    [Senate Hearing 115-833]
    [From the U.S. Government Publishing Office]

                                                           S. Hrg. 115-833

                          MODERNIZING APPRENTICESHIPS
                            TO EXPAND OPPORTUNITIES

    =======================================================================

                                    HEARING

                                    OF THE

                        COMMITTEE ON HEALTH, EDUCATION,
                              LABOR, AND PENSIONS

                              UNITED STATES SENATE

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION

                                       ON

         EXAMINING MODERNIZING APPRENTICESHIPS TO EXPAND OPPORTUNITIES

                                   __________

                                 JULY 26, 2018

                                   __________

     Printed for the use of the Committee on Health, Education, Labor, and
                                    Pensions

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

            Available via the World Wide Web: http://www.govinfo.gov

                                    __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    31-124 PDF                  WASHINGTON : 2020

    --------------------------------------------------------------------------------------

              COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                    LAMAR ALEXANDER, Tennessee, Chairman

    MICHAEL B. ENZI, Wyoming		PATTY MURRAY, Washington
    RICHARD BURR, North Carolina		BERNARD SANDERS (I), Vermont
    JOHNNY ISAKSON, Georgia			ROBERT P. CASEY, JR., Pennsylvania
    RAND PAUL, Kentucky			MICHAEL F. BENNET, Colorado
    SUSAN M. COLLINS, Maine			TAMMY BALDWIN, Wisconsin
    BILL CASSIDY, M.D., Louisiana		CHRISTOPHER S. MURPHY, Connecticut
    TODD YOUNG, Indiana			ELIZABETH WARREN, Massachusetts
    ORRIN G. HATCH, Utah			TIM KAINE, Virginia
    PAT ROBERTS, Kansas			MAGGIE HASSAN, New Hampshire
    LISA MURKOWSKI, Alaska			TINA SMITH, Minnesota
    TIM SCOTT, South Carolina		DOUG JONES, Alabama

                   David P. Cleary, Republican Staff Director
             Lindsey Ward Seidman, Republican Deputy Staff Director
                     Evan Schatz, Democratic Staff Director
                 John Righter, Democratic Deputy Staff Director

                                C O N T E N T S

                                  ----------

                                   STATEMENTS

                            THURSDAY, JULY 26, 2018

                                                                       Page

                               Committee Members

    Alexander, Hon. Lamar, Chairman, Committee on Health, Education,
      Labor, and Pensions, Opening statement.........................     1
    Murray, Hon. Patty, Ranking Member, a U.S. Senator from the State
      of Washington, Opening statement...............................     3

                                   Witnesses

    King, Montez, Executive Director, National Institute for
      Metalworking Skills, Fairfax, VA...............................     5
        Prepared statement...........................................     7
        Summary statement............................................    66
    Holland, Michael, Chief Operating Officer, Marek, Houston, TX....    66
        Prepared statement...........................................    68
        Summary statement............................................    70
    Vito, Sandi, Executive Director, 1199 SEIU Training and
      Employment Funds, New York, NY.................................    71
        Prepared statement...........................................    73
        Summary statement............................................    76
    Johnson, Glenn, Workforce Development Leader, BASF Corporation,
      Houston, TX....................................................    77
        Prepared statement...........................................    79
        Summary statement............................................    84

                          MODERNIZING APPRENTICESHIPS
                            TO EXPAND OPPORTUNITIES

                            Thursday, July 26, 2018

                                           U.S. Senate,
           Committee on Health, Education, Labor, and Pensions,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 11:03 a.m. in
    room SD-430, Dirksen Senate Office Building, Hon. Lamar
    Alexander, Chairman of the Committee, presiding.
        Present: Senators Alexander [presiding], Isakson, Cassidy,
    Young, Scott, Murray, Casey, Bennet, Baldwin, Warren, Kaine,
    Hassan, Smith, and Jones.

                     OPENING STATEMENT OF SENATOR ALEXANDER

        The Chairman. The Senate Committee on Health, Education,
    Labor, and Pensions will please come to order.
        Senator Murray and I will each have an opening statement. I
    will introduce the witnesses and then we will hear from the
    witnesses. Senators will each have 5 minutes to ask questions.
        We are here today to explore ways to modernize
    apprenticeships, which are training programs that allow workers
    to earn and learn at the same time.
        Let me tell you the story of a couple of hypothetical
    Tennesseans who are interested in earning money while they
    learn job skills.
        A high school senior, let us call him Jason from Nashville,
    has decided he wants to be an electrician. Jason might join a
    middle Tennessee electrical contractor as an apprentice in a
    federally registered program. He would learn the skills he
    needed on the job while also receiving technical instruction in
    the classroom.
        At the end of the apprenticeship, Jason would have a
    certificate that demonstrates that he has the skills to be a
    successful electrician, such as safely running wire, and he
    could use that certificate to find work in Nashville or
    anywhere else around the country.
        Or, take Samantha from Memphis. While taking classes at a
    local community college, she hears about an apprenticeship
    program started by a local insurance firm to train insurance
    claims handlers.
        Even though it was not registered with the Department of
    Labor, the program was designed by industry experts to help
    Samantha receive the skills she would need to be successful in
    the insurance industry, such as analytical and investigatory
    skills. Just like Jason, Samantha would be able to get the
    instruction and skills she needs while earning money at the
    same time.
        For millions of Americans who are looking for ways to
    improve their skills, make a good wage, and live the American
    Dream, high quality apprenticeship programs, whether federally
    registered or not, are a smart path forward.
        The United States is in the midst of the best economy in 18
    years. In one month this year, the unemployment rate fell as
    low as it has been since 1969, nearly half a century ago.
        In recent months, we have seen the lowest rate of African
    American unemployment since the Federal Government started
    keeping track of unemployment.
        In this booming economy, still there are 6.6 million job
    openings, and what I hear from Tennessee employers is that they
    need more skilled workers.
        The shortage of skilled workers is something the Trump
    administration has been actively working on, and just last week
    announced an executive order aimed at training more Americans
    for these jobs.
        Congress is doing our part. On Monday, the Senate passed an
    update to the Perkins Career and Technical Education Act, which
    this Committee worked on, a nearly $1.2 billion Federal program
    of grants to states that help fund Career and Technical
    Education programs at high schools and community colleges. And
    states spend nearly 10 times that much each year on Career and
    Technical Education.
        That bill is on its way to the President's desk, because
    the House passed it yesterday.
        A second way for workers to learn new skills is what we are
    looking at today: apprenticeships. Apprenticeships have been
    around since the Middle Ages. In America, Paul Revere learned
    the family silversmith business as an apprentice and Elvis
    Presley apprenticed as an electrician before he recorded
    ``Jailhouse Rock.''
        In 2017, the United States had approximately 533,000
    apprentices in federally Registered Apprenticeship programs,
    training to become electricians, carpenters, craft laborers, or
    plumbers.
        In 1937, Congress created these federally Registered
    Apprenticeships, which means they are certified by the
    Department of Labor or state agencies as meeting certain
    requirements.
        Today, federally Registered Apprenticeships are especially
    concentrated in construction and manufacturing, and work well
    for many employers and workers.
        A federally Registered Apprenticeship program must meet a
    number of prescriptive requirements. For example, the number of
    experienced workers to apprentices.
        Another type of apprenticeship is the ``Industry Recognized
    Apprenticeship,'' which has other characteristics. They are an
    alternative to federally Registered Apprenticeships, with more
    flexible requirements developed by industry and less
    administrative tape.
        The requirements for a federally Registered Apprenticeship
    may not meet the needs of every workforce. Growing industries,
    such as health, finance, and information technology, have not
    historically harnessed the potential of apprenticeships, and
    are facing a shortage of skilled workers.
        The hope is that with a modernized approach to
    apprenticeships, industries that were not around when Paul
    Revere was training to be a silversmith, or even when Elvis was
    learning to be an electrician, would be able to start
    apprenticeship programs.
        Senator Murray.

                      OPENING STATEMENT OF SENATOR MURRAY

        Senator Murray. Well, thank you, Chairman Alexander.
        I want to thank all of our witnesses for being here today,
    especially Ms. Sandi Vito from the 1199 SEIU Training and
    Employment Funds.
        Ms. Vito, I look forward to hearing from you on how your
    program is helping workers in the health care sector get the
    training and skills they need to succeed in our changing
    economy. And about the impact, in many cases negative, that
    some of this Administration's proposals would have on workers,
    and businesses, and our economy.
        As we have talked about in this Committee before, our
    economy continues to grow and change with new technologies and
    industries. Unfortunately, too many workers, and businesses,
    and local communities are still struggling.
        Workers are still struggling to find good paying jobs to
    support their families. Businesses are still struggling to find
    workers with the skills and training to do in-demand jobs. And
    as a result, local communities across the country are still
    struggling to adapt and modernize in a 21st century economy.
        It is clear there is a lot of work that needs to be done to
    fill the skills gap in this country. So I am really pleased we
    are having this hearing today.
        But instead of reinventing the wheel of workforce training,
    I think it is important to highlight what is working in our
    Nation's job training programs. Registered Apprenticeships have
    long been considered the gold standard of workforce training.
        They give workers structured, on the job training focused
    on in-demand skills and competencies needed in the occupation
    with nationally recognized credentials employers can trust.
    They guarantee workers are able to advance their careers and
    that their pay increases with their skills and training.
        There is a lot working in Registered Apprenticeships. That
    is thanks, in large part, to the leadership unions have taken
    for almost a century in ensuring these workforce training
    programs are high quality, while protecting workers.
        For example, the building trade unions are the largest
    providers of registered apprenticeships in the United States,
    investing over $1 billion a year in training skilled workers in
    the construction industry at over 1,600 training sites around
    the country.
        As our economy changes, and industries and technologies
    advance, we should be looking for ways to mirror what the
    building trades are doing to other sectors of our economy.
        I hope today instead of getting distracted by shiny, new
    programs that are, unfortunately, set up to be low quality or
    unaccountable or ineffective, we should focus on strengthening
    and modernizing our current Registered Apprenticeship programs.
        There are a number of steps we can take to achieve this
    goal:
        First, we should work to increase the historically
    bipartisan investments and resources for apprenticeship
    programs, both in traditional and in new industries.
        I was proud to work with Senator Isakson and others in 2014
    to pass the bipartisan Workforce Innovation and Opportunity
    Act. I am hoping we can keep working together to build on that
    to support a full range of high quality workforce training
    programs, Registered Apprenticeships included.
        Second, we should find ways to update current
    apprenticeship programs to support workers and businesses in
    new fields, especially in growing industries with clear paths
    to the middle class.
        Finally, we do need to support and encourage more
    intermediaries that create partnerships among employers, and
    educators, and workers to create high quality apprenticeship
    programs that benefit everyone. Ms. Vito, your SEIU Training
    and Education Funds are a perfect example of that.
        One recent study found that one-fifth of all new jobs are
    going to be in the health care sector. So I look forward today
    to hearing how your Training Fund partners with hospitals and
    employers around the country, and supports nurses and other
    health care professionals with the training and skills they
    need to advance in their careers and meet the growing need for
    skilled workers in that field.
        If we do these things, there is no need to have
    duplicative, confusing, low quality programs that do not
    protect workers or provide them with the full range of skills
    to succeed at any job in their field, not just the one they are
    currently in.
        Now unfortunately, it seems President Trump does not agree
    with this. He is more interested in getting credit, it seems,
    at flashy executive order signings on television than helping
    our workers and businesses actually succeed.
        If you look at what he is actually trying to do, it is
    clear why this is a bad idea. His proposals would actually:
        Weaken and water down our current Registered Apprenticeship
    programs in a way that would weaken worker protections;
        Remove the focus of equity and equal opportunity;
        Lower the quality of credentials and training; and,
        Provide taxpayer dollars to unaccountable organizations,
    including for profit colleges and corporations, without any
    quality assurance or real accountability.
        If he were serious about job training, he would stop
    consistently proposing to cut the funding for workforce
    training programs, including Registered Apprenticeships and the
    bipartisan Work Force and Innovation Opportunity Act and,
    instead, work with us to improve and modernize the Registered
    Apprenticeship programs that we do have now.
        I hope this Committee will reject those misguided
    proposals. I hope that this Committee can work together, just
    as we did to reauthorize the Perkins and Technical Education
    Act, to reject the partisan ideology, and really work together
    to improve workforce training and Registered Apprenticeships.
        Thank you.
        The Chairman. Thank you, Senator Murray.
        We welcome each of our witnesses. If you could summarize
    your remarks in 5 minutes or so, that would give the Senators
    time to have a conversation with you.
        The first witness we will hear from today is Montez King.
    Mr. King is the Executive Director for the National Institute
    for Metalworking Skills in Fairfax, Virginia.
        He began his career as a machinist's apprenticeship at
    Teledyne Energy Systems, and now works to develop national
    standards and competency-based credentials in the manufacturing
    trades.
        Michael Holland is the Chief Operating Officer for MAREK, a
    construction firm with locations across Texas, as well as
    Atlanta, Georgia, and Nashville.
        Mr. Holland serves as a Board Member and past President of
    the Associated Builders and Contractors trade association,
    Houston Chapter.
        Third, we have Sandi Vito. Ms. Vito is the Executive
    Director of the 1199SEIU Training and Employment Funds in New
    York City. Her experience includes serving as Secretary of the
    Pennsylvania Department of Labor & Industry, and that
    Department's Deputy Secretary for Workforce Development.
        Our fourth witness today is Glenn Johnson from Houston,
    Texas. He is the Workforce Development Leader for the BASF
    Corporation, a chemical manufacturer with more than 15,000
    employees in 148 locations in the United States, including two
    in Tennessee.
        Welcome, again, to all of our witnesses.
        Mr. King, please begin your testimony.

