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