New Jersey, like the rest of the nation, faces significant challenges in bridging the gap between jobseekers and employers during this time of growing inequality and rapid technological change that will remake most career fields. Most jobs in the United States are middle-skills jobs, which require some type of post-high school training or education, but not a college degree. Our workforce, however, is becoming more and more divided between the highly-educated, specially-trained employees, who receive an increasingly greater share of income gains, and the low-paid employees, who often work without any benefits or control over their schedule. The middle-skill workers—like manufacturing employees—face challenging circumstances as large companies downsize, move production internationally, and increasingly rely on contractors.
This polarization of the workforce, stagnant wages, persistent structural racial and gender inequality in employment, and declining bargaining power of employees, is driving the United States towards levels of income inequality not seen since the Great Depression era of the 1920s—nearly 100 years ago. As economic gains increasingly go to the wealthiest, all other families become more financially precarious. Indeed, more than four in ten adults (41%) do not even have $400 to cover an emergency expense, and 62% of Americans will live in poverty at some point in their life because they do not have enough savings to support them through losing a job, a health issue, or another unexpected loss of income or sudden expense.
While the economic situation is difficult for many people in America, it is dire for people of color. Nationally, people of color have double the unemployment rate of white people, and they are twice as likely to live in poverty. Both women and people of color—and particularly women of color—are paid less and are under-represented in many lucrative career fields. Because of systemic racial discrimination and the cumulative effect of earning less over their lifetime, there is a staggering racial wealth gap. Nationally, white households have a median net worth of $127,200, while Black and Latino households have a median net worth of just $9,250 and $12,550, respectively. This racial wealth gap tripled from the 1980s to the present, and was exacerbated by the substantial loss of homeownership among Black and Latino families during the 2007 to 2009 recession. It would take a Black family 228 years and a Latino family 84 years to achieve the wealth that the average white family has today. In New Jersey, one of the worst states in the nation for racial wealth disparities, the median net worth for white families is $271, 402—the highest median net worth in the nation. By contrast, the median net worth for New Jersey’s Black and Latino families is just $5,900 and $7,020, respectively. These racial disparities reflect systemic, not individual, failures.
Among the many potential policy solutions to create more economic opportunity and growth in the United States, apprenticeships have been proven to consistently deliver significant financial benefits to employees, employers, the government, and society, making them one of the most productive uses of government investments. Apprenticeships are a way to advance racial and gender equity, and to counter the displacement of current and future employees as our economy continues to undergo significant changes in what is being called the Fourth Industrial Revolution. Apprenticeships also provide incumbent workers and new entrants to the workforce with the training necessary for in-demand jobs that pay a living wage in growing career fields.
By developing and implementing a sustainable statewide apprenticeship program that meets the needs of both resident jobseekers and the state’s employers, while expanding employee diversity and economic growth, New Jersey can lead the nation in creating an apprenticeship model for other states and the federal government.
The concept of an apprenticeship—a person working for reduced earnings while learning a skill or trade from another person with experience in that profession—dates back centuries to ancient craftsmen and craft guilds. Apprenticeships persisted through the Industrial Revolution—when much of Europe and the United States transitioned from an agrarian society to an industrial urban society—as well as World Wars I and II, the introduction of systems of mass production, the expansion of employment opportunities to women, people of color, people with disabilities, and other people who have been marginalized, and the technological and digital revolution of the twenty-first century.
Although apprenticeships are largely associated with the skilled trades, the actual structure of an apprenticeship is used by the fields of medicine, law, finance, and journalism, as well as some of the most dynamic and successful companies in the country. Apprenticeship programs can be incorporated into nearly every industry, can be designed to assist dislocated and displaced workers in connecting with new career fields, and can help people who face structural and other barriers connect to employment. Importantly, as America transitions to a new global economy, apprenticeship programs can prioritize equity by enabling more women and people of color to enter career fields that have traditionally been closed to them.
Apprenticeships should align with the federal government’s apprenticeship program requirements to receive funding and technical assistance, but they should be led by the states. States can tailor their apprenticeship programs to meet the needs of their growth industries and their population, providing additional support for residents who face barriers in connecting to work or who must retrain for a new career field.
New Jersey is one of the states most impacted by the challenges of this moment, and it is one of a handful of states with the greatest potential opportunity to lead the nation in developing a lifelong learning apprenticeship model that promotes a more inclusive and equitable economy, bridges the skills gap between people and industry, and integrates education and workforce training.
On the challenges side, New Jersey has one of the highest unemployment rates in the nation at 4.2%—only fourteen states and Washington, D.C. have higher unemployment rates. New Jersey also has one of the greatest percentages of people who are long-term unemployed in the nation. Nearly one-in-ten residents in the labor force (9.2%) are either unemployed or under-employed, which is one of the highest rates in the nation. Because of New Jersey’s higher unemployment rates and one of the highest costs of living in the nation, it is experiencing an out-migration of millennial workers—who will form the bulk of the workforce in the years to come. New Jersey is one of the worst states for income inequality, ranking 44 out of 50—meaning that 43 other states have less income inequality. This inequality results in significant income disparities for women and people of color in New Jersey, with women of color experiencing some of the highest pay disparities in the nation.
On the opportunities side, New Jersey has one of the largest and most diverse economies among the states, with a strategic location as a transportation hub on the East Coast. New Jersey is home to several industries that are projected to grow in the state and nationally—including Trade, Transportation and Utilities, Education & Health Services, and Professional & Business Services—and it is estimated that there will be 275,300 jobs added over the course of the next six years. New Jersey has one of the strongest public university systems in the country, several renowned private colleges and universities, and a strong network of community colleges, all of which could be potential partners in a statewide apprenticeship program.
Most of New Jersey’s job growth will be in middle-skill jobs. Prioritizing a statewide, lifelong learning model of apprenticeships would enable New Jersey to ensure that there are sufficient middle-skill workers to meet the needs of its growing industries, while creating better employment opportunities for the nearly one-in-ten state residents who are unemployed or under-employed. In turn, this will help reduce gender and racial disparities in employment and income, and enable more young workers to remain in New Jersey, strengthening the state’s future workforce.
First, this report will make the economic equity and growth case for apprenticeships. Second, this report will explain how apprenticeships work, and provide state policy recommendations for New Jersey. Finally, this report will provide a blueprint for starting a federally-registered apprenticeship program.