        STATEMENT OF MONTEZ KING, EXECUTIVE DIRECTOR, NATIONAL
          INSTITUTE FOR METALWORKING SKILLS, FAIRFAX, VIRGINIA

        Mr. King. Good morning.
        My name is Montez King and I am the Executive Director of
    NIMS, the National Institute for Metalworking Skills. We
    develop skill standards, credentials, and training frameworks
    for advanced manufacturing and related industries.
        I want to thank Senator Alexander, and Senator Murray, and
    the Senate HELP Committee for having me today to talk about a
    topic that is very close to me.
        I was honored to serve on Secretary Acosta's Task Force for
    Apprenticeship Expansion, charged with identifying strategies
    to expand apprenticeships. Our work together culminated in a
    recently released report that includes recommendations on how
    to bring apprenticeships into the 21st century and ensure
    widespread access and utility.
        Now, apprenticeship in its basic form really works. I think
    all of us can agree to that, but the Registered Apprenticeship
    system has barely changed since it was established in the
    1930's and is burdened by rules and restrictions. Because of
    this prescriptive nature, it is sometimes unappealing to
    companies.
        But what if there was an alternative? What if a new model
    of apprenticeship recognized and encouraged innovation and
    creativity?
        This alternative is coming to fruition through the
    Industry-Recognized Apprenticeship Program, also known as IRAP.
    This new model recognizes that you do not grow something by
    creating more rules, but by creating an environment of
    innovation and excellence, and offering greater flexibility to
    both employers and apprentices.
        Perhaps the best way for me to describe the differences
    between the two models is through a metaphor of LEGO blocks.
        [Chart.]
        Mr. King. On the right of me, I have the IRAP model. This
    is an alternative. To my left, I have the registered model.
        To the right, this model is a platform that uses different
    LEGO blocks to build a house. Rather than rules and
    restrictions, IRAP is a set of quality metrics. Each LEGO block
    is a quality metric to measure quality. The companies can use
    these metrics to design and build their program specific to
    their needs.
        On the registered side, this model does not give that much
    flexibility. Instead, it is a LEGO house that is built already.
    It is unable to meet the needs of every company, maybe some
    companies, but not every company. Companies must conform to the
    limitations within the house.
        For example, we are currently working with Raytheon's
    Missile Systems Division to launch an apprenticeship program,
    and this design uses quality metrics included in the IRAP
    model, but it exercises creativity and ingenuity that cannot be
    implemented within the rules and restrictions of the Registered
    Apprenticeship. The existing house just does not work.
        This design is revolutionizing the culture of Raytheon and
    is accelerating learning at a velocity parallel to the
    innovative technologies of their organization. Innovation and
    technologies require innovation in training.
        Appendix B of my written testimony provides more details of
    Raytheon's design, but here is an example of the cultural
    change that is taking place within the organization.
        Prior to implementing this design, I asked Raytheon's
    leadership the following questions. How many machinists do you
    employ? The answer was, ``Roughly 500.'' How many of those
    machinists are apprentices? The answer was, ``Maybe 15.''
        Here are the answers to the same questions after
    implementing this new design. How many machinists do you
    employ? It was the same, ``Roughly 500.'' How many of those
    machinists are apprentices? The answer changed, ``Every
    machinist in our organization is an apprentice. Even our
    support staff can tap in and out of the apprenticeship program
    at will.''
        A salesperson or an estimator can tap into their
    apprenticeship program to perform their jobs better. You see,
    innovation is the real driver of expansion, not rules and
    restrictions.
        Raytheon's apprenticeship design is just one example of how
    an Industry-Recognized Apprenticeship Program can be applied.
    There is truly limitless potential.
        Again, apprenticeship works, but we must allow innovation
    and creativity.
        I want to thank you for your time and I welcome you for
    questions.
        [The prepared statement of Mr. King follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                       [summary statement of montez king]
        Apprenticeship in its basic form has long been a staple of
    workforce preparation in this country. Its core components like blended
    learning and mentorship make it a successful work and learn model,
    providing an alternative to traditional, costly education pathways for
    individuals to access good-paying jobs. The Registered Apprenticeship
    system we have today is burdened by rules and restrictions and
    counterproductive to our Nation's economic imperative to innovate and
    evolve. The system pushes businesses into a ``one size fits all'' box,
    is not able to easily adapt to changes in industry, and is unattractive
    to individuals who may look to programs like apprenticeships to launch
    their careers and seek economic betterment through more flexible
    education opportunities. Because of the proscriptive nature of the
    Registered Apprenticeship, it is proving to be an unappealing
    proposition for companies and prospective recruits, and has limited
    applicability in new and emerging business sectors.
        But there is a new industry-recognized model of apprenticeship on
    the horizon that recognizes and encourages innovation and creativity,
    and will open work and learn opportunities for a diverse range of
    occupations and job levels. This new industry-driven model is the
    Industry-Recognized Apprenticeship Program, a model described in the
    final report of the Task Force on Apprenticeship Expansion as the
    vehicle for remodeling and expanding apprenticeship to meet the needs
    of the modern economy. This new model recognizes that you don't grow
    something by creating more rules, but by creating an environment of
    innovation and excellence. Through the Industry-Recognized
    Apprenticeship platform, companies can build their own customized
    apprenticeship, designing work and learn programs that fulfill their
    workforce needs and create greater probabilities of success for
    participants.
        NIMS is working with Raytheon to develop an Industry-Recognized
    Apprenticeship that creates a work and learn training system and
    includes apprenticeship opportunities for diverse occupations and job
    levels. The result is a structured on-the-job training system that
    delivers quality talent to the company, provides a long-term talent
    management solution, and accommodates the wave of working learners
    representing a large portion of the current and future labor force.
    This new model not only changes the trajectory of talent acquisition
    for the company, but also changes the culture of training from one that
    focuses just on the entry-level to one that is inclusive of every
    company employee, regardless of position or occupation.
                                     ______

        The Chairman. Thank you, Mr. King.
        Mr. Holland, welcome.

     STATEMENT OF MICHAEL HOLLAND, CHIEF OPERATING OFFICER, MAREK,
                             HOUSTON, TEXAS

        Mr. Holland. Good morning, Chairman Alexander, Ranking
    Member Murray, and Members of the Committee.
        Thank you for allowing me to be with you today to discuss
    the important topic of modernizing apprenticeships to expand
    opportunities.
        My name is Mike Holland and I am the Chief Operating
    Officer of the Marek Companies. I am testifying today on behalf
    of Associated Builders and Contractors. A.B.C., and its 21,000
    members, are leaders in workforce development and
    apprenticeships. This year A.B.C., and its members, will spend
    over $1 billion educating and up-scaling approximately 450,000
    construction professionals.
        MAREK is a specialty interior contractor founded more than
    80 years ago operating in Texas, Georgia, and Tennessee. We
    offer services from drywall, painting, ceilings, and acoustical
    solutions to innovative services related to 3-D modeling,
    scheduling, and integrated project delivery.
        I have been with MAREK for my entire 47 year career in the
    construction industry. I am an example of the rewarding and
    fulfilling careers that working with your hands can provide. My
    motivation and commitment to workforce development stems from
    my own path and I want to give all Americans the opportunity to
    build successful careers in any path they choose.
        We are here today because as a country, we need to do a
    better job of equipping our youth with the skills necessary to
    succeed in the 21st century. We should also work to give
    displaced or underemployed citizens a second chance at reaching
    the middle class.
        If the collective efforts of our government and my industry
    were working at maximum effectiveness, we would not be here
    having this conversation today. That is why I am happy to be
    here with you so the public and private sector can work
    together to give Americans more opportunities to learn skills,
    earn family sustaining wages, and grow their careers.
        I want to commend the Members of this Committee for working
    together to pass the reauthorization of the Perkins CTE Act.
    That was a great, bipartisan effort that will help many
    Americans.
        In my written testimony, I offer specific recommendations
    about how we can create more apprenticeship opportunities.
    Because a small percentage of the construction industry is
    developed through Department of Labor Registered
    Apprenticeships, I believe government policies should be more
    reflective of how the industry is actually training its craft
    workers. Department of Labor Registered Apprenticeships are one
    way of teaching people skills, but they are often inefficient,
    not reflective of the market's demand, and carry enormous
    burdens to stay in compliance.
        Instead of promoting Registered Apprenticeships, I
    encourage you to promote all apprenticeships, both market
    driven and those that are government defined.
        I am critical of the Registered Apprenticeship system, but
    I also want to be critical of the private instruction market.
    The Government and industry need to be doing more. There are
    successful programs and collaboratives in the workforce arena,
    but we have not managed to replicate those best practices
    broadly.
        I want to share an example of a successful Collaborative
    that highlights my industry, recognizes a problem, and comes
    together to drive change and create opportunities.
        That example is C3, the Construction Career Collaborative
    based in Houston Texas. C3 is an alliance of construction
    owners, general contractors, and specialty contractors with a
    mission to develop a safe, skilled, and sustainable craft
    workforce.
        As a private industry solution, C3 is built on three
    principles. One, is to advance the financial security, health,
    and well-being of the construction craft workforce through a W-
    2 employer relationship, as opposed to independent contractors.
        Two, to actively implement and support the best
    construction safety practices; currently OSHA 10 and 30
    training.
        To commit to the development and delivery of continuous
    skills training linked to construction career paths for the
    craft workforce; credentials that are portable and stackable.
        These principles are mandated by project owners who do so
    in their enlightened self-interest, then insert them into the
    project requirements for the general contractor and the
    specialty contractors to follow.
        At C3, we are literally teaching our competitors how to
    build a safe, constructive, and successful workforce
    development program at their companies. To date, ten owners
    that endorsed C3 have designated their projects for C3 status.
        Fundamentally, we are reshaping the supply chain for
    procuring construction labor and thus the way employers think
    about their own needs for workforce. I believe this is the
    missing element in workforce development. When it comes to
    training, the contractor employer sits at the top of the supply
    chain. If their needs are clearly articulated, the network of
    providers becomes clear.
        I share this as a positive example of industry taking it
    upon itself to address their needs. I hope other industries
    recognize the value in the apprenticeship model and also commit
    to equipping workers with the skills they need to succeed.
        I want to thank you for allowing me to present today and I
    am ready to field any questions you may have.
        [The prepared statement of Mr. Holland follows:]
                     prepared statement of michael holland
        Chairman Alexander, Ranking Member Murray and Members of the U.S.
    Senate Committee on Health, Education, Labor and Pensions, thank you
    for allowing me to be with you today to discuss the important topic of
    modernizing apprenticeships to expand opportunities. My name is Mike
    Holland, and I am the chief operating officer of MAREK Companies.
        I am testifying today on behalf of Associated Builders and
    Contractors, a national construction industry trade association
    established in 1950 that represents more than 21,000 members. Founded
    on the merit shop philosophy, ABC and its 70 chapters help members
    develop people, win work and deliver that work safely, ethically and
    profitably for the betterment of the communities in which ABC and its
    members work. ABC and its members are committed to spending over $1
    billion on apprenticeships, earn-and learn opportunities and other
    programs to educate more than 450,000 construction workers this year.
        One of those 21,000 companies is my company, MAREK, which was
    founded more than 80 years ago, and operates in Texas, Georgia, and
    Tennessee. As a specialty interior contractor, MAREK offers commercial
    and residential services from drywall framing, flooring, ceilings and
    acoustical solutions to innovative professional services related to 3-D
    modeling, scheduling, and integrated project delivery. MAREK is an
    industry leader because of our unwavering commitment to safety and our
    workforce.
        I am an example of the rewarding and fulfilling careers the
    construction industry can provide. After 2 years of college, I realized
    that college was not the best path for my future so I dropped out and
    enrolled as a drywall apprentice. During my 3 years in the drywall
    field, I committed myself to learning new skills and advancing my
    career in construction. I rose through the industry as a project
    manager, sales manager, branch manager, and was eventually appointed
    MAREK's chief operating officer in 2015. My motivation and commitment
    to workforce development stems from my own path, and I want to give all
    Americans the opportunity to build successful careers in the
    construction sector.
        Today, I hope to paint a picture of what workforce development
    looks like in the construction industry, and how workers are achieving
    their dreams through industry-recognized apprenticeship programs. I
    will offer recommendations and suggestions that will open more
    opportunities for students, women, minorities, veterans, non-graduates,
    and people seeking new careers, re-entry into the workforce or a second
    chance.
        MAREK would not be the thriving company it is today without our
    skilled and dedicated team of craft professionals. We recognize our
    employees are the foundation on which our success is built, and why we
    strive to attract and retain the best talent available. A job at MAREK
    is just the beginning of a long and rewarding career. We treat our
    employees like the talented experts they are, offering competitive
    wages and salaries, healthcare benefits, on-the-job training programs
    and opportunities for career advancement. We take pride in building
    strength from within.
        All of MAREK's workforce development and education is delivered
    through industry-recognized apprenticeship programs with the primary
    focus on safety. An industry-recognized apprenticeship program is a
    structured career development ladder developed by the private
    construction market. It is a paid position, which costs nothing to
    taxpayers, and includes classroom instruction along with supervised on-
    the-job training. Our programs are competency-based, which means that
    apprentices advance as they master each skill, or become competent.
    Rather than a specific time requirement for advancement, we require
    that a worker know and demonstrate their skills--which allows the
    highest performing employees to advance quicker. It also ensures
    apprentices who may struggle learning a skill not get left behind. The
    vast majority of workers in the construction industry are trained in
    industry-recognized programs. \1\
    ---------------------------------------------------------------------------
        \1\  https://doleta.gov/oa/data_statistics.cfm; https://
    www.bls.gov/iag/tgs/iag23.htm.
    ---------------------------------------------------------------------------
        For classroom content, we use select curriculum from NCCER--founded
    in 1996 as the National Center for Construction Education & Research--
    which we combine with custom MAREK content. NCCER, which was started by
    120 construction CEOs, associations and academics who identified the
    need for a standardized training and credentialing program, provides
    portable curriculum that results in an industry-and nationally
    recognized credential. Across sectors, NCCER can and should serve as a
    model for other industries looking to develop their own standardized
    apprenticeship programs, which will allow industry leaders to combine
    resources and develop a standard set of credentials for all positions.
        MAREK's education programs are structured to provide the highest
    value to our workforce and our clients. Once a MAREK employee completes
    a NCCER module, they can sit for a credential exam. If they pass, they
    receive a stackable and portable industry-recognized credential.
    Therefore, if an employee decides to leave our company, they can prove
    their knowledge and demonstrate their skills with that credential
    anywhere and at any jobsite in the country. An important issue
    discussed later in this testimony is the Federal Government's
    resistance to accepting industry-recognized credentials, which limits
    opportunities for millions of workers.
        MAREK has developed an education system that we believe provides
    limitless opportunities for all our workers. For example, once an
    employee has graduated from one of our apprentice programs and gained
    experience in the field, they can enter our foreman field leader
    training program. We have multiple examples of strong candidates who
    have progressed from entry-level apprentice to entry-level leadership
    roles within 5 years. This program is also available to incumbent
    workers. At MAREK, we believe continuing education should be a lifelong
    endeavor and that all employees regardless of age should have the
    opportunity to earn a leadership position.
                                  Recruitment
        As the Members of this Committee know, America is facing an
    enormous workforce shortage. There are currently six million open jobs
    in the United States and 500,000 of those are in the construction
    industry. At MAREK, we are taking proactive steps to give Americans
    terrific opportunities in the construction industry by partnering with
    high schools and nonprofit community organizations to educate students
    about the lucrative and rewarding careers in the skilled trades.
        We have also partnered with Texas A&M University to better target
    underrepresented populations to grow and diversify our workforce. In
    addition, we have committed significant resources to bringing women
    into our industry. While there is a stigma that construction is a man's
    job, nothing could be farther from the truth. We have a ``Women at
    MAREK'' initiative and offer peer advisors for our female employees. We
    want to create a welcoming environment for all our employees.
        Partnering with community groups and nonprofits, such as the United
    Way, has helped us to hire individuals experiencing hardships. These
    partnerships are critical to helping disadvantaged Americans and rely
    on two-way communication. The United Way contacts us when they believe
    they have an individual that would be a great fit for our company and
    we reach out to them when there are roles to be filled. If our
    employees are struggling with sections of a test to obtain credentials,
    we partner with adult education centers to ensure they have the
    attention they deserve.
                 How We Can Expand Apprenticeship Opportunities
        Our apprenticeship programs are constantly modernizing to provide
    the best possible development opportunities to our workforce. Roughly
    10 years ago, we made the decision to train some of our workforce with
    Department of Labor-registered apprenticeship programs, and committed
    significant company resources to ensure we were in full compliance. We
    made this decision because we wanted to bid on Federal construction
    projects, and to win those contracts, it is practically required that
    you use DOL-registered apprenticeships.
        After 6 years, we ultimately decided to de-register and instead
    exclusively utilize our in-house development program. We found the
    DOL's hours requirements inflexible and somewhat arbitrary because the
    instruction is based on time in the classroom, not on the jobsite. And
    when DOL requires apprentices to sit in the classroom after they have
    already demonstrated their knowledge on the jobsite, it hinders their
    growth and prevents them from advancing onto the next skill. Without
    compromising our unwavering focus on safety, our program is more
    flexible and allows someone to master skills and progress at their
    desired speed.
        In our experience, apprentices and instructors experienced burnout
    with the DOL-registered program's extensive after-hours classroom
    requirements because it was not flexible enough to accommodate business
    fluctuations, which led to both some apprentices dropping out and
    instructors choosing not to participate as mentors.
        The purpose of sharing this story is not to criticize DOL-
    registered programs, and especially not graduates, but to demonstrate
    the difficulties that many companies face in administering these
    programs. I hope that the lessons I share can spur change to create
    more apprenticeship opportunities for more people.
        While MAREK had the resources to register a DOL program, de-
    register it, and return to our successful industry-recognized training
    method, unfortunately, most small-and medium-sized businesses do not
    have that luxury. The reporting requirements are often duplicative and
    stretched our smaller branches to their administrative capacity. As a
    company, we had to divert resources away from education and training
    and put them toward paperwork, which ultimately hurt our workers and
    their families. DOL's assistance often felt like requirements rather
    than recommendations.
        DOL's rigid apprenticeship programs are one of the reasons why most
    of the construction industry chooses to train their workforce through
    the industry-recognized model. As I mentioned, this model allows
    employees the flexibility to progress at their own speed and obtain
    nationally recognized, portable and stackable credentials.
        Unfortunately, the Federal Government does not recognize this
    successful model when procuring their construction projects. Because of
    Davis-Bacon requirements, only apprentices in DOL-registered programs
    can be considered ``apprentices'' under the law's job classifications.
    When you are a DOL-registered apprentice, you can be paid a wage
    relative to your experience. On the other hand, if you are an industry-
    recognized apprentice working on a Federal project, the government
    mandates that you are paid the same wage as your more experienced, more
    skilled peers.
        As an example, this would be equivalent to allowing construction
    workers in one state to be paid wages based on experience and
    education, but all workers in a different state to be paid the same,
    regardless of skill level. This unfair advantage and preference to DOL-
    registered apprenticeships dramatically reduces the amount of people
    that can be trained in our industry and limits opportunities for all.
        According to the recently published DOL task force report on
    expanding apprenticeship opportunities, an apprenticeship is an
    arrangement that includes a paid-work component and an educational or
    instructional component, wherein an individual obtains workplace
    relevant knowledge and skills. The apprentices at MAREK and in other
    industry-recognized programs are paid, receive on-the-job training and
    classroom instruction, and earn a stackable, portable credential. If a
    company is forced to pay that apprentice the same as his or her more
    experienced peers, then that company may not be able to afford to bid
    on a Federal project. This decision is passed down the chain and ends
    up hurting the apprentice the most, as they will have less on-the-job
    experience, mentoring by company leaders or the wage for a day's hard
    work.
        I urge Members of this Committee to work together to open more
    apprenticeship opportunities. Without arguing the merits of Davis-
    Bacon, there are simple reforms that would allow apprentices in
    industry-recognized programs to have the same opportunities that those
    in DOL-registered programs have. The system should be equal and fair to
    all.
        Chairman Alexander, Ranking Member Murray and Members of the
    Committee: thank you once again for inviting me to participate in
    today's hearing. I look forward to working together to expand
    apprenticeship programs and give all Americans the opportunity to build
    successful careers.
                                     ______

