On June 15, President Donald J. Trump signed an executive order aimed at expanding apprenticeship programs.
This initiative perhaps couldn’t come at a better time. The U.S. Bureau of Labor Statistics announced in April there was a record-high 6 million unfilled jobs. At the same time, there were an estimated 6.8 million people looking for work. An overarching reason is that many of the unemployed lack the skills and training these jobs require. The mismatch between skills applicants have and the skills jobs require is particularly acute in the construction and manufacturing industries. So how does the president’s executive order intend to address this? And how will this impact the sheet metal and HVAC construction industry?
It may help to understand the basics of apprenticeship programs. Registered apprenticeships are administered by the Labor Department’s apprenticeship office, along with state apprenticeship agencies approved by the secretary of labor. In general, these apprenticeship programs involve a combination of classroom instruction, on-the-job training and certification at completion.
The “earn and learn” model is intended to provide a pathway to a long-lasting career. These programs are sponsored by joint apprenticeship training committees, common in the building trades, as well as community colleges and some individual employers.
There are also additional funds allocated to this effort under the order. The Obama administration dedicated $90 million to apprenticeship programs; Trump proposes to increase that to $200 million, although this will decrease funding available to existing job training programs.
The executive order also called for the secretary of labor to establish an apprenticeship expansion task force, whose mission is to “identify strategies and proposals to promote apprenticeships, especially in sectors where apprenticeship programs are insufficient.” The task force is made up of representatives of companies, trade and industry groups, educational institutions, and labor unions, including Joseph Sellers Jr., general president of the International Association of Sheet Metal, Air, Rail and Transportation Workers.
The executive order directed the Labor Department to remove federal restrictions that have prevented many different industries from creating apprenticeship programs. In particular, this includes the use of third-parties to determine acceptable apprenticeship programs and also establishing guidelines to ensure that those apprenticeship programs meet equality standards.
The North American Building Trades Unions released a statement commending the administration for this initiative, and touted the joint apprenticeship system between building trades, unions and contractor partners as the most successful model.
Other groups have questioned whether the removal of government oversight would lead to lessening of standards and produce lower quality workers. The fear is that the department’s current minimum standards for classroom instruction and job placement would be watered down, and that federal dollars would be spent on programs that either don’t produce skilled workers or meaningful job opportunities.
It has been argued that providing for broad-based industry standards would eliminate the highly variable and uneven standards that exist today as many states apply different program approval criteria. The use of third-party certification groups could also improve quality as the federal and state governments don’t have the resources to audit the quality of programs, supporters say.
It’s unclear whether the current regulatory environment for apprenticeship programs is a driving factor in the number of unskilled workers. Promoting programs that recruit and train workers may help to jumpstart the lagging skilled-worker pipelines. But surely there are other items that need to be done in order to attract workers.
How, or will, this impact the sheet metal industry? In his testimony before the Senate, Labor Secretary Alexander Acosta was asked whether he intends upon exempting the construction industry from this order. The secretary dodged the question, but indicated it would be addressed in the development of implementing regulations.
While there are certainly shortages in the pipeline for apprentices in the unionized segment of the sheet metal industry, that is not necessarily directly attributable to the apprenticeship program certification process. The joint apprenticeship training programs are looked to as industry leaders that produce well-trained sheet metal workers, and obtaining a certification for those programs is generally not a challenge. The order may benefit nonunion employers in the sheet metal industry by allowing them to establish programs, which may not have been certified prior to the order, at a low cost with access to federal and state grants. The input of Sellers and other labor union representatives on the task force will certainly be important voices in the rule-making process.
The construction and manufacturing industries will closely watch this vital initiative and await final implementing regulations.
Attorney Michael McNally is a shareholder with the Minneapolis law firm Felhaber Larson and practices in the areas of labor law and employee benefits, with extensive experience in the construction industry. He is labor council for the Sheet Metal and Air-Conditioning Contractors’ National Association.