Newark, New Jersey—Today, on September 6, 2018, the New Jersey Institute for Social Justice (Institute) released Becoming the United States of Opportunity: the Economic Equity and Growth Case for Apprenticeships, a new report on how apprenticeship programs can strengthen our economy and advance economic opportunity by connecting residents—particularly women and people of color—to living wage careers. Read the report online here. Read the PDF version of the report here.
"I want to commend the New Jersey Institute for Social Justice for the release of its insightful new report. Apprenticeships are critical to the economic empowerment of New Jersey's residents and businesses. As a state, we need to create more opportunities for our residents to begin careers that open up the doors for employment, while ensuring that our high-growth industries have the workforce that they need to excel in our economy," said Senator M. Teresa Ruiz. "It is for this reason that I plan to introduce legislation that would greatly expand apprenticeship opportunities in New Jersey, particularly for women, people of color, and other people who have been under-represented and under-paid in our state. Through this legislation, New Jersey will be the national model for creating an inclusive apprenticeship program that expands economic opportunity while strengthening our economy."
New Jersey is the 7th worst state for income inequality in the nation, with people of color and women disproportionately represented among low-wage workers. Women of color also experience some of the worst pay gaps in the nation, as New Jersey is ranked last for pay equity among all 50 states for Latina women and in the top ten worst states for pay equity for Black women.
“At the direction of Governor Murphy, and in partnership with the Department of Education, and the Office of the Secretary of Higher Education, we are proud to usher in the largest expansion of apprenticeships in our state's history," said Commissioner Robert Asaro-Angelo. “Apprenticeships are a core part of our strategy to make New Jersey stronger and fairer, and we are excited to have the New Jersey Institute for Social Justice join us on this important mission to ensure that our expansion of apprenticeships is deliberately designed to create more opportunities for women, people of color, and other people with barriers to employment to enter and thrive in apprenticeship programs that pay a living wage and set them on a career path in our high-growth industries."
In conjunction with the report release, the Institute hosted a press call with:
- Lt. Gov. Sheila Oliver;
- Senator M. Teresa Ruiz;
- Robert Asaro-Angelo, Commissioner of the NJ Department of Labor and Workforce Development;
- Ryan P. Haygood, President and CEO of the New Jersey Institute for Social Justice;
- Demelza Baer, Institute Senior Counsel and Director of the Economic Mobility Initiative, and the report’s primary author;
- Eric M. Seleznow, Senior Advisor and Director of the Center for Apprenticeship & Work-Based Learning at Jobs for the Future (JFF);
- Michellene Davis, Executive Vice President and Chief Corporate Affairs for RWJBarnabas Health;
- Andrea Johnson, Senior Counsel for State Policy for National Women’s Law Center;
- Rick Thigpen, Senior Vice President—Corporate Citizenship, PSE&G; and
- Maria Heidkamp, Senior Researcher and Director, New Start Career Network at the John J. Heldrich Center for Workforce Development
“New Jersey is a state in which incredible wealth exists alongside punishing poverty, and what unites all people living in poverty in our state is that they do not have a job that pays a living, family-sustaining wage. Despite gains in education and a high workforce participation rate, people of color are twice as likely to be unemployed, and twice as likely to live in poverty as white people, and continue to be paid less for doing the same jobs. As we detail in our new report, New Jersey can lead the nation by investing in a lifelong learning model of apprenticeships that help close the racial and gender income gaps by expanding economic opportunity and mobility,” said Ryan P. Haygood, President and CEO of the Institute. “Our report lays out a comprehensive plan to expand equity and access to opportunity for women, people of color, people with disabilities, and low-income people through the ‘learn and earn’ model of training, while dismantling barriers to employment.”
Demelza Baer, the report’s primary author and Institute Senior Counsel and Director of the Economic Mobility Initiative added: “In order for apprenticeship programs to be successful in expanding economic mobility for all people, they must be offered in our high-growth industries across the state to everyone from high school students to mid and senior-level workers who need additional training or to make a career transition, and they must pay a living wage during training. As this model is adopted in New Jersey and other states, the nation will come closer to embodying its promise of being the United States of opportunity—for all.”
As the report explains, in 2016 women were only 5.6% of active, federally-registered apprentices. Women tend to be occupationally-segregated in caregiving apprenticeship programs, like child care and health care, and they are rarely represented in the highest earning apprenticeship programs in the skilled trades. For example, women comprise less than 5% of electrician apprentices, plumber apprentices, and carpenter apprentices, according to the report.
“Expanding and creating inclusive apprenticeship programs at the state and federal level is a critical tool in our work to enact policies that advance racial justice and gender equity,” explained Maria Heidkamp, Senior Researcher and Director at the New Start Career Network at John J. Heldrich Center for Workforce Development. “Not only can apprenticeship programs help to bridge racial and gender disparities in the workplace, but they also strengthen businesses and communities.”
Michellene Davis, Executive Vice President and Chief Corporate Affairs for RWJBarnabas Health echoed this sentiment: “We must be intentional in our endeavor to recruit, train, and retain individuals that represent every sector of our community, especially those who have historically been denied equal opportunities, such as women and individuals of color. Inclusive apprenticeship programs are one proactive way that we can foster a strong, integrated, and more equitable workforce.”
