The Apprenticeship and Jobs Training Act of 2017 would create $5,000 tax credit for hiring registered apprentices
The U.S. has over 6 million job vacancies that require skilled workers
WASHINGTON, DC – U.S. Senator Amy Klobuchar has cosponsored bipartisan legislation to enhance the competitiveness of our workers and businesses in the global marketplace by supporting and expanding the use of apprenticeships. Apprenticeship programs are a tried and true model of workforce development, allowing workers to earn while they learn and companies to increase the skills of their workforce. The Apprenticeship and Jobs Training Act of 2017 creates a concrete, powerful incentive for businesses to embrace apprenticeship programs, accelerating the adoption of the apprenticeship model and boosting training and education available to workers.
“Ensuring that our workforce has the skills needed for the jobs of tomorrow is
be crucial to advance a competitive agenda for our country,” Klobuchar said. “This bipartisan legislation rewards businesses that invest in apprenticeship programs while giving workers the tools they need to get good-paying, in-demand jobs.”
American companies’ investment in job training and education has declined steadily since the mid-1990s. U.S companies are only investing half of the amount in job training they did a decade ago. The Apprenticeship and Jobs Training Act would accelerate the expansion of the apprenticeship model in this country by providing a $5,000 tax credit for new registered apprentices hired by American companies.
The apprenticeship model is increasingly necessary today. In a Minnesota 2017 State of Manufacturing report, 68% of respondents said it was difficult for them to find workers with the right skills and experience this year. According to the National Skills Coalition, fifty-three percent of U.S. jobs are middle skill, meaning that they require some form of postsecondary education and training beyond high school, but not a four year degree. Yet, only 43 percent of U.S. workers are trained at this level.
Apprenticeship programs benefit both the company and employee. According to a study by the Department of Labor, workers who finish apprenticeships earn an average of $240,000 more in wages over a lifetime than job seekers with similar work experience. According to the Urban Institute, more than 80 percent of U.S. companies that have registered apprenticeships say it is an effective strategy for helping them meet their demand for skilled labor, and 94 percent of employers would recommend registered apprenticeships as a strategy to other employers.
Specifically, the Apprenticeship and Jobs Training Act of 2017 would:
- Create a $5,000 tax credit for up to three years for companies that hire and pay employees enrolled in a federal- or state-registered apprentice program. Additionally, employers participating in a multi-employer apprenticeship program, the credit rate would be $3 per hour each individual works.
- Allow senior employees near retirement to draw from pensions early if they’re involved in mentoring or training new employees. Workers must be at least 55, and have reduced work hours to spend at least 20 percent of their time training or educating employees or students.
- Help veterans get into skilled jobs that match their military experience sooner by allowing credit in apprenticeship requirements for previous military training.
Klobuchar has long supported efforts to help workers succeed in an increasingly specialized workforce while making the country’s economy more competitive. In April, she and Senator Collins introduced the bipartisan American Apprenticeship Act, which would provide funding to states to support pre-apprenticeship and Registered Apprenticeship programs. She also cosponsored the bipartisan Leveraging and Energizing America’s Apprenticeship Programs (LEAP) Act earlier this year, which would provide tax credits for apprentices who are registered with the U.S. Department of Labor or a state apprenticeship agency. In 2015, Klobuchar successfully pushed for a $5 million grant from the Department of Labor to strengthen partnerships between community colleges and local businesses and expand apprenticeship programs. Also in 2015, provisions from Klobuchar’s bipartisan legislation with Senator John Hoeven (R-ND), the Innovate America Act, which improves students’ access to science, technology, engineering and mathematics (STEM) education by allowing school districts to award funding to create a STEM-focused specialty school or enhance an existing STEM program within a school, were signed into law in 2015 as part of the Every Student Succeeds Act. This law helps give our students the skills they need to be successful in high-tech, high-wage jobs. Klobuchar also helped pass the Workforce Innovation and Opportunity Act in June 2014, which included her bipartisan provision to help match the skills of workers with the needs of local employers. The provision established competitive grants for partnerships that help provide workers with the skills needed to fill vacancies in up-and-coming industries.