                     [summary statement of michael holland]
        My name is Mike Holland, and I am the chief operating officer of
    MAREK Companies. I am testifying today on behalf of Associated Builders
    and Contractors. MAREK is a specialty interior contractor offering
    commercial and residential services in Texas, Georgia, and Tennessee. I
    started in the construction industry as a drywall apprentice after
    dropping out of 2 years of college. I rose through the ranks as a
    project manager, sales manager, branch manager and eventually was
    appointed MAREK COO in 2015.
        My goal today is to paint a picture of what workforce development
    looks like in the construction industry and offer recommendations about
    how the public and private sectors can help open apprenticeship
    opportunities. All of MAREK's workforce development and education is
    delivered through industry-recognized apprenticeship programs with the
    primary focus on safety. An industry-recognized apprenticeship program
    is a structured career development ladder developed by the private
    construction market. It is a paid position, which costs nothing to
    taxpayers, and includes classroom instruction along with supervised on-
    the-job training.
        For classroom content, we use select curriculum from NCCER which we
    combine with custom MAREK content. NCCER, which was started by 120
    construction CEOs who identified the need for a standardized training
    and credentialing program, provides portable curriculum that results in
    an industry-and nationally recognized credential. If an employee
    decides to leave our company, they can prove their knowledge and
    demonstrate their skills with that credential anywhere and at any
    jobsite in the country.
        As Senators know, America is facing an enormous workforce shortage.
    There are currently six million open jobs in the United States and
    500,000 of those are in the construction industry. We are proactively
    recruiting women, underserved populations and folks experiencing
    hardships through partnerships with nonprofits and community groups.
        Roughly 10 years ago, we made the decision to train some of our
    workforce with Department of Labor-registered apprenticeship programs
    because we wanted to bid for Federal contracts. After 6 years, we
    ultimately decided to de-register because we found the DOL's hours
    requirements inflexible and somewhat arbitrary because the instruction
    is based on time in the classroom, not on the jobsite. Without
    compromising our unwavering focus on safety, our program is more
    flexible and allows someone to master skills and progress at their
    desired speed.
        Unfortunately, the Federal Government does not recognize our
    successful training method when procuring Federal projects because our
    trainees cannot be considered ``apprentices'' under Davis-Bacon job
    classifications. This decision is passed down the chain and ends up
    hurting the apprentice the most, as they will have less on-the-job
    experience, mentoring by company leaders or the wage for a day's hard
    work.
        Without arguing the merits of Davis-Bacon, there are simple reforms
    that would allow apprentices in industry-recognized programs to have
    the same opportunities that those in DOL-registered programs have.
                                     ______

        The Chairman. Thank you, Mr. Holland.
        Ms. Vito, welcome.

    STATEMENT OF SANDI VITO, EXECUTIVE DIRECTOR, 1199 SEIU TRAINING
                AND EMPLOYMENT FUNDS, NEW YORK, NEW YORK

        Ms. Vito. Good morning, Chairman Alexander, Ranking Senator
    Murray, and the Members of the Committee.
        Thanks for the opportunity today to present and testify
    before you about the important role Registered Apprenticeships
    play in our workforce system.
        My name is Sandi Vito. I am the Executive Director of the
    1199 SEIU Training and Employment Funds, and also the President
    of the Health Career Advancement Project Education Association.
        First, the Training and Employment Funds operate as
    industry partnerships jointly governed by the largest health
    care local union in the country and health care employers from
    across New York, Massachusetts, Maryland, Washington, DC, and
    Florida.
        We administer education benefits on behalf of more than
    250,000 workers and 450 employers. Each year, we provide
    training, workforce development, and allied health degree
    programs for 35,000 frontline health care workers.
        The Health Career Advancement Project, or H-CAP, is our
    national organization. Our Training Funds along with other
    training funds from across the country, employers, and unions
    collaborate through H-CAP. This national network encompasses
    nearly 1,000 employers and 600,000 workers in the health care
    industry.
        H-CAP also currently serves as the contractor for the U.S.
    Department of Labor to support the expansion of apprenticeships
    in the health care sector.
        Modern health care has not traditionally used
    apprenticeships with any frequency. However, over the last 2
    years, with H-CAP's support, apprenticeships in more than 17
    health care occupations have been registered either nationally
    or locally. The employer sponsors of apprenticeships are
    varied, large and small, from Kaiser Permanente in California
    to Mount Sinai Health System in New York City.
        While our network of training funds and industry
    partnerships administer a myriad of training and education
    programs, Registered Apprenticeships are, as Senator Murray,
    said, the gold standard of workforce development.
        A ``New York Times'' article recently cited two studies.
    They noted an analysis of 11 different workforce training
    programs in Washington State and found that Registered
    Apprenticeships had, by far, the largest positive effect on
    short and long term salaries with an ROI, Return on Investment
    18 times the cost of the program.
        A 2012 study of 10 states found that Registered Apprentices
    earn $240,000 more over a lifetime than similar workers who had
    not gone through such a program.
        To highlight just a few of the benefits of apprenticeship,
    first of all, our employers choose apprenticeship because this
    strategy fills a labor market gap. It augments classroom
    instruction with hands-on learning under a mentor, which is, in
    many cases, the best way to gain competencies for certain
    occupations.
        The combination of formal instruction and mentored on the
    job learning is what makes apprenticeship the high quality
    standard of workforce development standards.
        Employers know that apprentices must demonstrate in a real
    world environment the skills needed to perform the job. And a
    worker with a journey certificate is guaranteed, not just to
    have the competencies, but to have labor market mobility by
    carrying that certificate. Workers obtain high wage jobs, an
    industry recognized credential, and labor market mobility.
        The wage progression feature of Registered Apprenticeships
    assures that as workers gain new skills and perform more and
    more work independently, they are appropriately paid for the
    work that they are delivering. The registration process ensures
    that apprenticeships are not just aligned to a single employer,
    but to industry standards.
        There are other work-based learning strategies, and they
    are valuable, but they are not the same as Registered
    Apprenticeships, and that distinction is very important.
        The term ``registered apprenticeship'' for nearly a
    century, denotes a level of quality to employers and workers.
    Diluting the meaning or the practice of Registered
    Apprenticeships will undermine the tradition of those high
    quality outcomes.
        As we look to the future of expansion of Registered
    Apprenticeships, and we should, the tradition of quality is the
    true benefit to workers, communities, employers, and
    industries.
        Thank you so much for the opportunity to testify today, and
    I am happy to take any questions at the appropriate time.
        [The prepared statement of Ms. Vito follows:]
                        prepared statement of sandi vito
            ``Modernizing Apprenticeships to Expand Opportunities.''
        Chairman Alexander, Ranking Member Murray, and other Members of the
    Committee, I appreciate the opportunity to testify before you this
    morning as you consider the important role that registered
    apprenticeships play in our workforce system.
        My name is Sandi Vito, I am Executive Director of the 1199SEIU
    Training and Employment Funds and President of the Healthcare Career
    Advancement Program Education Association.
        The Training and Employment Funds operate as an industry
    partnership jointly governed by 1199SEIU United Health Care Workers
    East, the largest healthcare union in the United States and health care
    employers from New York, Massachusetts, Maryland, Washington DC and
    Florida. The Funds are multi-employer Taft-Hartley trusts established
    in accordance with Section 186(c) of the Labor Management Relations Act
    of 1947 and an ``employee welfare benefit plan'' as that term is
    defined in Employee Retirement Income Security Act of 1974, 29 U.S.C.
    1001 et seq. (``ERISA''), as amended. As a multi-employer trust fund,
    the Funds are financed with contributions from employers pursuant to
    various collective bargaining agreements between 1199SEIU United Health
    Care Workers East (``the Union'') and healthcare employers.
        The Funds administer education benefits on behalf of more than
    250,000 healthcare workers and 450 employers. Each year, more than
    35,000 frontline healthcare workers receive workforce development and
    higher education benefits in allied health programs through the
    Training Funds. Through our programs we support career pathways for
    entry level healthcare workers, while meeting the workforce needs of
    employers. The Training and Employment Funds' programs include:

              Citizenship

              English as a Second Language

              High School Completion for adult learners

              College preparation

              Allied Health Certificate and Degree Programs in more
            than fifty occupations as wide-ranging as surgical technologist
            and nursing to pharmacist and social work

              Skills enhancement and continuing education to assist
            the industry with healthcare delivery system transformation

              Registered Apprenticeship

        Partnering with more than 100 colleges, the Training and Employment
    Funds' workforce development model uses an intensive support service
    model to increase completion and career advancement success rates.
        The 1199SEIU Training and Employment Funds are members of the
    Health Career Advancement Project (H-CAP), which is a national labor/
    management cooperation organization of industry partnerships across 16
    states plus Washington, DC. This national network encompasses nearly
    1,000 employers and more than 600,000 workers from all sectors of
    healthcare. Working as a national industry intermediary contractor with
    U.S. Department of Labor (USDOL) and with the support of foundations--
    such as JP Morgan Chase--H-CAP has provided technical assistance,
    subject matter expertise, shareable resources, and capacity building
    infrastructure to support the development of Registered Apprenticeship
    in healthcare.
        Modern healthcare has not traditionally been an industry in which
    registered apprenticeships are used with any frequency. However, over
    the last 2 years, through H-CAP support, more than 17 apprenticeship
    programs have been registered and implemented across the country. The
    employers associated with those apprenticeships are varied. They
    include Kaiser Permanente in California, Colorado, and soon to be in
    Washington State, Care New England in Rhode Island, University of
    Rochester--Strong Memorial Hospital in New York, Steward Health Care in
    Massachusetts, and Mount Sinai Health System and BronxCare in New York
    City.
        Other employers not associated with H-CAP or SEIU, such as, Norton
    Healthcare in Kentucky, Ochsner Health System in Louisiana, Dartmouth
    Hitchcock in New Hampshire, and Fairview Health Services in Minnesota
    have invested in registered apprenticeship programs. Registered
    apprenticeships continue to expand throughout the U.S. healthcare
    industry without sacrificing standards or quality.
        The occupations registered with the USDOL and state departments of
    labor through H-CAP support are varied, ranging from community health
    worker to medical coder. In all, 17 occupations, with two more pending,
    have been registered over the last 2 years.

        Nationally Registered Occupations:

              Advanced Home Health with Specialties (pending)

              Ambulatory Coder

              Central Sterile Processing Technician

              Community Health Worker

              Emergency Medical Technician

              Hospital Coder

              Medical Assistant

              Surgical Technologist (pending)

              Support and Retention Coordinator I and II (Home Care
            Supervisor)

        Occupations Registered at the state Level:

              Certified Nurse Assistant

              Community Health Nurse

              Direct Support Professional

              Early Childhood Educator

              In-patient Nurse Residency

              Licensed Vocational Nurse to Registered Nurse

              Paramedic

              Patient Care Technician

              Physical Therapist Aide

              Substance Abuse and Behavioral Disorder Counselors
            (LACD Counselors)

        Through H-CAP's efforts 143 people are apprenticed in these
    occupations at the national level, and, to date, a 98 percent on-time
    completion rate has been achieved. More than 350 people have been
    apprenticed at the state level.
        While the Training and Employment Funds and H-CAP's affiliated
    organizations administer many training and education programs,
    registered apprenticeships are the gold standard of workforce
    development strategies.
        The New York Times recently cited two studies, noting an analysis
    of ``11 different workforce training programs in Washington State
    [that] found . . . registered apprenticeships had by far the largest
    positive effect on short- and long-term salaries, returning 18 times
    the cost of the program in lifetime earnings. A 2012 study of 10 states
    found that registered apprentices earned $240,000 more over a lifetime
    than similar workers who hadn't gone through such a program.'' \1\
    ---------------------------------------------------------------------------
        \1\  Kevin Carey, ``Trump's Apprentice Plan Seems to Need a
    Mentor,'' New York Times, September 28, 2017.

    ---------------------------------------------------------------------------
        Both employers and workers benefit from registered apprenticeships.

              For employers, registered apprenticeships fill a
            labor market gap, augmenting instruction in areas where hands-
            on learning guided by a mentor provides new competencies that
            cannot be adequately learned in the classroom. Often didactic--
            or classroom instruction--does not fully prepare students for
            the real-life contingencies of a particular job. By combining
            formal classroom instruction with mentored on-the-job training
            and a structured learning pathway, through which apprentices
            acquire and demonstrate skill and knowledge, registered
            apprenticeships provide a high-quality learning opportunity not
            replicated in other workforce development strategies.

