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As AI Wipes Out Entry-Level Jobs, America Needs More Apprenticeships

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"The only way to rekindle the American Dream is to make apprenticeships part and parcel of core educational programs in college and high school," opines Ryan Craig. (Shutterstock)
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The surprise hit song of the summer came from a Virginia singer-songwriter named Oliver Anthony.

Ryan Craig Portrait

Ryan Craig

Opinion

I’ve been sellin’ my soul, workin’ all day

Overtime hours for bullshit pay…

…Young men are puttin’ themselves six feet in the ground
‘Cause all this damn country does is keep on kickin’ them down

“Rich Men North of Richmond” made Anthony the first unknown artist to debut at No. 1. He was singing for a young generation of outsiders with no way to break into the economy—and as an indictment of those profiting off them.

Young Americans are more frustrated than ever at their inability to access good jobs — and the rise of artificial intelligence will only compound the problem. To provide jobs and paths ahead for the largest number of people in today’s cutting-edge economy, the U.S. needs to revisit an old-fashioned way of training workers: apprenticeships.

For over half a century, college was the way for American kids to succeed — a socially accepted path to socioeconomic mobility that worked most of the time. From the 1960s to the turn of the century, America’s colleges were fairly affordable, costing students less than a new car.

In turn, the vast majority of college grads got hired by good companies and learned on the job while making enough to afford a place to live and a car to commute. The cherry on top was that it felt good. The ethos of college — equipping young people to fulfill their potential, whatever direction it might take them — was the ethos of America.

40% of College Grads Have Jobs That Don’t Require a Degree

But starting about 25 years ago, things began to change. Tuition and fees grew annually at double the rate of inflation. Digital technology transformed the economy. The good jobs college grads hoped to land were different than they had been a generation before. According to the National Skills Coalition, 92% of jobs now require digital skills — generalizable only inexactly. Employers want candidates to know how to work on platforms like HubSpot for marketing, Zendesk for customer service, NetSuite for finance, Workday for HR, and Salesforce for customer relationship management.

Few colleges incorporate training on these platforms into degree programs. To top it off, skills aren’t enough anymore. College grads can easily access Salesforce’s Trailhead courses to become certified Salesforce administrators, but not many organizations are excited about hiring a newly minted Salesforce admin without any experience. College graduates are now facing a skills gap and an experience gap, resulting in persistent underemployment; more than 40% of recent college graduates are underemployed — working in jobs they could have gotten without a degree or that don’t require the skills they gained in college.

Because underemployed grads have difficulty repaying student loans, national attention has focused on college’s crisis of affordability and student loan forgiveness. After the Biden Administration’s $400 billion plan to forgive student loans was struck down by the Supreme Court, the president announced a new effort to cancel loans, in addition to changes to income-driven repayment that could cost taxpayers as much as $475 billion. It’s a lot of money to try to mend a broken system.

AI Makes It Harder to Land That First Job

Meanwhile, underemployment is about to get worse. By taking over menial work that entry-level college-educated workers used to do while they learned the job and industry, artificial intelligence will make it harder to get a good first job. IBM has predicted that while AI won’t replace people, people who use AI will replace people who don’t. That’s going to widen the experience gap and further complicate career launches for young Americans.

Think about a recent graduate trying to get a first job in the claims department of a health insurer. Today, new hires learn on the job while doing a good deal of menial work. But once the insurance company implements AI, new workers won’t review every claim. Only claims that trip one or more flags will warrant human intervention, and such work is more likely to involve problem-solving and troubleshooting — skills requiring some level of insurance claims experience.

The same will be true across financial services, healthcare, technology, and logistics — a wide array of sectors where new college graduates are seeking to launch careers.

US Ranks Last in Apprenticeships

The best and most complete solution to this conundrum is apprenticeships, which provide the skills and experience young workers are missing. Apprenticeships are full-time jobs where a company hires candidates with the express purpose of training them — both in a classroom and on the job. Wages are lower at first but rise as apprentices gain skills and become more productive.

There are about 500,000 apprentices in the U.S. today. That may sound like a lot, but represents only 0.3% of the workforce and puts the U.S. last among developed countries. Approximately 70% of U.S. apprentices work in the construction sector.

Meanwhile, in the U.K. and Australia — where there are eight times as many apprentices per capita — it’s common to launch careers in software development, accounting, and healthcare via apprenticeship without a degree. And the Central European giants of apprenticeship — Germany, Switzerland, and Austria — do 10 to 15 times better. Germany has 323 occupations with national apprenticeship standards, including a raft of jobs in healthcare and services, like doctor’s assistant, dispensing optician, and banker.

Begin Shifting Public Funding for Colleges Into Apprenticeships

If the U.S. hopes to catch up, we need to support and fund dedicated apprenticeship programs. Other countries have recognized the central role played by intermediaries: nonprofit, for-profit, and public enterprises that hire and pay students until they become productive.

In the U.K., there are 850 apprenticeship intermediaries like Multiverse, founded by Euan Blair, son of former prime minister Tony Blair, knocking on the doors of virtually every large and mid-sized company to sell apprenticeship programs. (I’m the managing director of Achieve Partners, which invests in Multiverse.) In the U.S., there are only a handful.

Current funding for apprenticeship intermediaries and other programs is a fraction of what we spend on college classrooms: federal, state, and local governments continue to pour more than $400 billion each year into college while total spending on apprenticeship is under $400 million. An apprentice receives about 2% of what taxpayers spend on a college student.

The only way to rekindle the American Dream is to make apprenticeships part and parcel of core educational programs in college and high school. If we don’t want the soundtrack of the Age of AI to be songs like “Rich Men North of Richmond,” let’s begin giving young people work experience while they’re still in school.

About the Author

Ryan Craig is the managing director at Achieve Partners, a private equity firm investing in the future of learning and earning. He is also the author of College Disrupted, A New U, and the upcoming Apprentice Nation. He will speak about Apprentice Nation at the ASU California Center Grand in downtown L.A. on Tuesday, Nov. 28, from 5 p.m. to 7 p.m. RSVP for this event here.

 

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