New Proposal Places Employer-Based Training on Equal Footing with Traditional Higher Education

The workforce-training grant combines on-the-job experience with employer-sponsored training

NEW YORK, NY — The American education system and labor market are biased toward college graduates, but as Amazon’s recently announced retraining program reminds, many Americans are better served by employer-based training. In order to support this type of focused skill development, a new report by Manhattan Institute senior fellow Oren Cass proposes a federal workforce-training grant. By subsidizing work-based training the way we do college, this proposal has the potential to fundamentally rebalance the U.S. approach to the labor market.

The U.S. subsidizes higher education by more than $150 billion annually, but positions that provide on-the-job training combined with employer-sponsored training receive little to no public support and employers often have little incentive to create them. In order to more evenly support both college- and non-college-bound Americans, Cass argues that policymakers must recognize that employers, not universities, are often best equipped to develop workers’ skills, and redirect public resources accordingly.

To accomplish this, the workforce-training grant proposal would:

• Define a “trainee” status for any worker whose wage is below an established threshold and whose time is evenly divided between on-the-job experience and formal training.
• Allow for diverse forms of formal training, including programs operated by an employer, industry association, organized labor, or a technical school or community college.
• Provide a substantial grant to private-sector employers who create trainee positions and provide for their training, on the order of $10,000 per year per trainee.
• Fund this grant by redirecting subsidies currently provided to traditional higher education.

Click here to read the full report.