.internationalstudent.com/study_uk/education_system/. Jacoby, Tamar. 2014. “Why Germany Is So Much Better at Training Its Workers.” The Atlantic, October 16, 2014. https://www.theatlantic.com/business/archive/2014/10/why-germany-is-so-much- better-at-training-its-workers/381550/. Johnson, George E. 1997. “George Johnson_Changes in Earnings Inequality Role of Demand Shifts.pdf.” The Journal of Economic Perspectives 11 (2): 41–54. Keen, Richard. 2015. “A Short History of Apprenticeships in England: From Medieval Craft Guilds to the Twenty-First Century.” Second Reading (blog). March 9, 2015. https://secondreading.uk/social-policy/a-short-history-of-apprenticeships- in-england-from-medieval-craft-guilds-to-the-twenty-first-century/. Lawrence, Robert Z., and Matthew J. Slaughter. 1993. “International Trade and American Wages in the 1980s: Giant Sucking Sound or Small Hiccup?” Brookings Papers on Economic Activity. Microeconomics 1993 (2): 161–226. Maryland Department of Labor, Licensing and Regulation. n.d. “Adult Education and Literacy Services - Division of Workforce Development and Adult Learning.” Accessed January 8, 2018. https://www.dllr.state.md.us/gedmd/. “National Vocational Qualification.” 2017. Wikipedia. https://en.wikipedia.org/w/index.php?title=National_Vocational_Qualification&ol did=801853621. 135

New York State Education Department. 2015. “Welcome to Adult Education Programs and Policy (AEPP).” Adult Career and Continuing Education Services | NYS Education Department. July 7, 2015. http://www.acces.nysed.gov/aepp/welcome- adult-education-programs-and-policy-aepp. OECD. 2014. “Education at a Glance 2014 Country Note--Germany.” https://www.oecd.org/edu/Germany-EAG2014-Country-Note.pdf. Pannoni, Alexandra. 2014. “Vocational High School Programs an Option for Teens.” US News & World Report. October 20, 2014. https://www.usnews.com/education/blogs/high-school- notes/2014/10/20/vocational-high-school-programs-an-option-for-teens. “PCRN: About Grant Programs.” n.d. Accessed December 19, 2017. http://cte.ed.gov/grants/about-grant-programs. Power, Angie. 2003. “France’s Educational Elite,” November 17, 2003, sec. Expat. http://www.telegraph.co.uk/expat/4190728/Frances-educational-elite.html. Qualified Professionals Initiative. 2017. “Do I Qualify for a Vocational Training Course in Germany?” September 6, 2017. http://www.make-it-in-germany.com/en/for- qualified-professionals/training-learning/training/do-i-qualify-for-vocational- training. ReferNet Germany. 2015. “Germany - Becoming a Master Craftsman with Government Support.” Cedefop. May 19, 2015. http://www.cedefop.europa.eu/en/news-and- press/news/germany-becoming-master-craftsman-government-support. Schöne, Swen. 2012. “Germany : Headhunting : Poaching Employees at Their Workplace and the Legal Risks for the Recruiting Employer - Fieldfisher.” March 30, 2012. http://www.fieldfisher.com/publications/2012/03/germany-headhunting-poaching- employees-at-their-workplace-and-the-legal-risks-for-the-recruiting- employer#sthash.eBHBl6dN.dpbs. “School-to-Work Transition.” 2016. Wikipedia. https://en.wikipedia.org/w/index.php?title=School-to- work_transition&oldid=754986158. Seattle PI. n.d. “What Is the Difference Between Vocational & Technical Courses?” Accessed January 17, 2018. http://education.seattlepi.com/difference-between- vocational-technical-courses-3063.html. Siemens USA. n.d. “About Siemens- Siemens in the USA.” Ctc_xhtml_overview. Accessed January 24, 2018. http://www.usa.siemens.com/en/about_us.htm. Simon, Stephanie. 2012. “Obama Calls for Focus on Vocational Training.” Reuters, February 13, 2012. https://www.reuters.com/article/us-usa-budget- education/obama-calls-for-focus-on-vocational-training- idUSTRE81C1Z620120213. Smith, Connie. 2016. “For-Profit Career Colleges and Technical Schools -- What You Need To Consider Before Enrollment.” Owlcation. August 17, 2016. https://owlcation.com/academia/Career-Colleges----What-You-Need-To- Consider-Before-Enrollment. Soliz, Adela. 2016. “Preparing America’s Labor Force: Workforce Development Programs in Public Community Colleges.” Brookings (blog). December 9, 2016. https://www.brookings.edu/research/preparing-americas-labor-force-workforce- development-programs-in-public-community-colleges/. 136

Spitz-Oener, Alexandra. 2017. “The Real Reason the German Labor Market Is Booming.” Harvard Business Review. March 13, 2017. https://hbr.org/2017/03/the-real-reason-the-german-labor-market-is-booming. Steedman, Hilary. 1993. “The Economics of Youth Training in Germany.” The Economic Journal 103 (420): 1279–91. https://doi.org/10.2307/2234254. Thelen, Kathleen. 2004. How Institutions Evolve: The Political Economy of Skills in Germany, Britain, the United States, and Japan. Cambridge University Press. Thyssenkrupp. 2017. “Dual Education System - YouTube.” May 19, 2017. https://www.youtube.com/. Trading Economics. 2017. “Germany Average Gross Monthly Earnings | 1991-2017 | Data | Chart.” 2017. tradingeconomics.com/germany/wages. TSO. n.d. “Industrial Training Act 1964.” Accessed December 14, 2017. http://www.legislation.gov.uk/ukpga/1964/16/enacted. UK Department for Education. 2017. “SFR_Template_NatStats - SFR53_2017_FINAL.pdf.” October 12, 2017. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/65 0515/SFR53_2017_FINAL.pdf. Unwin, Lorna, and Jerry Wellington. 1995. “Reconstructing the Work‐based Route: Lessons from the Modern Apprenticeship.” The Vocational Aspect of Education 47 (4): 337–52. https://doi.org/10.1080/0305787950470401. U.S. Air Force. n.d. “Careers.” Accessed January 16, 2018. https://www.airforce.com/careers. U.S. Department of Labor. n.d. “Apprenticeship | United States Department of Labor.” Accessed January 24, 2018a. https://www.dol.gov/apprenticeship/. ———. n.d. “Trade Act Program: TAA for Workers, Employment & Training Administration (ETA) - U.S. Department of Labor.” Accessed January 16, 2018b. https://www.doleta.gov/tradeact/taa/about-us.cfm. U.S. Department of Labor Employment and Training Administration. n.d. “Apprenticeship Data and Statistics.” Accessed January 23, 2018. https://doleta.gov/oa/data_statistics.cfm. “Works Council.” 2017. Wikipedia. https://en.wikipedia.org/w/index.php?title=Works_council&oldid=811309923. World Education, Inc. 2018. “Adult Ed Facts - United States - World Education, Inc.” 2018. http://www.worlded.org/WEIInternet/us/adult-ed-facts.cfm.