RESHORING INITIATIVE IDEAS FOR HIGH PAYBACK SKILLS TRAINING ACTIONS

1. Apprenticeship loans to make apprenticeships both cost effective for the employer and economically viable for the apprentice. For example, $4 or $5/hour. Company pays off the loan over 5 or 10 years if the apprentice stays at the company. Broaden loan focus from university degrees that are often in excess supply and thus not repaid to training that the economy needs and therefore will more likely be repaid.
In Switzerland apprentices start at about $3/hour at 16 years old. By 20 years they have graduated and make about $50K. The companies can afford many apprentices and excellent training since the cost is so low. Even if the apprentices quit after graduation, the company made money. By providing loans to the apprentice, the U.S. would enable recruitment of more and higher quality apprentices at a cost that makes sense for the company. Essentially the same logic as making the student affordable to the college.

2. Corporate SBA loan guarantees tied to apprenticeships. Lower credit companies get guaranteed loans but have to add 1 apprentice per $250,000 borrowed. Society takes a risk on the company. The company produces needed skilled workers. On Jan 11, 2012, in a C-SPAN telecast “insourcing” panel at the White House, I presented the idea to Karen Mills, SBA Administrator. She liked the idea.

3. Make clear that much of the apparent return on degrees is correlation and not cause-and-effect. The cause-and-effect is significantly with the capabilities, diligence and socio-economic background of those who actually graduate from university. Same logic as #1.

4. Clear data on ROI for students, consistent with their capabilities, for different university degrees (English, history, etc) vs. different training programs. Thus, expand from just income data as in #1 to ROI that considers earlier employment and no debt.

5. Make all college loans dependent on a combination of the nation’s need for more workers with the education/training being obtained and the probability the student will complete the education/training and repay the loan. Those who are likely not to graduate or to repay, especially in over supplied fields, would be asked to make a choice that better suits them and the country.

6. Online repository of all mfg. career promotional tools: videos, ppts, papers, etc. Most training programs do not know of most of the best available tools. They keep reinventing and waste a lot of resources doing so. Minimal cost.

HM 8/10/13