A full copy of the research report can be download here: ABC Apprenticeship Report. Key findings and a summary of the introduction can be found below.

THE PERFORMANCE OF ABC-SPONSORED REGISTERED APPRENTICESHIP PROGRAMS IN MICHIGAN: 2000-2016

Cihan Bilginsoy

Professor of Economics
University of Utah

cbilginsoy@gmail.com

October 2017

SUMMARY AND KEY FINDINGS

We compare the performance of the ABC-sponsored registered apprenticeship programs with those of the joint union-management and unilateral single-employer sponsored programs in Michigan construction Trades over the 2000-2016 period. We focus on the enrollment of new apprentices, occupational distribution, retention rates, wages, and demographic characteristics.

Our major findings are as follows:

• There have been five ABC-affiliated apprenticeship programs in Michigan that have been active during the period under study and currently only one program is in operation.

• The ABC programs account for a small fraction (4 percent) of all new apprentices who started training between 2000 and 2016, lagging behind the union-management joint programs (79%) as well as the unilateral single-employer programs (16%).

• A large majority (82 percent) of apprentices in ABC programs were in three trades: electrical, plumbing and pipefitting. In contrast, joint programs provided training in a more diversified portfolio of occupations.

• The ABC programs exhibit the highest rate of cancellation and the lowest rate of completion. Two-thirds of the ABC program apprentices have dropped out before completing apprenticeship requirements and 14 percent graduated. The corresponding figures were, respectively, 45 percent and 31 percent in the joint, and 57 percent and 17 percent in the unilateral single-employer programs.

• The ABC program apprentices’ average starting wage was 13 percent lower than that of the joint-program apprentices, and their exit wage was lower by a factor of two. By the end of apprenticeship, the average training wage increased by 30 percent for the ABC program apprentices and 118 percent for the joint program apprentices.

• Apprentices in the ABC programs cancelled at a relatively fast rate and it is doubtful that many drop-outs had acquired a substantial quantity of skills by the time of exit.

• As a consequence of the low number of registrations and low completion rates, the ABC programs’ contribution to the completed apprenticeships in Michigan was 2 percent.

• The share of ethnic/racial minorities among the new entrants in the ABC programs was 9 percent. Representation of apprentices of color in ABC-affiliated programs was below their overall share in the Michigan labor force (20 percent). The share of apprentices of color in the joint programs was 21 percent.

• Women constituted 1 percent of the new ABC-program apprentices and 4 percent of the joint program apprentices.

• The ABC programs account for 1 percent of the completed apprenticeships among both non-whites and women.

• The median age of new apprentices was lower in the ABC programs but the younger cohort of ABC apprentices also experienced a cancellation rate.

• Educational levels of new apprentices were similar across the programs although the ABC programs had relatively fewer new apprentices with post-secondary or technical training.

INTRODUCTION

In the U.S. the Office of Apprenticeship (OA) of the U.S. Department of Labor at the federal level and federally-recognized State Apprenticeship Agencies at the state level set and enforce standards for apprenticeship training, and provide technical assistance to establish and develop apprenticeship programs. Apprenticeship programs that agree to meet these standards register with either the federal or the state agencies. Michigan apprenticeship programs are registered with the OA. All OA-registered programs and state agency-registered programs from several states report individual-level information on the registered apprenticeship programs and apprentices to the OA. The OA compiles the data collected from all federally-registered programs and state-level registered programs in several states in the Registered Apprenticeship Partners Information Management Data System (RAPIDS). In this report we use this database to describe the recent trends in the construction sector registered apprenticeship training in Michigan with special emphasis on the performance of programs that are affiliated with the Michigan-based chapters of the Associated Builders and Contractors, Inc. (ABC).

In the US apprenticeship programs are sponsored either jointly by unions and employers (or in a few cases by a single employer) that are signatories to collective bargaining agreements (henceforth joint programs), or unilaterally by employers. In joint programs, the collective bargaining agreement specifies the training wages and apprentice-worker ratios. Employers contribute cents per every hour of labor hired to a training trust fund to finance training activities. The Joint Apprenticeship and Training Committee, composed of representatives of unions and employers in equal numbers, administers the training program.

Unilateral programs are sponsored either by an individual employer (unilateral single-employer programs or USEP) or by a group of employers (unilateral multiple-employer programs or UMEP). UMEP are usually organized under the leadership of a trade association, and financed by the participating employers. ABC-sponsored programs fall under this category. In contrast to the joint programs, however, participation in UMEP is voluntary.

The RAPIDS database lists seven ABC-affiliated apprenticeship programs in Michigan (Table 1). The earliest of these programs were registered in 1978. The most recent program registration was in 1993. In 2017, however, only one program was still active. Two programs were closed down as early as 1988 and 1994. The other four closed down between 2006 and 2014.

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