              Employers can trust that apprentices demonstrated, in
            a real-world environment, the skills to perform the job. The
            journeyman or apprentice certificate earned through registered
            apprenticeships benefits employers by guaranteeing that the
            competencies registered with the U.S. Department of Labor have
            been mastered.

              Participants or apprentices have the ability to earn
            while they learn, allowing talented workers to master new
            skills while continuing to support their families.

              Registered apprenticeships have protections for both
            workers and employers. For workers, as they gradually take on
            more independent responsibilities, built-in wage progressions
            ensure they are paid for the work they deliver.

              At the end of the registered apprenticeships, workers
            have jobs in their chosen field, along with labor market
            mobility, enabling apprentices who complete the program to
            obtain employment throughout the industry.

              The industry itself benefits as more workers are
            available for high-demand occupations.

        Registered apprenticeships are unique in that they have protections
    for workers, such as wage progression, and the registration ensures
    they are aligned not to a single employer's needs but to industry
    standards. Other work-based learning strategies may be valuable
    workforce development tools, but they are categorically not registered
    apprenticeships. The distinction is important. The term registered
    apprenticeships denotes a level of quality employers and workers can
    rely upon, and diluting the meaning or practice of this workforce
    strategy will undermine a tradition of high-quality outcomes.
        To share one example of the value of registered apprenticeships:
    Coding in hospitals has become more complex. Hospital based coders must
    understand more than 70,000 codes, have a grasp of anatomy and
    physiology, and possess strong interpersonal skills to ask questions of
    care providers. Local colleges were graduating coding students at a
    rapid rate. Nonetheless, the hospitals we work with in New York
    reported shortages. They were not hiring recent coding graduates.
    Instead, they were hiring coders with experience, largely from each
    other.
        The coding registered apprenticeship program provides the ability
    to combine classroom instruction with hands-on coding of real-time
    records, under the guidance of an experienced coder--or mentor.
    Apprentices are paid for their work and, as they are able to code more
    records on their own, their wages increase. At the end of the
    apprenticeship, not only does that employer have newly qualified
    workers but the entire industry's workforce has grown.
        The workers earn an associate's degree and now have a credential
    with value in the labor market. A credential they were only able to
    obtain through the earn-while-you-learn experience offered by the
    registered apprenticeship model. Workers in this apprenticeship have
    increased their wages from minimum wage to $56,000 annually.

            According to the Director of Coding at Care New England, ``We
            used Registered Apprenticeship to first, have a grow-your-own
            approach to investing in our incumbent coding staff and
            providing them with needed education and skills, and second, to
            reach out to other Care New England employees who may have an
            interest in a coding career. The Current coding staff could
            advance in their careers, and the Medical Coding department
            within the Care New England system could benefit from
            onboarding additional coders in the long term. One of the
            distinguishing features of identifying and realizing these
            goals relied on the strong labor/management collaboration
            supporting the program.'' \2\
    ---------------------------------------------------------------------------
        \2\  Jennifer Couri, Director of Coding, HIM, CDI, and Revenue
    Integrity, Care New England--Women and Infant's Hospital.

        The Training Funds implemented a Community Health Worker
    apprenticeship in New York City, and a graduate, Destina Garcia, was
    featured in a September 2017 New York Times article about the
    advantages of registered apprenticeships in healthcare. Destina's story
    illustrates the promise and value of registered apprenticeship in
    industries beyond traditional apprenticeship trades like carpentry and
    plumbing. She was one of 15 new CHWs who participated in the pilot
    registered apprenticeship, which began in November 2016.
        Destina grew up in the South Bronx, sharing a two-bedroom apartment
    with her parents, four brothers, a sister, grandmother, and uncle.
    During her childhood she watched family members deal with illnesses
    that impacted their quality of life. Her father suffered from diabetes.
    Her mother struggles with Lupus. And she lost her younger sister to a
    fatal heart attack at just 18. As the eldest child, Destina spent much
    of her time taking care of the people closest to her. These experiences
    instilled in her a desire to help others, which is why she feels
    healthcare is her calling.
        Before her apprenticeship, Destina managed to find entry-level work
    in medical records and earn certificates as a certified nursing
    assistant and emergency medical technician. However, employers were
    reluctant to hire her in those occupations because she didn't have
    relevant work experience. She was hesitant to enroll in a 4-year
    college program because of the cost and the fact that she would not be
    guaranteed a job upon graduation.
        Then, Destina learned about the groundbreaking CHW registered
    apprenticeship at BronxCare and was selected to be part of the first
    cohort of apprentices.
        CHWs connect underserved community members with critical medical
    and social services. They also educate clients about the importance of
    adopting healthy daily habits to improve their quality of life and
    reduce healthcare costs.
        As part of the registered apprenticeship, Destina took three
    classes, earning nine college credits, through LaGuardia Community
    College, CUNY. Classes were conducted onsite at the hospital. During
    the on-the-job portion of the training, she was supported by a peer
    mentor with more than 20 years experience, who Destina continues to
    stay in touch with for advice and guidance even after completing her
    apprenticeship.
        Because registered apprenticeships eliminate the school-to-practice
    gap by providing both didactic and practical experience, Destina was
    able to apply the knowledge she learned in the classroom to the work
    she was performing in close to real time. During the course of the
    apprenticeship she received two raises, bringing her salary to $42,000
    annually. Pay increases based on acquired skills and experience are an
    integral component of the registered apprentice system.
        Destina completed her apprenticeship in June 2017 and has continued
    working at BronxCare in the Population Health Department as a CHW. The
    apprenticeship served not only to support Destina in acquiring a family
    supporting job, and the industry in securing a talented and caring
    worker, but also as a gateway to future career advancement. Destina
    plans to transfer the credits earned during her apprenticeship toward a
    bachelor's in social work program at Lehman College, CUNY.
        Registered apprenticeships provide positive results for
    participants, employers and the entire healthcare industry. For
    Destina, perhaps the most important of those results was the transition
    from sporadic, lower-wage employment to a full-time position as a
    Community Health Worker making $42,000 per year.
        For employers and the industry, the value of the registered
    apprenticeship model lies in the confidence that employees will possess
    the skills and competencies required to perform their jobs well.
        The expansion of registered apprenticeships in healthcare and other
    industries is an important objective and one that should be encouraged.
    In fact, through H-CAP's continued efforts to expand apprenticeship,
    more than 700 healthcare apprentices will be engaged by the fall of
    this year.
        Expanding the registered apprenticeship model has tremendous value.
    However, it is imperative that any expansion not create a duplicative
    system that is of lower quality, with less rigorous standards than the
    registered apprenticeship model. A lower quality system would not
    adequately train participants, provide for worker protections, nor
    provide credentials employers and workers can trust.
        As we look to the future expansion of registered apprenticeship
    opportunities, the tradition of quality is the true benefit to workers,
    communities, employers and industries.
        Thank you for your time and for inviting to me testify today.
                                     ______

                       [summary statement of sandi vito]
            ``Modernizing Apprenticeships to Expand Opportunities.''
        Chairman Alexander, Ranking Member Murray, and other Members of the
    Committee, I appreciate the opportunity to testify before you this
    morning as you consider the important role that registered
    apprenticeships play in our workforce system.
        The 1199SEIU Training and Employment Funds operate as an industry
    partnership jointly governed by 1199SEIU United Health Care Workers
    East, the largest healthcare union in the United States and health care
    employers from New York, Massachusetts, Maryland, Washington, DC and
    Florida.
        The Funds administer education benefits on behalf of more than
    250,000 healthcare workers and 450 employers. Each year, more than
    35,000 frontline healthcare workers receive workforce development and
    higher education benefits in allied health programs through the
    Training Funds. Through our programs we support career pathways for
    entry level healthcare workers, while meeting the workforce needs of
    employers.
        The 1199SEIU Training and Employment Funds are members of the
    Health Career Advancement Project (H-CAP), which is a national labor/
    management cooperation organization of industry partnerships across 16
    states plus Washington, DC. This national network encompasses nearly
    1,000 employers and more than 600,000 workers from all sectors of
    healthcare.
        Modern healthcare has not traditionally been an industry in which
    registered apprenticeships are used with any frequency. However, over
    the last 2 years, through H-CAP support, more than 17 apprenticeship
    programs have been registered and implemented across the country.
        Registered apprenticeships are unique in that they have protections
    for workers, such as wage progression, and the registration ensures
    they are aligned not to a single employer's needs but to industry
    standards. Other work-based learning strategies may be valuable
    workforce development tools, but they are categorically not registered
    apprenticeships. The distinction is important. The term registered
    apprenticeships denotes a level of quality employers and workers can
    rely upon, and diluting the meaning or practice of this workforce
    strategy will undermine a tradition of high-quality outcomes.
        Expanding the registered apprenticeship model has tremendous value.
    However, it is imperative that any expansion not create a duplicative
    system that is of lower quality, with less rigorous standards than the
    registered apprenticeship model. A lower quality system would not
    adequately train participants, provide for worker protections, nor
    provide credentials employers and workers can trust.
        As we look to the future expansion of registered apprenticeship
    opportunities, the tradition of quality is the true benefit to workers,
    communities, employers and industries.
                                     ______

        The Chairman. Thank you, Ms. Vito.
        Mr. Johnson, welcome.

    STATEMENT OF GLENN JOHNSON, WORKFORCE DEVELOPMENT LEADER, BASF
                      CORPORATION, HOUSTON, TEXAS

        Mr. Johnson. Good morning, Chairman Alexander, Ranking
    Member Murray, and Members of the Committee.
        Thank you for the opportunity to appear before the
    Committee to talk about BASF's approach to workforce
    development, specifically apprenticeships, and how they fit
    within the present day and long term workforce development plan
    for BASF.
        I would like to thank you for your leadership in passing
    the Strengthening Career and Technical Education for the 21st
    Century Act to reauthorize the Carl D. Perkins Career and
    Technical Education Act, legislation for which I testified last
    year before the House Education and the Workforce Committee.
        BASF is the second largest producer of chemicals and
    related products in North America. BASF has more than 15,000
    employees in 148 locations across the U.S. At BASF, we create
    chemistry for a sustainable future. The sustainability includes
    the economy and the environment, but also people, and that is
    what I am here to talk about today.
        Twenty-two years ago, I was a proud young man living in a
    trailer park in western Kentucky with only a high school
    diploma when I began my first manufacturing job. I ran assembly
    lines, stacked cases of product, and as I worked through the
    ranks, I began to take advantage of a tuition reimbursement
    program. I progressed into leadership roles while continuing to
    train and educate with the support of my manufacturing
    employer.
        That proud man from the trailer park sits before Congress
    today to tell you that the manufacturing industry changed my
    life, and it changes peoples' lives in the same way every day.
        Alignment between the education system and the business
    community is critical to deliver the knowledge and skills
    necessary for an individual's success. Within the North
    American Process Technology Alliance, BASF joins 49 colleges,
    22 industrial organizations, and 19 vendors where we focus on
    the Process Technology Associate's Degree, as an example. This
    organization demonstrates the return on investment achievable
    within collaborative efforts.
        Dr. Robert Bartsch and I published a research paper in
    ``The Journal of Technology, Management, and Applied
    Engineering'' entitled, ``Comparing Process Technology
    Education with Work Experience,'' that demonstrated strong
    statistical evidence pointing toward collaborative value.
        With this Degree, we found that 1 year of training was
    approximately equal to 5.3 years of work experience. When
    industry and education partner together to align curriculum
    with collective needs, education is experience.
        Now, I discuss four apprenticeship models in my written
    statement, but today I will focus on one we call sequence
    apprenticeships.
        Our plan is to facilitate the development of this program
    by creating advisory committees within education programs in
    the community and technical colleges where they will agree on
    competencies, allocate competencies to education and workplace
    settings, agree on structured learning agendas, and provide
    training through a sequence of scholarships and internships.
        BASF has assembled parts of our program in Louisiana,
    Georgia, South Carolina, Pennsylvania, and Alabama. We
    identified ten educational partnerships in 2017 where we now
    provide the developmental assistance and curriculum input.
        BASF provided onsite experience and job training for 49
    future workers in 2017 and 30 in 2018, so far. Within these
    programs, BASF hired 45 workers in 2017 and 21 in 2018 thus
    far.
        We are in the process now of building enterprise wide
    programs that are systematic and portable to other priority
    sites in Tennessee, North Carolina, Kentucky, Colorado,
    Wisconsin, Virginia, and Minnesota.
        Our sequence apprenticeship model supports future workers
    in the entire degree program, not just the ones we hire. It
    increases the quality of the degree program as a whole, not
    just the apprenticeship program, resulting in higher relevance
    for the school.
        It allows flexibility for hiring managers needed to
    maximize apprenticeship hires and it allows organizations to
    help fill the pipeline for other industry partners, not just
    for themselves.
        Looking ahead, if we take no action, in the very near
    future, the jobs gap will ignite a wage war between industry
    partners. This will result in inflated wages above market and
    business models, and distressed sites will suffer first as they
    will not be able to match inflating wages.
        We will likely lose productivity, then accounts. Buyers
    will be forced to look outside the U.S., and the manufacturing
    sector will decline, and these jobs will be permanently lost.
        BASF plans to scale our activities across North America,
    and we are prepared to openly share our strategy and execution
    plan for workforce development with everyone.
        Thank you.
        [The prepared statement of Mr. Johnson follows:]
                      prepared statement of glenn johnson
                                I.  Introduction
        Good morning Chairman Alexander, Ranking Member Murray, and Members
    of the Committee. Thank you for the opportunity to appear before the
    Committee to talk about BASF's approach to workforce development,
    specifically apprenticeships and how they fit in with our present-day
    and long-term workforce development plans.
        Before talking about my company and thoughts on apprenticeships, I
    would like to thank you, Mr. Chairman and Senator Murray for your
    leadership in passing the Strengthening Career and Technical Education
    for the 21st Century Act to reauthorize the Carl D. Perkins Career and
    Technical Education Act. I testified last year before the House
    Committee on Education and Workforce in support of reauthorizing the
    Perkins Act and am encouraged to see it is progressing through the
    legislative process.
                             II.  BASF Corporation
        BASF Corporation, the North American subsidiary of BASF SE, is the
    second largest producer of chemicals and related products in North
    America. In the US, BASF Corporation has more than 15,000 employees
    across 148 locations, of which 74 are production sites and 18 are
    research and development facilities. The company has more than 1,700
    employees dedicated to research and development in the U.S. and more
    than 8,500 manufacturing employees. BASF collaborates with
    approximately 170 top North American universities, research
    institutions and companies.
        At BASF, we create chemistry for a sustainable future. Our
    customers increasingly expect consistent and innovative solutions that
    also contribute to a more sustainable future. They believe, as we do,
    that being environmentally and socially responsible goes hand in hand
    with running a profitable business. BASF has the broadest portfolio in
    the chemical industry serving customers in nearly every industry
    including: chemicals, automotive, agriculture, construction, personal
    care, health and nutrition, packaging and consumer products.
        Sustainably includes the environment and economy, but also PEOPLE;
    and that is what I am here to talk about today. We strive to attract
    and develop talent from both internal and external sources. More than
    one-third of our jobs are filled with internal candidates--which means
    two-thirds of our jobs are filled with external candidates, which leads
    to our discussion on apprenticeships. We seek the best talent from all
    sources--leading universities, business connections, trade
    associations, national diversity conferences, partnerships to hire
    veterans, historically black colleges and universities and referrals
    from our own employees.
                          III.  Filling the Skills Gap
        An estimated 3.5 million manufacturing jobs must be filled by 2025
    to meet industry needs. Due to gaps in the critical skills needed for
    these jobs, nearly two million of these jobs will go unfilled.
    Companies like BASF rely on manufacturing talent to remain competitive,
    which underscores the need for closer alignment between the education
    system and the business community. Therefore, we focus our efforts on:

            A. Career and Technical Education awareness,

            B. Innovative Education partnerships to increase pipeline
            quality,

            C. Aligning academic learning with on-the-job relevance, and

            D. Government and industrial partnerships.

        BASF's award-winning science education programs and funding for
    schools across the region stimulate learning in science, technology,
    engineering and math (STEM) and support workforce development. Since
    2010, more than 410,000 schoolchildren in pre-K through Grade 12 have
    participated in a variety of our science education programs including:
    Kids' Lab, Teens' Lab, Science Academy and national sponsorship of the
    Chemical Education Foundation's You Be the Chemist programs.
                 IV.  Manufacturing Jobs Can Take You Anywhere
        Some say jobs in manufacturing are dead-end jobs, but I am here
    today to testify that manufacturing jobs do not have a ceiling--they
    provide options. Some of us prefer the exciting hands-on aspects of
    technology roles, and some seek administrative work. Manufacturing
    provides opportunities for both, today.

