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Executive Summary

America faces a fundamental domestic challenge in the 1990s: reversing the stark and growing disparity between the fates of college-bound and non-college youths in our society.

In recent years, the latter have suffered a dramatic decline in real wages and income. Further limiting their economic prospects are the disappearance of high-skill jobs in traditional industries, and the failure of our nation's education system to impart even basic skills and competencies to many. If we permit these trends to continue, the promise of upward mobility will ring hollow for the "forgotten half" of young Americans who do not finish or go beyond high school.

The United States needs to give urgent priority to expanding the career options of non-college youth. Already, the country is losing a tragically large number of young black men to crime and drugs. The drop in real wages of young high school graduates of all races is weakening the commitment of young men to the economic mainstream and to family life. And the lack of job-ready skills, together with the declining number of young workers, is limiting the nation's productivity growth and thus its ability to raise living standards.

The root of the problem is that the capabilities of the work force, especially non-college workers, are not keeping up with the rising demand for skilled labor. As a result, U.S. productivity and wage growth remain low, while the gap widens between the earnings of college and non-college workers.

Between 1973 and 1987, the ratio of wages for college graduates to wages for high school graduates rose from 1.49 to 1.81, for young men with 5-9 years of work experience. In fact, in terms of purchasing power, the earnings of high school graduates actually declined over the last 15 years.

Defining the problem in this way inevitably calls attention to the American school system and its poorly designed system for integrating non-college youth into meaningful careers. Typically, high schools have close connections with colleges but weak links with employers. After leaving high school, non-college workers usually rely on informal contacts to obtain a full-time position. Many test the labor market by moving from one employer to another before settling into a long-term job.

High school students who are not going to college see little if any relationship between what they learn in school and their future careers. Nearly 60 percent of vocational students end up in jobs that have nothing to do with the training they receive in high schools. For America's non- college youth, a large and widening gulf separates the world of school and learning from the world of skilled and rewarding work.

This reality poses particularly serious problems for disadvantaged youth. While most non-college youth see little gain from performing well in high school, they tend to stay in school anyway, if only because of social and family constraints. Disadvantaged youth, however, are more likely to fall prey to pressures from the street, including peers encouraging them to leave school altogether. And the absence of formal connections between employer and schools imposes special hardships on inner-city black youth, because they have few informal links to jobs.

In many ways, public policies have reinforced the growing tendency for academic skills to determine career success. Governments spend enormous amounts on grants and loans for low-income students to attend college. These help the most academically capable, but do nothing for the vast majority of low-income youth. Far less is spent on vocational education, which, in any event, is often divorced from labor market realities.

The natural impulse of policy makers is to develop highly targeted programs for the poor and for minority youth. Yet such a strategy can easily backfire. When programs deal only with the most disadvantaged and least educated, the participants easily become stigmatized. Many employers are unwilling to take a chance on the graduates and the youth themselves see such training programs as a weak substitute for existing jobs in the regular or underground economy. Funding is often unstable and difficult to sustain; at best, the programs provide only a marginal addition to the existing systems of education, training and career placement.

This paper makes the case for an alternative strategy -- a job apprenticeship system for non-college youth beginning in the late high school years. Such a system would embed the job market difficulties of minority youth within the broader problems faced by non-college youth.

The apprenticeship system is elaborate and widely used throughout Germany, Switzerland, and Austria. But U.S. policy makers are only now beginning to take a serious interest in this method of integrating young people into jobs and careers. Our proposal would adapt the German model to American conditions, making due allowance for differences in culture and in the kinds of social problems our society faces.

We call for a national skill-building partnership between public schools and business. It would focus on four primary goals: