With strikes and a national debate on what a “living wage” is, Bryan Orr says this battle could inadvertently kill apprenticeships.
The focus of the conversation surrounding a “living wage” all seems to point back to what fast food workers and retail employees are paid. The argument is made that they cannot live on the wages and benefits provided.
Let’s set that question aside for a moment regarding traditionally low paying jobs and ask a different question. What will this do to apprenticeship in industries that are not traditionally low paying?
I am the co-owner of a small air-conditioning business in the suburban outskirts of Orlando, FL. We currently have 28 employees, about half of which are skilled tradesmen who make $40K to $80K yearly. Clearly, skilled tradesmen who are competent to perform work without direct supervision are already meeting what most would consider to be a “living wage” standard.
In our business, we also hire and train apprentices; in fact, the majority of our current skilled technicians started out as apprentices before they had any formal training in air conditioning repair. We start most apprentices out at between $8 and $11 per hour and the majority of the applicants are young men. Many who are just out of high school or newly returned from military service and are looking for a long-term career.
The choice that many are given when entering a skilled but non-academic job is as follows:
- Option #1 – Go to some sort of school, which may vary from very expensive, to free, but that will not help pay the bills at all. Once you are done with school, you hope to find a job in the industry. You then start out at base, or very close to base, pay until you learn the hands-on skills needed to do the job.
- Option #2 – Join an apprenticeship program within a business and learn plus get paid a low base pay as you work.
Even as it stands now, small businesses are put in an awkward position. In order to get some of the best employees, you must be willing to train them yourself. In order to train them yourself, you need to spend the money, not only to do the training, but to pay at least minimum wage while you train them to be in compliance with Federal Law. In essence, if you want skilled people you need to be willing to pay them to train them. Fair enough.
Now what happens when the minimum wage increases to a “living wage” level? You can no longer afford to have an apprenticeship program. This is not only because of the increased training costs, it is also due to the fact that you would need to increase your entire company pay scale by a proportional amount. If a new trainee needs to make $15hr vs. the previous $10hr, then it stands to reason that all the other employees would also expect a $5hr increase resulting in an approximate 25% increase in labor costs across the board.
The argument can be made “How do you expect these workers to survive when you are paying them so little for apprenticeship?” My answer is “The same way they would survive making nothing while they go to school”.
37% of low wage workers ($10.10hr and under) are under the age of 24, according to the Center For Economic and Policy Research. Of these high school and college age workers, Pew Research statistics show that 56% of them still live at home with their parents or other family.
In many cases workers in the 18 – 24 year age bracket may be finding that they would like to enter a trade out of high school or that they may enjoy an area of work other than what they studied in college. For these younger workers, or any workers, who are looking for a good career in a non-academic field, apprenticeship may be a viable option regardless of the level of pay when compared to traditional training options.
Discussions regarding assisting low pay workers need to focus more on high demand skills and the methods for obtaining those skills, and less on overarching wage control regulations. While we can all agree that the goal is to help workers attain a “living wage”, we need to ensure that the measures taken will help instead of hurt the workers who are looking for a fruitful career.
Very few people are looking for a position in unskilled labor, fast food or low end retail. Most often they are forced into those positions by a lack of marketable skills, experience and / or education. It needs to be our collaborative mission to actually help people get to a point where they would no longer feel trapped in those low paying jobs, and make sure that we do not implement policies that would only trap them further.
The concept of skills being the primary pay driver extends beyond the trades. Google Senior VP of people operations told The New York Times that a college education is no longer a prerequisite to become an engineer at Google. This further highlights that being employed at even the most advanced companies can come from on the job, or self-led training. According to the Bureau of Labor Statistics, there are currently 4.8 Million open jobs in the US, approximately 73% of which do not require any college degree; that is an estimated 3.5 Million jobs.
Apprenticeship programs that effectively both develop people and help good organizations grow are an asset to both the lower and middle class, and really do create a win-win for employees as well as small business owners like myself. I am genuinely concerned that with the attempt to fix companies like McDonalds and Wal-Mart, we may unintentionally damage the ability for small businesses to develop people from within.
Good businesses will find a way to survive no matter what. My hope is that survival will not need to include the death of apprenticeship. Real hope is an unlocked door, not a greater portion of prison rations.
Photo: Author’s own