              Ms. Jana Truett

                      Was a cashier in a pharmacy when she decided
                    to get her associate degree in process technology. She
                    began work with BASF as an operator and now trains
                    others in technology.

              Ms. Jalisa King

                      Was a cook when she decided to get her
                    associate degree. She is now an operator in BASF and
                    part of our Ambassador team telling her story to other
                    young women.

              Ms. Tara McMahon

                      Worked in a recreation center. After
                    completing her associate degree, now works at BASF as a
                    Laboratory Technician.

              Glenn Johnson

                      22 years ago, I was a proud young man living
                    in a trailer park in western Kentucky with only a high
                    school diploma. At that time, I began my first job in
                    manufacturing. I ran assembly lines and stacked cases
                    of product. As I worked through the ranks, I began to
                    take advantage of the tuition reimbursement program. I
                    progressed into leadership roles while continuing to
                    train and educate with the support of my manufacturing
                    employer. That proud man from the trailer park sits
                    before Congress today to tell you that the
                    manufacturing industry changed my life and continues to
                    change people's lives in the same way, every day.
                    V.  A Strategy for Workforce Development
        Alignment between the education system and the business community
    is critical to deliver the knowledge and skills necessary for an
    individual's success. This includes direct involvement in all stages of
    workforce preparation and building continuous and meaningful
    relationships with workforce potentials and organizations. Wherever
    possible, BASF seeks out and promotes these collaborations, from K-12
    through graduate school.
        In my experience, well-designed apprenticeship programs typically
    have requirements that align with three directives. BASF's Workforce
    Development programs are driven by these three directives:

              Quantity--Drive Career & Technical Education
            Awareness

              Quality--Cultivate Nested Educational Partnerships

              Synergy--Leverage Government and Industrial
            Partnerships
                         A.  Quantity of the Workforce
        An important function of any apprenticeship program is that it
    increases worker supply within occupations that have a projected
    shortage. One of the ways to do this is through outreach to
    underrepresented populations, veterans, and ``retooling adults.'' An
    apprenticeship program is one of the best mechanisms to achieve this.
        The progressive pay aspect of apprenticeship provides the immediate
    income necessary for veterans exiting the military and other
    established workers looking to change careers. These ``retooling
    adults'' cannot simply stop receiving a paycheck while they learn new
    skills. They often have established families they must support while
    making career changes toward jobs America desperately needs filled.
        Organizations can create apprenticeships administered by employee
    resource groups for underrepresented populations like females in
    manufacturing. For example, a BASF initiative titled Female Leaders
    Advancing Manufacturing Excellence (FLAME), awards females with
    education scholarships for use within local community and technical
    colleges and provides job experience through multiple internships for
    the awardees. Additionally, the program enables women's advancement by
    connecting them to a growing vital network of mentors and colleagues.
                          B.  Quality of the Workforce
        An important outcome of any apprenticeship is alignment between the
    curriculum delivered and the knowledge, skills, and abilities
    organizations require.

              As a member of the North American Process Technology
            Alliance, BASF joins 49 colleges, 22 industrial organizations,
            and 19 vendors across America where we focus on curriculum and
            instructor skills for the Process Technology Associate degree.
            This organization demonstrates the return on investment
            achievable within collaborative efforts.

                      Dr. Robert Bartsch and I published a research
                    paper in The Journal of Technology, Management, and
                    Applied Engineering titled ``Comparing Process
                    Technology Education and Work Experience'' that
                    demonstrates strong statistical evidence pointing
                    toward collaborative value.

                      Within this degree we found that 1 year of
                    training is approximately equal to 5.3 years of work
                    experience. This is not to suggest that 1 year of
                    education in general is equal to 5 years of experience.
                    However, when industry and education partner to align
                    curriculum with collective needs and assure that
                    learning environments are close simulations of the job
                    with applied performance criteria, Education/Training
                    IS Experience.
                           C.  Collaborative Synergy
        An important aspect of any apprenticeship model is collaborative
    synergy between education, industry and government organizations that
    improves the quantity and quality of the workforce pipeline. To achieve
    this, foundational efforts within apprenticeship programs must include
    the creation of collaborative partnerships. In BASF, we seek these
    partnerships in every opportunity. It is in BASF's best interest to
    help assure that our industry partners have a sufficient supply of
    qualified workers. At BASF, we want to do more than develop only the
    part of the workforce that we hire. We want to help and support our
    industry partners acquire talent and help all future workers increase
    their employability for all our industry partners, not just BASF.
                        VI.  Apprenticeship Exploration
        BASF feels that apprenticeships, when designed appropriately, can
    be a valuable tool in workforce development. We took time to study
    existing efforts before deciding how to move forward. We conducted a
    comprehensive examination of the different models of apprenticeships
    and gathered feedback from other organizations and colleagues about the
    models. We classified our findings into three different apprenticeship
    categories and later created a fourth.

              German Apprenticeships

                      Educational path for children is identified
                    by academic achievement in the 4th grade. These paths
                    are flexible but highly suggestive.

                      Those on the apprenticeship path (beginning
                    in the 5th grade) complete dual enrollment with high
                    school and vocational training programs, but end
                    secondary education by the 10th grade.

                      This model does not fit culturally within the
                    U.S.

                              Parents in the U.S. may consider
                            students in these types of apprenticeships to
                            be high school dropouts.

                              Parents in the U.S. will likely have
                            strong opposition to the seeming removal of
                            choice by a 4th grade test.

              Traditional American Apprenticeships

                      Progressive (Skills Based) Pay with increases
                    as skills are acquired.

                      Provides mentor based on-the-job training and
                    experience.

                      Traditionally did not have partnerships with
                    college programs.

              Modern American Apprenticeships

                      Career and Tech Ed Awareness programs inform
                    students of career choices.

                      Progressive (Skills Based) Pay with increases
                    as skills are acquired.

                      Provides mentor based on-the-job training and
                    experience.

                      Establish partnerships with Community and
                    Technical college programs.
                        VII.  Registered Apprenticeships
        The current ``registered apprenticeship'' model has a perception
    within industry as being complicated and heavily burdensome with
    paperwork and reporting. This has affected the quantity of actively
    registered apprenticeships in the U.S. Some organizations that need
    apprenticeships may not seek registration and thus are not eligible for
    funding assistance because they perceive an insufficient return on
    investment for what they must do to receive it.
        For example, in 2015, BASF planned to train 105 individuals from
    Texas and Michigan to be Process Operators and Maintenance Technicians
    through the American Apprenticeship Grant Program. We created a
    complete two- to three-year registered apprenticeship program as part
    of a joint effort between BASF and several industry partners--all of
    which planned to train and hire their own counts of registered
    apprentices. However, because one document was not completed properly,
    the program, which had involved much work to develop, was declined and
    the training was canceled. Since this time, some of the partners have
    endeavored to conduct the training on their own but with significantly
    decreased numbers of participants.
        Headcount restriction causes hedging of apprenticeship
    participation by site leaders. Registered apprenticeships are aligned
    with job availability because they are designed to result in a hire. On
    the surface this sounds great, but it also decreases interest of some
    organizations. Site leaders are never 100 percent certain of specific
    employment needs due to turnover, production capacity expansion, or
    project completions. This uncertainty, coupled with a very set and
    inflexible headcount restriction, (a characteristic of many companies),
    leads to a hesitation to commit to projected hire counts that may be
    two to three years in the future. If a site leader is required to
    commit to hire as a part of program participation, as in registered
    apprenticeships, then they will only do so for a fraction of the count
    they may need to hire, in order to hedge against unexpected
    circumstances.
        If the purpose of apprenticeships is to develop participants within
    jobs for which there exists or will exist a critical projected
    shortage, then apprenticeship programs should encourage development of
    our full projected hiring counts, not just a part. Therefore, BASF is
    moving toward what we call Sequence Apprenticeships.
                        VIII.  Sequence Apprenticeships
        According to the Department of Labor, registered ``Performance
    Based Apprenticeship programs are premised on attainment of
    demonstrated, observable and measurable competencies,'' and identify
    the ``allocation of the approximate time to be spent in each major
    process.'' BASF's ``Sequence Apprenticeships'' should fit within this
    model.
        Our plan is to facilitate the creation of these programs by
    joining/creating advisory committees within the education program where
    the committee will agree on:

              Defined competencies that are directly related to the
            job/role through a job/task analysis and allocate which
            competencies will be achieved in the education setting and
            which will be achieved in the work-place learning setting

              Structured on-the-job learning agendas/activities for
            competencies attained within workplace learning that are
            observable applied performance based measures of competency
            attainment and that include the approximate time/hours value
            for attainment of each competency

        Our plan is to provide this training and education through a
    sequence of scholarships and internships (scholarships within the
    college program and workplace internships that provide the structured
    on-the-job training within industry site locations). The program also
    allows:

              Credit to be given for previous experience and
            competencies demonstrated

              Apprentices to accelerate the rate of competency
            achievement or take additional time beyond the approximate time
            of completion
              A.  BASF's Progress toward Sequence Apprenticeships
        BASF has started to assemble parts of the Sequence Apprenticeships
    through our workforce development strategy with execution activities in
    Louisiana, Georgia, South Carolina, Pennsylvania and Alabama.

              We identified ten nested educational partnerships in
            2017 where we provide development assistance and direct
            curriculum input.

              BASF provided direct onsite experience and job skill
            training to 49 future workers in 2017 and 30 in 2018 thus far.

              BASF hired 45 workers in 2017 and 21 in 2018 thus
            far, from development programs with which we partner and advise
            on curriculum.

              Within our FLAME program we are providing
            scholarships and internships for females.

        More work must be done to complete the program assembly. We are in
    the process of building enterprise-wide programs that are systematic
    and that are portable to other sites locations high in our priority
    such as Tennessee, North Carolina, Kentucky, Colorado, Wisconsin,
    Virginia and Minnesota.

        Our Sequence Apprenticeships model allows:

              Support of future workers within the entire degree
            program, not only the ones we hire.

              Increased quality of the education program as a
            whole--not just the apprenticeship program, resulting in higher
            relevance for the school.

              Hiring managers to maximize the number of
            apprenticeship hires because the decision to hire is made at
            the time of credentialing when the actual situation is clear,
            not forecasted.

              Organizations to help fill the pipeline for other
            industry partners, not only for themselves

        Based on our experience, the Sequence Apprenticeship model holds
    much promise. It is a model that can ``catch-on'' and encourage more
    participation by industry partners. Sequence Apprenticeships allow the
    flexibility that hiring managers need to support the maximum number of
    future workers and hire the maximum number of employees from the
    program.
     B.  A Proposal for Distributable Support for Collaborative Workforce
                                  Development
        Under this model organizations would work together as true partners
    where multiple partners can share the load to develop future workers.
    Support to each of the industry partners would be based on their share
    of workforce development efforts within a collective group of future
    workers. This would require a support program that is distributable in
    parts as follows:

              Part 1: Setup of new or restructuring of councils
            within education programs that involve the school and multiple
            industry partners from the region

              Part 2: Work to define competencies, learning agendas
            and schedules, and workplace setting requirements for
            instruction

              Part 3: Scholarships for program participants

              Part 4: Executed workplace on-the-job learning
                               IX.  Looking Ahead
        If we sit on the sidelines and take no action toward development of
    the workforce need to fill the jobs gap, the ``Skills Gap'' will become
    critical within manufacturing in approximately 4 years. Unless
    something is done to change the status quo, the lack of workers will
    ignite a wage war between industry partners that will result in
    inflated wages above market and business models. This wage increase
    will result in a short--term exchange of the same short supply of
    workers, and will affect the margins of all producers. Smaller,
    distressed sites will suffer first as they will not be able to match
    inflating wages and likely lose productivity, then accounts. Entities
    with demand for this productivity will be forced to look elsewhere and
    likely turn to markets outside of the United States. The manufacturing
    sector in the U.S. will decline and these U.S. jobs will be permanently
    lost.
        Evidence of this has already become visible in manufacturing sites.
    Manufacturers have experienced employee counts that have reached a
    level of site open positions where plant operations are being
    negatively impacted including reduced operating shifts, higher overtime
    cost, and lost production.
                               X.  Moving Forward
        BASF plans to advance and scale the activities mentioned today
    across North America. We are prepared to openly share the strategy and
    execution plan for workforce development with industry and government
    partners. America needs the manufacturing industry to achieve the
    growth we clearly see coming. Congress can catalyze this growth
    providing Distributable Support for Collaborative Workforce
    Development.
                                     ______

                      [summary statement of glenn johnson]
    I. Introduction

           (includes a comment about passage of the Perkins Act
    reauthorization)

    II. Overview of BASF Corporation

           A. US Employees

           B. Sustainability at BASF and how it relates to workforce
    development

    III. Filling the Skills Gap: An estimated 3.5 million manufacturing
            jobs must be filled by 2025. Nearly two million of these jobs
            will go unfilled. At BASF, we focus our efforts on:

           A. Career and Technical Education awareness,

           B. Innovative Education partnerships to increase pipeline
    quality,

           C. Aligning academic learning with on-the-job relevance, and

           D. Government and industrial partnerships.

    IV. Manufacturing Jobs Provide Career Options (includes Glenn's story)

    V. A Strategy for Workforce Development: BASF's Workforce Development
            programs are driven by these three directives:

           A. Quantity--Drive Career & Technical Education Awareness
           B. Quality--Cultivate Nested Educational Partnerships
           C. Synergy--Leverage Government and Industrial Partnerships

