An Honest Day's Work Can Take Days
An Honest Day's Work Can Take Days
Apprenticeships, the Panacea for Labor Shortages in Critical American Industry (1/2)
In 2024 there are labor shortages across the U.S. that threaten the future of critical American infrastructure. From home services, commercial construction, manufacturing and more, America’s most important industries are missing something crucial…people.
Taiwan Semi Conductor has pushed back one of the largest foreign investments in US history (its $40 billion Arizona chip plant) by multiple years, due to a lack of skilled labor to service its plant
The Associated General Contractors of America say that nearly 80% of construction firms having a hard time filling positions for craftsman
7,000 new electricians are joining the industry each year, but 10,000 retire from it
¾ of manufacturing executives feel that attracting and retaining a quality workforce is their primary business challenge in 2024
The net of the net is companies have been unable to find employees to fill open positions. In a survey conducted by Angi, 77% of trade professionals believe there is a shortage of skilled trade labor, up from 71% in 2020.
It is estimated that this skilled labor shortage could amount to a $2.5 trillion loss for the American economy by 2028. This is not only a critical problem, but one also of epic proportions.
Please reach out to tylerlasicki@gmail.com if you too are captivated by this problem and are motivated to do something about it.
Medieval Work Force Development
Dating back as far as 11th century Europe, a significant portion of the skilled labor force in medieval cities were structured around the organization of guilds. Merchant guilds were involved in trade and craft guilds were made up of craftsmen and artisans—all guilds were organized so that workers would learn skills from others connected with the guild. Members traditionally advanced through a well defined structure of apprentice, journeyman, and master.
An apprentice was a young person, who learned their métier by working for a master craftsman. At the time, it was typical for apprentices to live at their master’s house, were given room and board, but earned no money.
After finishing an apprenticeship, an apprentice would become a journeyman, a worker who was then paid wages by the day while working in the trade. Journeymen had the freedom to travel anywhere their services were needed, often moving city to city in search of bigger and better occupational prospects.
A master craftsman, was a full guild member who could start their own business. To become a master, journeymen had to produce a “masterpiece” to demonstrate their skill in their trade, and if the masterpiece was accepted by guild members, they could vote to accept the journeyman as a master.
Guilds aided in the progression and expansion of the economies of the era through the provision of education to apprentices and through enabling journeymen to enhance their skills. The specialization of expertise within a trade, as orchestrated by the guild framework, led to increased productivity, increased wages, higher quality products, and higher standards of living. Guilds became a major source of employment for workers with membership becoming widespread…until they weren’t.
By the end of the 18th century, the tides of public perception turned away from Guilds—resulting in the system being disbanded all across Europe. Although Gilds did not continue to dominate the economic zeitgeist much past the 16th century, their structures for skill development have endured for greater than half a millennium. In colonial America, some of the most influential early Americans got their start as apprentices.
George Washington started his career as a surveyor’s apprentice. When he wasn't leading troops into battle, George Washington was a land surveyor, exploring the Virginia lands of his youth.
Ben Franklin started as a printers apprentice at just 12 years old. By 22 he had started his own printing shop which would go on to create Poor Richard's Almanack, Cicero's Cato Major, and The Pennsylvania Gazette. He became the “Official Printer of Pennsylvania and New Jersey” and was responsible for printing the paper currency of the time. He is most well known for this role as a founding father of America, being the only person to have signed all four of the documents that helped to create the United States.
Paul Revere began his career as a silver smith apprentice to his father. After returning from service and with his fathers passing Paul Revere took over his family’s Silver Smith Shop.
Henry Ford began as an apprentice machinist in Detroit. After completing his apprenticeship, he was employed as an engineer at the Edison Illuminating Company of Detroit, later becoming chief engineer. Ford’s machinist background ultimately helped him invent what would go on to become the world’s first affordable, mass-produced car, the Ford Model T.
The Current State of Affairs
Despite the formation of Guilds being phased out in most of Western Europe by the 18th and 19th centuries, apprenticeships never left. In fact, they became a mainstay of economic independence in early American colonial times. In 2024, apprentices not only still exist, but are, once again, beginning to catch their stride.
In 2021 there were over 800,000 registered apprentices served across a variety of vocations. Since 2012, there has been a 64% growth in new apprenticeships.
So why the comeback?
Increasing Demand: In the first half of 2023 alone there were more than 770,000 unique skilled trades job postings from nearly 95,000 employers. It is estimated that the construction sector alone will need to draw nearly 550,000 new workers to the field this year to meet the demand for labor.
