The vast majority of U.S. businesses are small and medium-sized, but few participate in apprenticeship. Targeted government grants and tax credits could help them get off the sidelines. Also, reimagining the prison-to-workforce pipeline and an essay on building the infrastructure to help people navigate pathways to good careers. (Subscribe here.)

Blind Spot for Work-Based Learning

Apprenticeship remains a rounding error in the U.S, with 700K active apprentices across a total civilian workforce of 170M. And just 150K of the nation’s 6.3M employers sponsor or participate in a registered apprenticeship program, with construction companies and other large employers dominating the space.

Many more small and medium-sized businesses, which employ nearly half of the U.S. workforce and account for 99.9% of all employers, will need to join the party if apprenticeship is going to matter in this country.

These businesses see the greatest ROI from apprenticeships, but they also face the biggest financial and administrative barriers to participation, Andrew Campbell, a policy program manager at the Urban Institute, writes in a new brief that draws from prior research and work by Urban.

As part of a tech apprenticeship project in North and South Carolina, the nonprofit think tank encouraged intermediary organizations to focus more of their services on smaller businesses.

“The incentives to work with small and medium-sized businesses are not really there,” says Campbell.

Launching and running an apprenticeship program can be a heavy lift for any company, he writes in the brief. They need to pay for program design on the front end and invest in ongoing costs, including supervisor time on training and mentorship. This is particularly challenging for smaller businesses.

For example, the paperwork involved in registration can be daunting for businesses without dedicated HR staff, researchers from Mathematica recently wrote for Work Shift.

Governments can help smaller businesses overcome these barriers. For example, states and the feds could create targeted apprenticeship grants that provide cash incentives and subsidies directly to these employers, Campbell writes.

Tax credits also can be a powerful incentive, because they provide predictable financial support on a per-apprentice basis for the duration of a tax-credit program. Yet employers need to know about tax credits and apply for them, and that’s particularly hard for businesses with limited staff bandwidth.

Campbell cites the limited uptake of a $50M apprenticeship tax credit launched in 2018 by New York State. As of last May, just 81 businesses had been issued $1.1M in credits to support 329 apprentices. He says it’s likely that this sort of program is particularly underused by smaller businesses.

No state or federal tax credits are specifically aimed at smaller businesses, which Campbell says is a missed opportunity.

“Targeting is hard,” he says. “But if you want to change the outcomes, you have to do it with intention.”

Community colleges and workforce boards are less likely to have reached out to smaller businesses about partnering on apprenticeship, according to the brief. But there are exceptions to that rule.

Miami Dade College, for example, has teamed up with CareerSource South Florida to help offset costs for employers to train apprentices, as Colleen Connolly reported last year for Work Shift. CareerSource South Florida, the local workforce board, taps federal WIOA money to reimburse up to 40% of wages for apprentices. That’s particularly attractive to smaller employers in Miami-Dade County, where 81% of businesses employ fewer than 10 workers.

Despite benefiting greatly from apprenticeships, smaller employers are underrepresented and undersupported in the U.S. apprenticeship system, writes Campbell.

The Kicker: “State and federal governments need to strategically target apprenticeship expansion investments and technical assistance to small and medium-sized businesses, just as they do with employers in priority industries and geographies,” he writes.

One-Stop Shop for the Formerly Incarcerated

After being released from prison, people must navigate a maze of government systems, workforce programs, and parole requirements. They are rarely prepared to do this, Florida-based reporter Matthew Arrojas writes for Work Shift. As a result, nearly half (45%) report no earnings within the first year of their release.

A company originally designed to help frontline workers, Workbay, is taking on the bureaucracy and uneven training opportunities that make it hard for formerly incarcerated people to join the workforce. For example, Arrojas reports that Workbay’s platform tries to cut through the fragmentation of government programs that can help this population.

Click over to Work Shift to read the article by Arrojas.

READ MORE

Open Tabs

Workforce Pell
The federal government expects only about 184K students to qualify for Workforce Pell in its first year, with costs totaling about $311M, according to estimates included with the final rules for the program. The program is anticipated to grow to only 191K students a year over the next decade. By comparison, the current Pell Grant program serves about 6M students a year and is expected to cost almost $35B in 2026.

Earn and Learn
Apprenticeship degrees are poised to expand from a small-scale innovation in the U.S. to an important strategy for growing high-quality apprenticeships and educational opportunities, finds a report from the Urban Institute. The researchers call for a shared national definition of apprenticeship degrees and back policies that direct public funding to aspects of the programs, align licensure regulations with the model, and clarify federal guidance about funding.

New First Rung
College graduates must have the skills to step onto what’s become the new first rung of the career ladder—work that uses AI rather than being replaced by it, writes Patrick Harker, a Wharton School professor who formerly led the Philadelphia Fed and the University of Delaware. Harker calls for a tax on Big Tech to create a digital-AI land-grant act to fund AI and advanced skills training at community colleges and regional universities.

Education and Training
The U.S. needs a new national commission to propose a holistic, long-term strategy for educating and training American workers and citizens, writes Doug Lederman, the former editor and co-founder of Inside Higher Ed. He calls for philanthropies to stand up such a nonpartisan commission of experts from policy, education, business, and workforce. Their mandate should include developing sustainable solutions for financing and data systems.

Billionaires and Workforce
The U.S. is overdue for a wave of philanthropic institution building as ambitious as anything the Gilded Age produced, yet today’s billionaires—the richest generation in human history—overwhelmingly donate to existing institutions, Sarah Cone writes for the Stanford Social Innovation Review. For example, large gifts tend to go to a handful of wealthy universities rather than workforce training, rural healthcare, or civic infrastructure for the digital age.

Free College
Tennessee’s free community college program increased enrollment among new high school graduates and raised associate degree attainment, finds a working paper published by the National Bureau of Economic Research. It also increased transfer to four-year colleges and didn’t reduce the production of bachelor’s degrees. The researchers found evidence of higher early-career incomes and overall benefits that likely exceeded the program’s public costs.

Free Tools
The workforce-technology company WhereWeGo is releasing a free workforce tool every 30 days while seeking ideas from workers, practitioners, and partners to influence what to develop next. Examples include a Workforce Pell eligibility check for education and training providers. AI makes it possible to build workforce tools much faster and cheaper, the company says.

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