    VI. Apprenticeship Exploration: Apprenticeship models explained

    VII. Comments and a Story about Registered Apprenticeships

    VIII. Sequence Apprenticeships

           A. BASF's approach to apprenticeships

           B. Progress to date

           C. Next Steps: A Proposal for Distributable Support for
    Collaborative Workforce Development

    IX. Looking Ahead: Consequences of Inaction

    X. Moving Forward: BASF's Approach
                                     ______

        The Chairman. Thank you, Mr. Johnson.
        We will now begin a 5 minute round of questions.
        Senator Isakson.
        Senator Isakson. Mr. Johnson, I am the Chairman of the
    Veterans Committee in the U.S. Senate. Senator Murray has
    served in that position as well. I always go through resumes of
    the people who testify before us, and I am always happy to find
    a veteran.
        I see you are a Gulf War veteran, is that correct?
        Mr. Johnson. That is correct.
        Senator Isakson. What branch of the service were you in?
        Mr. Johnson. Army.
        Senator Isakson. Army.
        Did you do any workforce development in the Army?
        Mr. Johnson. The major amount of time that I was in the
    military, I was assigned to a training brigade in Fort Knox,
    where we developed people in their jobs and in their skills.
        Senator Isakson. The reason I ask that question, did that
    start you on what has been a career of workforce development?
        Mr. Johnson. At the time, I was not aware of it. But yes.
    It seems as though every employer I had--and that was straight
    out of high school--every employer I had within a short period
    of time said, ``We want you to train.'' At some point I said,
    ``Well, I guess I better make this a career.''
        Senator Isakson. The reason I ask that is if all of us had
    the control that the United States Army has over their
    soldiers, we could get everybody trained pretty fast because
    you cannot say no, and you take orders or you get in trouble.
    That is a good thing to learn.
        But I noticed you are a published author on five books on
    workforce development. You have done a lot of workforce
    development for companies.
        Are most of the companies that you have done workforce
    development for the employees or those companies that are doing
    the workforce development?
        Mr. Johnson. I am sorry. Say that question?
        Senator Isakson. Are most of the workforce development
    programs, are they companies that use employees or companies
    that use independent contractors?
        Mr. Johnson. There is a blend. Most of the experience has
    been with employees, but we are very recently looking to try to
    create a path that begins with our nested contractors.
        In our sites, we have what we call nested contractors.
    These are contract organizations that have employees there and
    they are there so consistently that oftentimes, our employees
    do not know they are contractors because they are there all the
    time.
        We are now trying to create a stream that builds off of,
    what one of my colleagues mentioned earlier, what starts with
    our contractor organizations and blends over into employees for
    BASF.
        But it is a strategy that we work together to help then get
    employees in the beginning stages, develop them, and move them
    through the entire pipeline.
        Senator Isakson. Well, you are getting me exactly where I
    need to go with Mr. Holland.
        Mr. Holland, I presume from your business and what you do--
    and being somewhat familiar with your company in Atlanta,
    Georgia--you use a lot of independent contractors, or do you
    not?
        Mr. Holland. Again, it depends on the segment of the
    industry. Residentially, multifamily, it is entirely
    independent contractors. I think when Mr. Johnson and I talk
    about it, it is different.
        When I say ``independent,'' I mean when the craft worker
    themselves is classified as an independent contractor. We see
    that as really disturbing and creeping into more and more of
    the unlicensed trades. In my mind, it is the opposite of a
    career path discussion.
        Senator Isakson. Well, you are taking me exactly where I
    want to go because unlicensed trades are what I want to talk
    about a little bit.
        Are not most of the people that you use in your
    construction jobs licensed by the states for what they do?
        Mr. Holland. There is a wide variety of licensing
    requirements in the states. Texas, for example, requires the
    HVAC trades to be licensed. A few others are. So it is quite a
    range of requirements.
        Senator Isakson. But plumbing, and electricians, and things
    like that are not.
        Mr. Holland. My understanding is they are pretty broadly
    licensed and held to a higher standard.
        Senator Isakson. My experience in Georgia, we had 37
    different licenses in the state, and most of them were
    everything from barbers, to electricians, to sheetrock, and all
    that type of thing.
        When you have independent contractors, the control over
    what a person learns is basically what they need to do to get
    the license to do the trade. After that, who they work for
    depends on the enthusiasm of that employer or the person who
    hires the independent contractor to get them to move forward in
    terms of their training. But that is the way you build it one
    way or another.
        I think, Mr. Chairman, one thing we need to focus as we go
    through this is what we can do through our states, and through
    some of the programs we have developed in workforce
    development, and things like that. See to it that the states
    are bringing about more focus on apprenticeship as a
    qualification for licensure or as a way to qualify for
    licensure in a state. Sometimes that is where you breakthrough
    to get those things included. I think that is very important to
    do.
        The last thing I want to say about apprenticeship, I hate
    to pick out one company, but in Georgia we have a company
    called Southwire, which is a major producer of cable in the
    world. They developed a program called 12 For Life. They bring
    in children who are off the streets, dropped out of school, do
    not have a home; they are all homeless.
        They give them training through an apprenticeship program,
    qualify for a G.E.D., which is a substitute high school degree,
    and then give them a job if they successfully finish the
    program.
        I hope as we go through this focus on apprenticeships, it
    is being done more and more in a lot of different businesses,
    we will create more opportunities. To not only being an
    apprenticeship to learn your trade, but also that would be a
    gateway for you to get a home, insurance, structure in your
    life, and a way to become a permanent employee for somebody,
    and really make a contribution in the community.
        I appreciate all of you being here, appreciate what you all
    do.
        Thank you very much, Mr. Chairman, for the time.
        The Chairman. Thank you, Senator Isakson.
        Senator Murray.
        Senator Murray. Thank you very much, Mr. Chairman.
        I want to ask unanimous consent to enter a letter from the
    National Electrical Contractors Association into the record.
        The Chairman. So ordered.
        Senator Murray. Thank you.
        Thank you all for your testimony today. Ms. Vito, let me
    start with you.
        Across the country, there are men and women willing to work
    hard to make it into the middle class, but they need
    opportunities. They need opportunities for additional
    education, job training, skills development.
        At the same time, we have a lot of employers who are really
    struggling to find workers with the skills and competencies
    they need. We know that Registered Apprenticeships can really
    help bridge that divide.
        I am frustrated that the Administration seems unwilling to
    focus on the success of the Registered program. Instead,
    claiming that it is some how, quote, ``burdensome and
    onerous.''
        Now, the health care sector is not known for traditionally
    using the Registered Apprenticeship model.
        Share with us, why did the employers you work with choose
    to participate in a Registered Apprenticeship program?
        Ms. Vito. The employers in health care chose specifically
    because they recognized what we call ``the school to practice
    gap.''
        There is a gap between what you can learn in the classroom.
    And so, through structured, on the job instruction with the
    advantage of a mentor, you gain new skills that you cannot
    learn in the classroom.
        Second, they recognized that even as you are learning, you
    are delivering services. And so, they were willing to pay the
    wage progression.
        Through a series of conversations, they also understood
    that the process of registration ensured that the competencies
    were documented and that multiple employers recognized that
    credential.
        Senator Murray. Did any of them express concerns with the
    burdens associated with that process?
        Ms. Vito. I do think the role of the intermediary, our
    industry partnership, is very useful in helping employers
    navigate the registration process.
        But they did not express a burden. What they understood,
    and actually valued, was the process of working together with
    workers from the occupation itself and the employers to
    document those competencies in order to apply for the
    registration.
        Senator Murray. Now, labor unions are often talked about
    being impediments to expanding industry-focused training
    programs. Yet, these same unions have actually created and
    expanded the Registered Apprenticeship program as we know it
    today.
        Labor unions also continue to make major investments, we
    know, into workforce training and apprenticeships. And as I
    mentioned in my opening statement, building trades, for
    example, invest over $1 billion a year in apprenticeships and
    journey level training.
        Instead of attempting to bypass this system, I think we
    should be complimenting the unions' investments and leveraging
    their experience in creating high quality programs.
        I wanted to ask you, as the Executive Director of a very
    large labor management workforce intermediary, can you tell us
    about the important role that you see unions play in creating
    high quality workforce programs?
        Ms. Vito. I think they play a very important role. The
    first is working through the worker protections.
        As I have said, sort of repeatedly, the workers provide a
    service--in some cases, community health, like working with
    clients is one example--provide a service and the unions help
    ensure that the workers are adequately paid for that service.
    So they are working and learning at the same time.
        Senator Murray. Not being misused.
        Ms. Vito. Then there are not abuses in the system.
        The second part that unions provide, which I think is not
    as well understood, is by bringing in the worker voice, the
    people who are doing it. The managers do not do carpentry.
    Managers do not do community health work or medical coding. It
    is the workers themselves.
        In our industry, the union and workers are committed to the
    quality of care. They bring that collaboration with the
    employer to understand, ``What do you need to do this job
    well?'' Define those competencies, provide the mentors, and
    provide the worker voice that is so valuable as the on the job
    learning takes place.
        Senator Murray. Now, in your written testimony, you cited
    concerns with expanding the apprenticeship model in a way that
    would create duplicative programming, lower quality, less
    rigorous standards than the Registered Apprenticeship program.
        You said a lower quality system would not adequately train
    participants, provide for worker protections, or provide
    credentials employers and apprentices can trust.
        Knowing that Registered Apprenticeships are the gold
    standard today of training for workers and employers, what
    would be some of the consequences of diluting the Registered
    Apprenticeship system and training model?
        Ms. Vito. The consequences would be that the employers and
    workers would not know what they were getting. Work-based
    learning strategies are valuable, but Registered
    Apprenticeship, we know what we are getting.
        We know also most employers are very honorable, but there
    are some employers that do abuse systems like this. And so, an
    unpaid apprenticeship where people are actually delivering a
    service is not a direction we want to go in.
        We want to have the balance between quality and protection
    for workers. I think calling a Registered Apprenticeship
    something that it is not will dilute that confidence that
    people have in the system.
        Senator Murray. Thank you very much.
        Thank you, Mr. Chairman.
        The Chairman. Thank you, Senator Murray.
        Senator Cassidy.
        Senator Cassidy. Thank you, Mr. Chairman.
        Mr. King, I enjoyed your models. Good testimony. Even I
    could follow the LEGO.
        Senator Murray just posed a question of Ms. Vito along the
    lines of Registered Apprenticeships are the gold standard for
    quality. But you suggested that they are static, constrictive,
    and actually do a disservice to the apprentice. I am just
    following up.
        Are Registered Apprenticeships the gold standard or do you
    feel not?
        Mr. King. I think apprenticeship in its basic form is the
    gold standard, but whether it is registered or not registered
    that all depends on innovation and the individual designs of
    the companies.
        Apprenticeship in its basic form, yes. But to say
    registered is the gold standard, I am not so certain of that.
        I went through the Registered Apprenticeship system, and it
    worked for me. It took me out of an extremely poor neighborhood
    and it moved me into the middle class. So I have all the love
    for it. But it has not changed with the innovation that we see
    today.
        Senator Cassidy. Now, Ms. Vito, you suggested it has not
    changed. I am from health care and I will say, I technically
    still teach medical residents, and some are in an
    apprenticeship program. There is a certain dynamism.
        If there is a new procedure that comes along, I will take
    the young resident and show he or she the new procedure. But I
    can also accept that there are some things that have been set
    in a way and do not change.
        Is that not true? Is Mr. King's analogy of the LEGO's in
    place and unable to be moved not sometimes true of a Registered
    Apprenticeship? Knowing that health care might be different
    because I do think there is a certain dynamism that is
    reflected as we teach health care.
        Ms. Vito. I think the dynamism of health care is reflected
    in the registration process, and I also think it is very
    important to recognize the strides that have been made to
    improve the administration of the Registered Apprenticeships.
    It is one of the reasons that we were able to register them in
    health care.
        First, the U.S. Department of Labor has added a competency
    based model. That is the mechanism under which most of our
    health care apprenticeships are registered.
        Second, the technical assistance that has been offered
    through the Department of Labor has enriched the process, so
    that the dynamism and the quality are incorporated into the
    registration process.
        We have not found it rigid, but rather have found real
    value.
        Senator Cassidy. Outside of health care, though, let me
    just go to Mr. Johnson, outside of health care, is there
    rigidity within, as Mr. King suggests, within the Registered
    Apprenticeship program?
        Mr. Johnson. I think it stems from a perception of the
    burdensome aspect of apprenticeships. I am not saying that the
    different models that are out there and that are available
    through the D.O.L. I love the performance based model that the
    D.O.L. has come out with. But there is a general perception, at
    least by a large amount of the business organizations, that it
    is burdensome.
        Now, whether it is or it is not, that is the perception,
    and perception is reality in the eye of the beholder until you
    change that. So it is something you have to overcome in a
    narrative one way or the other.
        Senator Cassidy. In your written testimony, you seem to
    suggest it is more than a perception. It is a reality that the
    burdensome nature of it, or maybe it was Mr. Holland, that if
    one piece of paper was not completed all this application went
    for naught, et cetera.
        Mr. Johnson. Right.
        Senator Cassidy. There is a bureaucratic aspect which works
    against the employer.
        Mr. Johnson. There absolutely is and that affected a number
    of employers, not just BASF, and hundreds of potential trainers
    that literally got stopped by one piece of paper.
        Senator Cassidy. Let me compliment you, because I am aware
    that BASF in my State of Louisiana is a pathway, as Mr. King
    suggested, to the middle class for many folks.
        Mr. King, does the IRAP process that you are working on,
    does that address this bureaucratic, cumbersome, one piece of
    paper was not filled out, all this effort is wasted, that Mr.
    Johnson speaks of?
        Mr. King. It is still in the works, but yes, I believe that
    we are on a pathway to mitigate against those types of
    restrictions.
        Senator Cassidy. Mr. Johnson, one more thing. You spoke in
    your testimony about Germany and how they integrate the thing.
        Now, I will say that I have been to high schools in
    Louisiana in which, in the senior year, a young person can take
    E.M.T. courses and graduate as a certified E.M.T.
        In their high school, they can take welding, sponsored by
    A.B.C., by the way, that bought the equipment and they are
    taking welding classes and they graduate. Perhaps not as a
    master welder, but as a welder who can then use that as a
    platform to put the LEGO's on to go to more training. So it
    does seem that there is a way to integrate that.
        How can we do more of that?
        Mr. Johnson. I think we already are. Whenever BASF,
    whenever we dug deeply into the different types of models that
    are out there, we separated into two different types of
    American apprenticeships.
        What we refer to as the traditional American apprenticeship
    that did not always, or at least not very often, use community
    colleges as a foundation for skill building.
        The new American apprenticeships, what I call ``modern,''
    utilizes that and does all of the things in the performance
    based apprenticeship model that the D.O.L. has come out with.
        I do not want to say, I do not want to let my testimony
    only say that it was a hard enough hit against Registered
    Apprenticeships. We are not pursuing it. We absolutely are. We
    want them to be because we want those national credentials. We
    want that value to come along with the programs that we
    develop.
        But we are going to design what the workforce needs, what
    the students need, what the future workers need, what the
    industries need. Then we are going to take that, which is our
    next step, literally within the next week or so, we are taking
    that model to the D.O.L. and saying, ``This is what we know to
    be the answer. Our industry partners have come together and
    decided what the competencies are.''
        Senator Cassidy. Thank you very much. I am way over.
        Thank you for your indulgence.
        Senator Murray [presiding]. Thank you, Senator Cassidy.
        The Chairman had to step out to another committee hearing
    for just a few minutes. He will return.
        Senator Bennet.
        Senator Bennet. Thank you, Madam Chairman.
        I want to thank all of you for your testimony, and for your
    work, and what you are doing. I really believe that this
    project to mainstream apprenticeships in America is critical if
