A six-year study of the U.S. Department of Labor’s (DOL) American Apprenticeship Initiative (AAI) found that apprentices’ wages increased and employers experienced a positive return on investment. AAI apprentices’ annual earnings grew by 49 percent, on average, from the year prior to starting the apprenticeship to the year after, rising from $35,408 in the year before the program to about $52,876 one year after program exit. Five years after the end of the apprentice’s time in the program, the typical employer experienced an estimated 44.3 percent return on investment.
The $175 million, five-year grants program, which the DOL launched in 2015, promoted equity by expanding apprenticeships to populations underrepresented in apprenticeships: women, people of color, veterans, and people with disabilities. Most programs lasted less than two years. The study led by global consulting and research firm Abt Associates found that:
- Nearly 70 percent of the 29,553 apprentices were from underrepresented populations.
- Apprentices initially earned less than comparable workers but caught up early in the apprenticeship and ultimately earned more by the end. Black and Hispanic apprentices’ earnings increased by 38 percent and 54 percent, respectively, compared with Black (15 percent) and Hispanic (18 percent) workers. Annual earnings grew by about 65 percent for women and 43 percent for men.
- During the program, the typical employer didn’t recoup all its costs, but after the program, employer benefits were estimated between $33,000 and $40,000 for each apprenticeship when counting both direct benefits (the apprentice’s productivity) and indirect benefits, such as reduced turnover and improved talent pipeline, worker loyalty, and company culture.