“We applaud the New Jersey Institute for Social Justice for releasing this new report to support apprenticeships and job training programs,” added Rick Thigpen, PSEG’s Senior Vice President for Corporate Citizenship. “It is critical that anchor institutions serve as good corporate citizens by continuing to invest in the development of a skilled, educated, and diverse workforce. PSEG looks forward to working with the Institute to help shape the policies that will support workforce development programs and remove barriers that too often prevent qualified candidates from taking advantage of these important opportunities.”
The financial return on investments in apprenticeships is substantial, according to the Institute’s report. With an average government investment of less than $1,000 per apprentice in a federally-registered program, states realized an average net social benefit of $49,427 over the career of an apprentice in the form of increased tax receipts and reduced use of public assistance. People who complete federally-registered apprenticeship programs earn an average of $301,533 more over their career.
“Apprenticeships are a time-honored, proven way to connect people to careers that pay a living wage. Programs benefit businesses by providing them with a skilled pipeline of talented and productive employees,” said Eric Seleznow, senior advisor at JFF (Jobs for the Future). “Through JFF’s Center for Apprenticeship & Work-Based Learning we work nationally to increase diversity and equity in apprenticeship programs and expand their use in high-growth industries. We look forward to working with the New Jersey Institute for Social Justice and the State of New Jersey to support their vision of apprenticeship programs that expand opportunities for all residents, especially youth, women, and people of color.”
The Institute’s report proposes the following policy recommendations to support and expand inclusive apprenticeship programs in New Jersey:
Develop a Statewide Plan to Diversify Apprenticeships: Although individual apprenticeship sponsors and businesses are required under federal law to implement affirmative action programs and commit to equal opportunity throughout their apprenticeship program, the State of New Jersey should develop its own affirmative action plan to increase diversity in its apprenticeship programs.
Support the Development of Three Statewide Adult Apprenticeship Pilot Programs in South, Central, and North New Jersey in High Growth Industries: Like the rest of the country, most of New Jersey’s current apprenticeships are in the skilled trades. In order to provide state support to expand the industries using apprenticeships and advance economic development, the State should create a pilot grant program through the Department of Labor and Workforce Development’s Talent Networks to fund three new adult apprenticeship programs in each part of the State (South, Central, North) in a high-growth industry, like (a) bio/pharmaceuticals and life sciences, (b) transportation, logistics, and distribution, (c) finance, (d) advanced manufacturing, (e) health care, and (f) energy.
Tax Credits for Organizational Sponsors of Apprenticeship Programs to Partially Cover Start-Up Costs: In order to incentivize the establishment of new apprenticeship programs, the State should provide a $5,000 business tax credit for businesses and a $5,000 state grant to non-profits, labor unions, and other tax-exempt organizations that began a federally-registered apprenticeship program during the prior year. Businesses in the state’s high growth industries should receive an additional $5,000 business tax credit for beginning a federally-registered apprenticeship program.
Tax Credits for Businesses to Partially Cover Apprentice Wages: New Jersey should incentivize businesses to employ apprentices by providing tax credits to partially offset their wages. For each apprentice that a business employs for at least six months of the prior year, the business should receive a $1,000 tax credit against their New Jersey state taxes.
To encourage businesses to employ apprentices that face barriers to employment, the business should receive an additional $2,000 tax credit for each apprentice who was employed for at least six months of the prior year if they are a veteran; eligible to receive Temporary Assistance for Needy Families (TANF)/Work First New Jersey and/or the Supplemental Nutrition Assistance Program (SNAP); a dislocated or displaced worker; if they were previously long-term unemployed; or previously incarcerated. The business should receive an additional $2,000 tax credit for each apprentice who is employed for at least six months of the prior year and who is under-represented in that career field based on their race, color, religion, national origin, sex, sexual orientation, disability, or age.
Tuition Fee Waiver for Apprenticeship Courses: In addition to on-the-job training, every apprentice must complete a course of instruction and earn an industry-recognized credential during their program. While it is best practice for employers to cover these educational costs for their apprentices, it is not a federal requirement. To ensure that the instruction-related costs of an apprenticeship do not pose a financial barrier to participation for residents, the State should provide a tuition fee waiver for residents earning below the state’s median annual income. Not only will this tuition fee waiver support the growth of apprenticeships in the state and foster economic mobility, it will also provide additional state support for the educational partners of an apprenticeship program—primarily community colleges and high-quality workforce training providers.
Create a Pilot Transportation and Childcare Assistance Program for Apprentices: Multiple state and national studies of apprenticeship programs have consistently identified two main barriers to completion of apprenticeship programs: a lack of affordable and reliable transportation and a lack of affordable, high-quality childcare.
While these two issues impact many apprentices, they disproportionately affect women, people of color, and low-income apprentices—and are often the reason that these groups of people decide to leave apprenticeship programs before completion. In order to retain more people who are traditionally under-represented in apprenticeship programs, the State should create a pilot transportation and childcare assistance program for federally-registered apprentices earning below the state median annual income. This pilot program should also include state support for apprentices to earn their drivers’ license or receive reinstatement of a previously-suspended drivers’ license, because a drivers’ license is often a requirement for participation in apprenticeship programs in the skilled trades.