    we are going to begin to lift wages again in this country.
        If we are going to fill the gaps, as a former school
    superintendent, fill the gaps between what children are
    learning in high school and what they need to be able to do to
    actually perform well in their job and earn a wage that is not
    this, but it is this; that is the great promise of what you
    represent. I just am very grateful that you are working on it,
    even if you have different points of view and perspectives
    about it.
        Ms. Vito, I wanted to ask you, if you could share a little
    bit in more detail with the Committee what the role of an
    intermediary is? How it can help with these apprenticeship
    programs, help find people, support people in the process of
    becoming an apprentice.
        Ms. Vito. Intermediaries bring people together, employers
    and worker representatives, in the first instance, to
    understand the industry need. The role of an apprenticeship, it
    was a very rich and rigorous process where we went through what
    the occupation did, essentially, and documented the
    competencies.
        Senator Bennet. Was the occupation within health care?
        Ms. Vito. Seventeen occupations, so the one that I
    facilitated myself was our first one, was community health
    worker.
        We brought people who were moving into using community
    health workers and community health workers from the field
    together to go through the process. What did you need to do and
    learn in order to be able to do that job adequately?
        The role of that intermediary and helping write the actual
    application, I think, is a very important one, and precisely
    what some of the U.S. Department of Labor contracts to support
    the expansion support.
        It is important to make sure that you are weighing the
    quality, documenting the assessments, as well as the wage
    progression, and bringing people together. Also make sure that
    the competencies align to national industry standards.
        Senator Bennet. Can you tell us what you mean by ``wage
    progression''? What does that look like?
        Ms. Vito. Built-in to an apprenticeship is the structure
    that you learn in the classroom. You learn by hands-on. And
    then you do, which means that you are actually performing work.
        As you do more work and gain more skills, and you do more
    work independently, you get an increase in wages. You start at
    Wage X and by the end of the apprenticeship, you have a higher
    wage.
        That is a very important structure because it ensures that
    you are being paid adequately for what you are doing, but also
    brings people at the end of the apprenticeship into the middle
    class.
        Senator Bennet. To me, that is the whole game here. That is
    how we should evaluate every cent of Federal money that we
    spend is whether it is helping people move from being paid a
    starvation wage or being paid a wage that can actually support
    their family.
        Mr. Johnson, and I will get back to you, Ms. Vito.
        Mr. Johnson. Yes, the skills-based pay aspect of that is
    essential if you are going to target retooling adults as I
    refer to Veterans leaving the military or adults that have been
    in a career for a while and it is just not working out the way
    that they expected it to.
        Usually retooling adults have established families. They
    have established lives that they cannot just stop to go to
    school and not have an income.
        Apprenticeships allow for that skills-based progressive pay
    so that as you learn, you earn more money. It is a perfect
    connection between those that want to retool and industry that
    needs to pay at a progressive level as they learn skills.
        Senator Bennet. Ms. Vito, did you have a closing thought?
        Ms. Vito. In my testimony, I shared the story of Destina,
    who became a community health worker through apprenticeship.
    Before the apprenticeship, she grew up very poor. She was
    working in sporadic employment, but she ended at a $42,000 a
    year job. She now has nine credits and she is headed off to
    social work school.
        Apprenticeship should support that movement into the middle
    class, and a gateway to lifelong learning, and even higher
    wages.
        Senator Bennet. I thank the panel for your testimony.
        Thank you, Madam Chairman.
        Senator Murray. Thank you, Senator Bennet.
        Senator Scott.
        Senator Scott. Thank you very much.
        Good morning to the panel. Thank you all for taking the
    time and making the investment to be here.
        One of the challenges that we have with one of the largest
    economic expansions since 1854, I think we are in the third
    longest expansion, which is good news. I think we have finally
    gotten our regulatory environment at a responsible level, which
    I think is really good news.
        When you combine a very strong economy, an appropriate
    level of regulations, the one pillar--there are three of them--
    on making sure that our economic expansion continues is the
    readiness of our workforce.
        The necessity of understanding and appreciating ways to
    recalibrate the workforce for the future is an important
    ingredient to sustaining the long term success that we have had
    recently.
        In South Carolina, we have been able to come out with a
    program, Apprenticeship Carolina, that has focused a lot of
    time and energy on making sure that the workforce needs are
    met. We have done that through tax credits and in a way to
    provide employers with the incentive to take sometimes a second
    look at the workforce that needs to be trained and developed so
    that they are ready for the future workforce.
        We have seen that folks who have participated in the
    program have about a 97 percent approval. So it is well
    received.
        My question is how can tax credits help to spur
    apprenticeship expansion, particularly among small businesses?
        The good news is that in a bipartisan fashion, rather as
    Senator Cory Booker and myself working on the LEAP program,
    which is designed around the South Carolina model of a $1,500
    tax credit based on age versus $1,000 tax credit based on a
    younger age.
        Can you all talk about the importance of using tax credits
    as a way to spur apprenticeship expansion?
        Mr. King. I think tax credits are definitely a way of
    expanding, but I also come across some of my customers that I
    work with in developing apprenticeship programs that if you can
    show enough innovation to save or to be more productive, that
    sometimes exceeds that credits that are coming out. But credits
    are good. I mean, it is always attractive to offer the credits.
        But I will give you an example with Raytheon's Missile
    Systems Division where we looked at apprenticeship from an
    unbiased approach. We just said, ``What will work for the
    company?''
        When we came up with a design, we looked to see if we could
    fit it within a registered model, and it did not. It worked
    better taking it outside. The innovation and the ROI on the
    return was greater than any of the funding that would come back
    if we were registered.
        I do agree that tax credits work, but the innovation can
    actually spur more growth.
        Senator Scott. One arrow in the quiver is not necessarily a
    panacea. Thank you.
        Thoughts?
        Mr. Holland. I think tax credits largely are a strong
    message of support, but as was said previously, I think at the
    end of the day, if we could do something to reduce any barriers
    to quality training, be that existing regulation, then more
    people would flock.
        Employers should be highly motivated to train the
    workforce. We cannot have the shortage we are talking about and
    not have motivated employers.
        I think there are already some barriers built in place that
    would be cost effective to remove and make it easier for them
    to access the solution as, I believe, everyone has talked about
    here.
        At the end of the day, we are talking about the outcome. I
    think training is way past cost-neutral.
        We try to be careful that people do not train because they
    are going to get a tax credit when, in fact, they should have
    their own self-interest in mind to do so.
        Ms. Vito. Our industry, the employers that we work with are
    largely nonprofit, so again, an arrow in a quiver.
        But one thing that has been considered is a tax credit for
    the mentors, or the folks who are the journey people, providing
    the on-the-job instruction. So it would accrue to the people
    who are taking time out of their lives to mentor people on the
    job rather than to a nonprofit company.
        Senator Scott. Thank you.
        Mr. Johnson. The quick answer is I absolutely think that
    they can be beneficial to help catalyze an additional movement.
        But I think the most important thing that I can say today--
    of all the things that I have said--is that it is not enough to
    fund good education programs. We must eliminate the bad ones so
    that we do not communicate to students about the wrong careers.
        If we fund all of the right programs and all of the right
    apprenticeships that are available, but we also fund degree
    programs that have no job availability projection; whenever
    students are making decisions about careers, they see Pell
    Grants and other types of funding that is also available to
    them to send them into directions that they are going to wind
    up with a degree, but they cannot get a job.
        It is just as important as funding good programs, we need
    to be certain that educational dollars are based on job
    availability projections.
        Senator Scott. Thank you.
        Senator Murray. Thank you.
        Senator Smith.
        Senator Smith. Thank you, Senator Murray.
        Thank you so much to all of our panelists here. I know that
    everyone on this Committee is very interested in
    apprenticeships and how we can use them.
        In Minnesota, for sure, our biggest limit to economic
    growth is the gap that we have for people to fill the jobs that
    are there. This is an opportunity gap, not only for the
    businesses, but also, of course, for the workers who do not
    have the opportunity to get the training that they need to fill
    those jobs that are there. So that is why I am so interested in
    this conversation.
        When I first joined the Senate just a few months ago, I
    held a whole series of listening sessions around the state to
    talk about this issue of how we fill this opportunity gap.
        Based on that, I have introduced legislation which is
    focused on how to help get students into the kind of training
    that they need, and especially how to prioritize partnerships
    with schools and Registered Apprenticeship programs. Make that
    linkage work better between schools, sometimes high schools and
    Registered Apprenticeship programs. The whole goal is to make
    sure that there is the kind of customized training that works
    for students and for businesses.
        Ms. Vito, could you talk a little bit about that? Can you
    share your experience in how employers can use Registered
    Apprenticeships in that way, especially around more customized
    training?
        Ms. Vito. Because of the quality of the instruction more
    and more, some of the on the job learning can be attributed to
    prior learning and then attributed to credit.
        Also, there is a component of--again because of the quality
    of the apprenticeship--there is a component of the classroom
    instruction in our apprenticeships that are almost always
    credited. In community health work, Destina, the person I
    talked about, got nine credits to transfer. Our medical coding
    apprenticeship, you graduate or you end the apprenticeship with
    an Associate's Degree.
        It is, again, because you are able to document those
    competencies and the quality of the apprenticeship, it is easy
    to partner and have that count toward college credit if you
    find the right community college to work with.
        Senator Smith. That kind of contributes to the portability
    of the credential, not only on the academic side, but also on
    the professional side.
        Ms. Vito. That is right, because in addition to having a
    portable, high quality credential in that occupation, you can
    then transfer those credits to become something else.
        In Destina's case, it is a social worker. Medical coders
    can go into higher tech data analytics in health care, which
    sometimes require a bachelor's degree.
        Senator Smith. Right.
        Ms. Vito. Transfer 60 credits into that occupation.
        Senator Smith. It also seems like this can address one of
    the other Catch-22's that I hear a lot, which is people being
    frustrated that they cannot get a job because they do not have
    the experience. But they also do not have the experience,
    because they cannot get a job.
        It is hard to figure out how to break into that in all
    sorts of fields: in construction, technology, health care, the
    whole gamut.
        Ms. Vito. In the testimony, the written testimony, I talked
    very specifically about that in medical coding. Our employers
    were essentially raiding each other's experienced medical
    coders and not creating new medical coders.
        Senator Smith. It becomes kind of a zero sum.
        Ms. Vito. We had so many people graduating from medical
    coder programs who could not get jobs even though there was
    this shortage. Filling that gap, what we call the school-to-
    practice gap is precisely what apprenticeships, particularly
    Registered Apprenticeships do.
        Senator Smith. It also seems to me, the last thing I want
    to touch on, is that in a world where we have this shortage of
    skilled workers in a whole range of trades, building trades,
    science and technology.
        We also have the challenge that a lot of women, especially
    young women in high school do not see that; they just do not
    even visualize that as a career. Maybe they do not have
    robotics in their high school because their high school does
    not offer that. They just do not have the opportunity to
    experience that in high school.
        I have heard so many young women who have told me that just
    getting exposed to those opportunities made a big difference to
    them.
        Could you just talk a little bit about how Registered
    Apprenticeships address that issue for women?
        Ms. Vito. Yes, if I can just make two points about that.
        As we expand apprenticeships into more industries, we are
    increasing the diversity. Eighty-eight percent of our
    apprentices are women.
        I think the second point that I would make, though, is if
    we are moving apprenticeship into other industries that are
    women and people of color dominated, we have to protect the
    quality. We do not want to let a lesser system for women and
    people of color.
        Senator Smith. Thank you very much.
        Senator Baldwin [presiding]. Senator Kaine.
        Senator Kaine. Thank you, Senator.
        Thanks to the panelists.
        I am going to spend some time bragging about a great
    Virginia apprenticeship program, which you might expect me to
    do, and then I have a question for Mr. Johnson about something
    you said that interested me.
        In Virginia, the largest industrial employer is Huntington
    Ingalls shipyard in Newport News; about 20,000 employees.
        The centerpiece of the work that is done there is an
    apprenticeship school that celebrates its centennial next year
    in 2019. The apprentice school is a Registered Apprenticeship
    program. The acceptance rate of applications into the
    Apprenticeship program is more selective than Harvard College
    undergraduate acceptance rate. It is really the gold standard
    for apprenticeship programs in the country.
        The interesting thing is if you graduate from the basic
    apprenticeship program that is really hard to get into with
    this Harvard acceptance rate, we do not count you as a Nation
    as having a higher education degree because it is technical
    education. I mean, it is just ridiculous. We do not count you
    as having a higher education degree.
        Sixty percent of those who go to this apprenticeship
    program already have some college or a college degree when they
    go, but the basic 3-year program, we do not count you in this
    Nation the way we measure higher education as having a higher
    education degree. It is nuts.
        Students are paid to go to the school. They are paid to go
    part-time. They work part-time and eventually over the course
    of the 3-years, they work more and more.
        There is a job waiting for them upon graduation; 80 percent
    retention rate 10 years later after graduation. The average
    starting salary of a grad is $81,000.
        The apprenticeship school is stackable too. So the 3-year
    degree is sort of a basic degree, but they have advanced
    apprenticeship programs that go anywhere form five to 8 years
    and result in an associate's or a bachelor's degrees.
        The school always keeps up with technology. In fact, it is
    part of a commitment by Huntington Ingalls more broadly than
    just the apprenticeship school.
        Huntington Ingalls spends $80 million a year to train
    employees. They have about 20,000 employees, so that is just
    $4,000 per year per employee to train, and that includes the
    apprenticeship, but other programs they do.
        They retrain senior workers on new technologies. They
    rotate employees through different departments in the company
    to give them leadership opportunities. They partner with pre-K
    programs because they know that some of the shipbuilders that
    are going to be building ships are in pre-K right now.
        They have an award winning career pathways programs in the
    Hampton Roads area for children in the 6th to 12th grade. They
    do teacher internships to bring teachers in because they are
    worried about our children getting a stigma that manufacturing
    or career technical is not the same as going to college.
        They are bringing teachers in to get excited about this
    work that is sophisticated. There is nothing built on the
    planet Earth that is more sophisticated than a nuclear
    submarine or a nuclear aircraft carrier and it is a patriotic
    profession. You want to get people excited about it.
        They even do pre-hiring training programs in local
    community colleges in certain disciplines where they will train
    you in skills, and they put about 400 people through these pre-
    hiring programs, and then 94 percent of them have been hired.
        But I think it is an interesting example of a 100 year old
    Registered Apprenticeship program, but that has completely kept
    up with the times, and that has adjusted, and moved along with
    it and new technologies. And not just for new workers, but
    training existing workers.
        I am very, very proud of them and I think it is a superb
    model; excited about this centennial.
        Mr. Johnson, right at the end of your testimony, I was
    really excited. You said, ``We are designing. We have had this
    stakeholder session and we are kind of designing what
    apprenticeships might look like in the future.'' You are about
    to take that to D.O.L. It is like I wish we had the hearing 2
    weeks from now, and you would have come in and presented what
    you just presented.
        But talk a little bit about what it is that you are hearing
    and what it is that you are going to be presenting to the
    Department.
        Mr. Johnson. I had a conversation with a member from the
    D.O.L. a few weeks ago. We were in New Jersey at the Governors
    Workforce Development Roundtable.
        This idea that we have for sequence apprenticeships
    utilizing a sequence of scholarships and internships,
    ``internships'' plural, is a key part of that because then we
    get a lot more on-the-job training. It begins with a couple of
    scholarships for our first two semesters when we do an
    internship and so forth.
        The problem with that is in the very beginning of that, it
    might not be considered a hire until we get closer to the end.
