For the past 200 years, Philadelphia workers have built ships for both commercial and military use. Philly is the birthplace of the U.S. Navy and produced the nation’s first military ships after President George Washington signed the Naval Act into law in 1794. Today, a robust apprenticeship program supported by public spending is providing Philly’s workers with pathways into the proud tradition of shipbuilding.
As part of their efforts to develop a skilled workforce, Philly Shipyard created an apprenticeship program in 2004, which has since graduated over 300 workers, and which has recently been supported by a $720,000 grant from the U.S. Maritime Administration. The Philadelphia Inquirer reports that in this program, “apprentices are paid employees from the first day, with retirement benefits and time off,” and that upon completing the program, the apprentices gain journey-worker status and earn 22 college credits.
This apprenticeship model is a powerful rebuttal to the language of “skills gaps” often used by employers and policymakers. The skills gap narrative allows employers to blame workers for not being skilled or productive enough, even as those employers outsource all training and development (including the costs of postsecondary education) to the workers themselves. In contrast, the shipyard model and other apprenticeships like it recognize thatopportunity gaps exist between workers and accessible pathways into more specialized jobs. By bearing the costs of training and education, a cost that is offset by federal grants, the Shipyard is extending opportunity to a wider array of workers who may otherwise have faced financial barriers prohibiting their ability to participate in this sector.
The “skills gap” narrative allows employers to blame workers for not being skilled or productive enough, even as those employers outsource all training and development to the workers themselves.
The apprenticeship program is also a great example of the kind of workforce development championed in the Biden Administration’s economic agenda, building on the earlier work of the previous two administrations. As part of this agenda, President Joe Biden has stressed the importance of organized labor and workforce development, including increasing registered apprenticeships, as the foundation for infrastructure renewal. Biden’s American Jobs Plan calls for $48 billion invested in workforce development; among its goals is creating as many as 1 million new apprenticeships.
While the federal government is the crucial source of funding for expanding manufacturing capacity through workforce development, state and local governments will be largely responsible for choosing how to spend that money. The flexibility allowed at the regional, state and local levels should push leaders to find best practices and copy successful models. The Philly Shipyard apprenticeship is one such model that these leaders should look to in their efforts to close opportunity gaps, overcome inequities, and increase economic growth.
In implementing these workforce programs, state and local officials should explicitly seek to increase racial equity. This is especially urgent because pathways and advancement in the trades were and often still are racially structured in ways that depress Black wages. In Philly’s overall labor market (including the trades), there are staggering racial disparities for workers with or without college credentials. These disparities are so stark that the average Black worker with a college degree makes only slightly more than the average white worker without a degree, as depicted below:
The fact that racial disparities in wages are not mitigated by education provides further evidence that the skills gap narrative is insufficient explanation for the inequality. It is deeply unfair to tell Black workers that they need to take out debt to finance a college education when we are doing little to eradicate the systemic racism that means they could still make less than white workers with less education when they graduate.
Instead of offloading the cost of skills training to workers, we need more programs like the Philly Shipyard apprenticeship. The companies that benefit from skilled labor must do their part to cover the costs of the education they require for their workers.
The government must do its part, too. Public investment and spending can shrink opportunity gaps created by racism or class-based barriers, as it has in the case of the Philly Shipyard apprenticeship, and help reduce the racial wage gaps currently present in the labor market.
Public spending can also support the overall economic health of these firms, helping secure jobs for workers while stabilizing the economy. As with many manufacturing firms, Philly Shipyard has experienced economic ebbs throughout its history, but it has stayed in business largely due to federal support. The business was initially the product of a partnership between a commercial firm and city, state, and federal government, and as recently as 2011, it benefited from similar public-private partnerships to make it through economic slowdowns.
In 2018, the shipyard was forced to lay off hundreds of workers, and there was widespread concern that the firm would go under. Local and state officials advocated on behalf of the shipyard and its workers with the goal of securing federal contracts for ships that would keep the business afloat. Indeed, a dozen members of Congress signed a letter to the Department of Transportation asking that federal contracts for state-of-the-art ships be sent to the shipyard. The letter noted that the Shipyard has world-class infrastructure (in large part due to the $350 million in public and private investment) and that it has exemplary management/labor cooperation, due to the $300 million that has been invested in workforce development and benefits.
As a result of that support, today the Shipyard is once again experiencing an economic upswing. As The Philadelphia Inquirer recently reported, the Shipyard has benefited from “contracts for national security multi-mission vessels, first announced in spring 2020.” The Shipyard has doubled its workforce (from 200 to 400), and could increase that workforce to 1,400 by 2022, according to the Inquirer. To hit that mark, the Shipyard is expanding its apprenticeship program. As the program grows, leadership should take the opportunity to ensure they are pursuing racial equity by making sure, at the least, that their recruitment sources are diverse. By setting an example here, the Shipyard could help other firms address the racial wage gap in Philly’s labor market.
Many standard economic textbooks claim that public spending crowds out private investment. But the Philly Shipyard is a powerful example of why that claim does not always hold true. When public spending is tied to smart investments in people and in places, it can invite private investment and lead to increased opportunity as well as economic growth. It is time to stop talking about skills gaps and to get serious about public investment in American workers and firms.