Government Initiatives: There has been a significant increase in federal government spending on workforce development after the passage of the IIJA, CHIPS Act, IRA and more. This is happening at the state level as well. In 2023 NY state in began implementing a $350 million Workforce Development Initiative. In 2022, Colorado Gov. Jared Polis signed an executive order expanding the number of registered apprenticeship programs within state government. As recently as November 2023 Maine Gov. Janet Mills designated $12.3 million to both private sector and public sector apprenticeships
Less Accessible Alternatives: The price to attend the average 4 year university program has increased 180% from 1980 to 2020, making the cost of college less accessible for many American families. As more families have to weigh the cost of attending college, many are beginning to explore alternatives. In 2023, the percentage of young adults who said that a college degree is very important fell to 41%, from 74% a decade earlier. In the fall of 2010 there were more than 18 million undergraduates enrolled in colleges across the country. In 2021 that number dipped below 15.5 million.
Although apprenticeship growth is happening, It needs to happen faster. Almost a quarter of US construction workers are over the age of 55, the average age of a master plumber is 58, in New Hampshire the average age of an electrician is over 55, in North Carolina it is 58. The list goes on. 27% of home service tradespeople, are within 10 years of the social security retirement age of 62. Ooof.
So, although demand for skill trade workers is incredibly high today, within the next 10 years, supply will fall off a cliff, exacerbating an already massive demand side problem.
So.. what is holding further apprenticeship growth back? In a nutshell this…
The Definite Optimists View
As technological change accelerates, the way we work will continue to be altered. Out of all the jobs that are most vulnerable to AI and automation, the skilled trades fall to the bottom of the list (they actually don’t make the cut for most lists, because they are so well insulated from automation). For a plurality of other jobs, the dynamics of labor are going to change significantly over the next decade due to efficiencies derived from AI. To be clear, this is a good thing. This is progress. But, none the less, Tens of millions of Americans will need new skills.
Apprenticeships have the potential to help businesses build new talent pipelines while also providing workers a new path to higher-skill and also higher wage careers. Like the journeyman of the 14th century Europe, someone who finishes an apprenticeship with a skill is able to provide value in any location they reside. Just as remote work during Covid enabled swaths of people to live and work anywhere, this next generation of skilled trades people can be empowered to do the same.
In a world where apprenticeships grow in popularity, we can expect to see a higher number of skilled trades people in the American workforce. At scale, the major societal implications are far-reaching:
A revival of critical industries
Housing: It has been estimated that the US had a shortage of 6.5 million single-family homes as of March 2023. An increase in skilled labor would reinvigorate our ability to produce an ample supply of housing.
Manufacturing: It is estimated that there will be a shortage of more than two million American manufacturing workers by 2030, representing an opportunity cost of $1 trillion dollars per year. Pairing an increase in skilled labor with automation in the sector, American manufacturing has the potential to regain a competitive advantage in making things.
A reversion to more localized economies
In an increasingly globalized world, a higher concentration of skilled tradespeople will not only provide a greater number of local services, but also enable a greater availability of locally sourced goods. The skilled trades encompass tailoring, butchery, pharmacy, and various other professions, enabling the local production of goods. Picture this— you have a friend that makes your hoodies and jeans, another that you pick up your fresh steak from, and another whom you buy your furniture from. High quality, long lasting, meaningful goods. Now that’s what I’m talking about.
A higher density of business owners
Pursing a career in the skilled trades is one of the clearest paths to owning and operating a business, in part due to the nature of the trades. For most, there are low capital requirements needed to get started and the businesses do not require a large economy of scale to be competitive. Unlike a lawyer, doctor, dentist, etc which require a large up front commitment of time and resources, starting a business in the skilled trades starts with an earn to learn apprenticeship.
Outside of starting a business in the trades, starting an apprenticeship in the skilled trades and working for an owner of a trades business for an extended period of time can also position former apprentices to take over the business. Many trade business owners today are looking to retire with few to no succession plans. There is no one better to sell a trade business to than a long time employee who has the long standing relationships with clients, understands the day to day, and is able to ensure its future prosperity.
A greater satisfaction in one’s craft
In Closing
In 2024, the United States faces a paradoxical labor market challenge of sorts. While skilled labor shortages leave business owners in dire need of staff, millions of workers remain in occupations that lack pathways to economic advancement. The estimated $2.5 trillion loss for the American economy by 2028 due to the skilled labor shortage underscores the urgent need for solutions. Apprenticeships are the panacea. From introduction in early careers to upskilling later in life, the apprenticeship model provides the most effective method for developing skills in fields that matter. By embracing apprenticeships, the United States can not only address its immediate labor shortages but also pave the way for a stronger, more resilient workforce and economy in the years to come.
If you are a builder and are interested in learning more about the opportunity within apprenticeships, please reach out to tylerlasicki@gmail.com.