    Once we get closer to the end, they become a hire, and the
    progressive, skills-based, performance-based pay that is a part
    of that role, starts to kick-in.
        My worry is--because I do not know every single model that
    is out there and the number of different pieces of policy that
    are coming out about it--can we get this thing to be
    registered? We want it to be.
        In the conversations that I had with him on the sidewalk
    after that meeting was that he feels very confident that can
    happen. And so, those meetings are coming up.
        The bottom line is that we are going to design what we
    think is valuable, not just to the organization, but to the
    students themselves. We do not want a credential that is just
    going to be valuable in BASF. That is not fair to the students
    or the retooling adults.
        We want a model that is going to solve the problem and that
    we can portably replicate across North America into our
    different sites. If we can do it in a few small sites like we
    are now, or at least starting to put in places the pieces to
    get that done, but if we want to scale this as big as we want
    across North America and include our industry partners as we
    have in our first ten pieces, then we are going to need
    support. We are going to want that to be a registered program.
        That is the whole idea is to bring that finished program to
    the D.O.L. and say, ``This is what we need. This is how many
    industry partners have agreed this is what we need. This is the
    competency modeling we have already created. This is the school
    we are working with. Here is the survey that we did to decide
    what are the critical crafts for that region.''
        We know the jobs are in need. We know the competencies. We
    know how we want to teach them. We have industry support behind
    it. How can we fit this into the model?
        Senator Kaine. If I could just, as I close, because I am
    over time, I am very excited about the way you describe it.
    Particularly, you do not want it to just be valuable to BASF.
    You want it to be more than that.
        We are going to reauthorize the Higher Education Act. We
    ought to be focused in that Act on making career and technical
    education every bit as much valued as a college degree.
        We have apprenticeships or other career opportunities that
    are more just for the employer, but they are not credentialed
    at a national level that is validated and understood, we will
    continue to have two class system.
        We have to be elevating career impact. Right, Madam
    Chairman?
        Thank you.
        Senator Baldwin. Senator Jones.
        Senator Jones. Thank you, Madam Chairman.
        Thanks to all of our panelists today for the work you are
    doing.
        Mr. King, I would like to ask you a question. I am still
    kind of new to the Senate here. One of the things that I have
    seemed to observe with the Administration--and Senator Murray
    alluded to the press conferences of the big issues with
    executive orders--it also seems to me that sometimes the way
    the Administration also refers to the past. In other words,
    anything that has been built in the past is not good, that they
    can do it and build it better in a new one.
        I am curious as to whether the taskforce even looked at
    trying to update and make changes to the Registered Apprentice
    program. The reason I say that is because I think everybody
    understands that everything like this is a work in progress. As
    we change as a society and as a workforce, there are things
    that we can do better.
        But it almost appears to me that you took your models there
    and I noticed the one that you have representing the
    apprenticeship program seems pretty solid, but it is also made
    of LEGO's. Correct? And LEGO's are made to be moved, the pieces
    moved, to change. You can build on them. You can add to them.
    You can take them away. You can do the things.
        I am curious. Did your taskforce even look or talk to the
    folks about maybe trying to update, and modernize, and cut down
    on some of the regulations that, I think, everybody is
    concerned about including me? As opposed to trying, and taking
    this, and completely a duplicative process, and a duplicative
    program, and not trying to work with the gold standard that we
    have had that has been so successful for 80 years?
        Mr. King. The conception of IRAP, I am not sure exactly
    what was done prior, but in our sessions, we did focus on what
    we could do differently.
        I will say within the registered system, as you see, it is
    LEGO's, and it should be able to change. But when you talk
    about Mr. Johnson, you are coming out with a great model that
    works, and you have to present it to D.O.L. to say, ``This
    works. Let us make it work.'' But it is like moving a mountain.
        Senator Jones. Well, it is the same Administration, though.
    If the Administration wants to do it, they can do it. We have
    seen that happen time and time again. If they want to move the
    mountain, all they have to do is get Donald Trump to sign an
    order and that mountain gets moved.
        I appreciate the answer, though. I am just concerned that
    we are taking a program and trying to do something duplicative
    that is not going to protect the workers. It is not going to
    get the expansion of the apprenticeship programs, while we
    could have taken something and done the innovative things that
    we looked at.
        But thank you very much.
        Yes, sir. Go ahead.
        Mr. Johnson. What I would say to that is that you
    absolutely want a working knowledge of the existing programs
    that are in place while you try to brainstorm for a repair or a
    fix.
        But too often organizations see a piece of policy or a
    funding mechanism and think, ``How do I design something to fit
    within that?'' and that is the wrong approach. Because you wind
    up putting pieces of your model together that are based upon
    alignment and not upon whether or not it is valuable to the
    system, valuable to the organizational groups, or valuable to
    the students that are trying to learn.
        Yes, a working knowledge of everything that is going on so
    that you are aware of that, so you know what all of these
    pieces you come up with are aligned with. But you really do
    need to start with: what do we need?
        Senator Jones. I agree.
        Mr. Johnson. Come up with that first.
        Senator Jones. Yes.
        Mr. Johnson. Now, let us see, is it aligned? If so, we are
    good. If not, let us work on getting it aligned.
        Senator Jones. Right, and I think that would have been
    perfect. With the attitude of this Administration, they could
    have done that easily.
        Ms. Vito, let me ask you real quick in the time that I have
    left. I appreciate the fact that there are so many women that
    are coming into these programs. There are still some
    disparities, I think, and we need to get more African Americans
    in there, more minorities.
        I think some of the statistics I have seen, show that there
    is also a disparity, not in just the numbers, but in also the
    wages of folks coming out of this.
        What can we do better with the Registered Apprenticeship
    program to make sure that the wages are equal? They are equal
    for women. They are equal for minorities.
        Ms. Vito. Thank you for that question, Senator.
        Let me start by saying that 61 percent of the apprentices
    in the H-CAP health care occupations are people of color.
        To go back to the point that you are asking around quality,
    if we create a lesser system or a side system, and we are
    moving into new industries at the same time without those wage
    progression protections, we are guaranteed to create any
    further wage disparities.
        I think that is one of the reasons to protect the quality
    and the rigorous registration process, which our experience is
    not an impediment, but forces the joint apprenticeship
    councils, workers, and employers together to think through the
    quality initiatives, which overcome the issues of wage
    disparity.
        Thank you for asking that question, Senator Jones.
        Senator Jones. Yes, but thank you for your answers; pretty
    much what I was looking for.
        Thank you, Mr. Chairman.
        The Chairman [presiding]. Thank you, Senator Jones.
        Senator Hassan.
        Senator Hassan. Well, thank you, Mr. Chairman.
        I want to thank you and Ranking Member Murray for holding
    this hearing.
        I also want to thank you for your work along with Senators
    Casey and Enzi to pass the reauthorization of the Career and
    Technical Education Act. This Committee continues to be an
    example of really commonsense, bipartisan leadership.
        I am happy to be here at this hearing to discuss the
    importance of apprenticeships and how we can ensure that these
    programs meet the needs of program participants and employers,
    something that, I think, you have all been unified in talking
    about today.
        To Ms. Vito, I want to start with this. One of the
    rationales that the Administration has provided to create a
    whole new apprenticeship program alongside the Registered
    Apprenticeship model is related to the challenges of the
    Registered Apprenticeship model to serve nontraditional
    apprenticeship industries like health care and manufacturing.
        In New Hampshire, using an Apprenticeship USA State
    Expansion Grant from the U.S. Department of Labor, the
    ApprenticeshipNH program has partnered with more than 20
    employers to train apprenticeships in a whole range of fields.
        In addition, many of these programs offer postsecondary
    credits that students may use to achieve a more advanced degree
    going forward ensuring that individuals are on that lifelong
    career pathway that we all want them to be able to have.
        I recently visited one of these employers in Manchester,
    New Hampshire, Granite State Manufacturing that offers a
    Registered Apprenticeship program that trains employees to
    become machinists.
        These apprentices take classes for credit at Nashua
    Community College, receiving 20 credits toward machine tool
    technology, CNC programming certificate, and/or the Associate
    of Science Degree in precision manufacturing.
        Ms. Vito, I know you have worked with more nontraditional
    fields yourself, specifically in health care, and you have
    explained already today how the Registered Apprenticeship model
    has benefits for employers and apprentices.
        Can you just take a minute, though, to talk some more about
    how you think the model of Registered Apprenticeships can
    expand to more sectors?
        Ms. Vito. Thank you, Senator, for the question.
        First, I think we have to acknowledge the changes that have
    been made that have helped expand it.
        The competency-based model was what allowed health care
    apprentices to be registered and that is a model that has been
    embraced by the U.S. Department of Labor. Rather than just
    rewarding seat time, it is the acquisition of skills and
    demonstrated proficiency.
        Second, the multi-state registration has allowed us to
    register things that scale that you might not have in one
    location.
        Then the technical assistance grants, which you just talked
    about, have actually provided the opportunity for
    intermediaries, and employers, and unions to work together to
    build the capacity.
        I want to just note that there was a piece of legislation
    called the EARNS Act in 2016, bipartisan legislation,
    introduced by Ranking Member Murray and Senator Hatch. It
    provided for:
        The official establishment of the Office of Apprenticeship;
        Competitive grants to build more capacity;
        Increasing the awareness of employers; I think it was said
    earlier, not by me, that there was misconception about how
    difficult the process is. It may be a rigorous process, but
    still one open to employers; and,
        Effective evaluation and other parts.
        The EARNS Act, again, 2 year old legislation would help to
    expand this to nontraditional industries.
        Senator Hassan. Thank you.
        I also just wanted to move to the area of health care for
    just a minute. You described in your earlier testimony the
    story of Destina Garcia, who participated in the community
    health care worker apprenticeship program in New York City. She
    is on her way to a college degree. She is earning a living
    wage.
        As you know, we are facing a workforce shortage across the
    health care sector. One of those shortages in one of those
    sectors that is very personal to me is the shortage of direct
    support professionals who provide care to our seniors and
    individuals who experience disabilities.
        In New Hampshire, we estimate that 70 to 80 percent of paid
    hands-on care for older adults and individuals who experience
    disabilities is provided by direct care workers, including
    personal care aides, home health aides, and nursing assistants.
        The demand for direct care workers is expected to increase
    49 percent between now and 2022, further exacerbating a
    workforce shortage that already exists in many communities
    across the country.
        At the beginning of this year, ApprenticeshipNH launched a
    pilot home health aide Registered Apprenticeship with senior
    helpers in Stratham, New Hampshire, in collaboration with Great
    Bay Community College. Now, there are a total of three of these
    programs.
        I realize I am running out of time, so I just wanted to
    quickly ask you to comment on how Registered Apprenticeships
    support participants like Ms. Garcia? And do you believe these
    programs are an important mechanism to address workforce
    shortages, particularly for direct support professionals and
    throughout the health care sector?
        Ms. Vito. I know we are out of time, but let me just make
    two points.
        One, home care workers are important sources of recruitment
    because they are diverse and they have a set of incredible
    skills, what we call patient centeredness that are important
    for other occupations. So they are often apprenticed in other
    occupations, which sometimes keeps them in the health industry
    longer.
        The second, in the actual home care occupation itself, one
    strategy that we have used in the Registered Apprenticeship,
    that I think you are discussing, is enhancing the skills of the
    home health aide to do more of what is needed in health care,
    like prevent avoidable hospitalizations.
        As you use apprenticeships with a mentor, on the job
    learning, you also can increase the wages of the home health
    worker in that model and help retain the workers in the
    industry.
        Senator Hassan. Thank you.
        Thank you, Mr. Chairman, for your indulgence.
        The Chairman. Thank you, Senator Hassan.
        Senator Baldwin.
        Senator Baldwin. Thank you, Mr. Chairman.
        I want to thank the witnesses and I know you have heard a
    lot of support for apprenticeships among the bipartisan Members
    of this Committee. Certainly, we have heard a lot from the
    Administration focusing on expanding apprenticeships.
        As I hear the back and forth, I hope that in an effort to
    resolve the challenges that we are seeing with the skills gap
    and creating greater opportunities for well paying jobs for our
    constituents, that we are able to resolve some of the
    challenges without abandoning or turning our back on Registered
    Apprenticeships, which many have referred to as the gold
    standard or in alternative terms. But yet, we want to recognize
    the real issues that folks on the ground have had in expanding
    opportunities or creating novel, new apprenticeships.
        I think of Wisconsin, we have a lot of small and medium
    sized businesses that would love to be doing more. We have some
    really great examples of public-private partnerships that have
    been created in sectors to make it easier for those businesses
    to offer apprenticeships.
        I have had a chance to meet with a number of them and hear
    the creative things that they are doing.
        One important element is often the intermediary. I know you
    have already gotten some questions, Ms. Vito, about how the
    intermediary helps different entities who are key to creation
    of new apprenticeships or expanding apprenticeships navigate
    the complexities.
        But I would like you to just say how do you support
    employers, in particular, smaller and medium sized employers in
    doing so?
        Ms. Vito. Intermediaries work to support employers by
    aggregating knowledge and demand. Some of the apprenticeships
    that are listed here are with small community-based health
    organizations.
        By working with multiple employers, you can aggregate
    demand. As I said before, document the competencies, register
    the apprenticeship. But I think equally important is you can
    work with two or three people at one employer and two or three
    people at another employer, thereby aggregating and creating
    industry standards.
        I also think another important role of the intermediaries
    is supporting the workers to make sure there is completion,
    which ultimately benefits the employers because they gain the
    skilled workforce.
        Senator Baldwin. I have introduced a measure called the
    PARTNERS Act, which I hope as this Committee works moving
    forward to expand apprenticeships, that we can discuss. It is
    focused specifically on these sector and industry partnerships
    to help small and medium sized businesses.
        But also the point that you just concluded with, Ms. Vito,
    of perhaps helping underrepresented groups have these
    opportunities. And so, it also looks at the possibility of pre-
    apprenticeships, and child care, and transportation issues to
    make them as successful an opportunity as possible.
        I want to submit a couple of documents for the record,
    letters, Mr. Chairman. A letter from the Wisconsin Dairy
    Grazing Apprenticeship and two letters from the Sheet Metal and
    Air Conditioning Contractors National Association, and the
    Construction Employers of America, which includes their 15,000
    signatory contractors and 1.4 million employees that I would
    like to submit this for the hearing record.
        While asking that unanimous consent, I did want to read one
    paragraph from the Wisconsin Dairy Grazing Apprenticeship
    program.
        The closing paragraph, written by Executive Director Joseph
    Tomandl, ``As a former vocational agricultural instructor, and
    current dairy farmer, it would make the most sense to refine
    any inefficiencies with Registered Apprenticeships rather than
    create a separate standard of industry recognized
    apprenticeships. On my farm, I repair and modernize rather than
    duplicate.''
        Mr. Chairman, may I submit those for the record?
        The Chairman. So ordered.
        Senator Baldwin. Thank you very much.
        The Chairman. Thank you, Senator Baldwin, and thank you for
    your courtesy in presiding for a while today while I went to
    the Appropriations hearing.
        Mr. King, Mr. Holland, Ms. Vito, and Mr. Johnson, thank you
    so much for being here today. You can tell from the large
    participation by Senators, this is a topic we think is
    important, and you have helped us as we think about oversight
    for current programs and legislation that might affect future
    programs.
        The hearing record will remain open for 10 business days.
    Members may submit additional information and questions to our
    witnesses for the record within that time, if they would like.
        The next meeting of the full Committee will be on next
    Tuesday, July 31, 2018 at 10 a.m. on, ``Reducing Health Care
    Costs.'' The subject will be, ``Decreasing Administrative
    Spending.''
        Thank you for being here today.
        The Committee will stand adjourned.
        [Whereupon, at 12:32 p.m., the hearing was adjourned.]

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