Swiss Ambassador: Government Intervention in Apprenticeships Hinders Economic Development

Does government intervention in apprenticeships hinder job development in sectors that need it most?

According to Martin Dahinden, the ambassador of Switzerland to the United States, who spoke to Capitalism.com in an exclusive interview, the answer is a resounding yes.

Throughout the interview, Dahinden spoke on how free market principles are at the core of the apprenticeship program in his country. In fact, what the private sector dictates is what will appear in the many offerings of apprenticeship programs in Switzerland.

Rather than relying on the government to provide the requirements, regulators and public officials listen to the needs of companies so that the next generation workforce can have the tools and knowledge to be competitive. He also spoke highly of how apprenticeship programs, especially in the United States, could solve the skilled labor crises impacting several nations.

This interview also comes at a time when the Trump Administration is making the issue of the skilled labor shortage a national priority. Through issuing an executive order to expand the country’s apprenticeship regulatory framework, President Donald Trump has voiced his intention to rebuild the American economy through these means. Dahinden offered his two cents into how the United States government could potentially model their current system on the Swiss one.

WATCH: Kristin Tate Explains Skilled Labor Shortage

Be that as it may, both Congressional Republicans and Democrats have made the revitalization of the American workforce through apprenticeships a bipartisan issue.

Capitalism.com also had the privilege of interviewing Trump’s Secretary of Labor, Alexander Acosta, when he spoke at the 44th Annual Meeting of the American Legislative Exchange Council in Denver. Acosta spoke highly of the idea of establishing an apprenticeship model that is based on the German system. Nonetheless, both Acosta and the American public should listen to what Dahinden has to say.

Listen to the audio above for Dahinden’s responses to our questions. A transcript of the Q&A is below.

Michael McGrady (MM): Can you tell us about the Swiss apprenticeship system? What are the positive impacts of the program on both building a steel labor pool and helping businesses grow?

Martin Dahinden (MD): The most important element of the Swiss apprenticeship system is that people are learning in a company. This means in a place where cutting edge technologies and where you have also a competitive environment with other companies. So an apprentice would learn most of his skills in a company, and this would be complemented by classroom training, perhaps one day, one and a half day per week.

The impact, the positive impact is visible. It’s two points, particularly. One is that the companies find the right labor skill in Switzerland. They would only train as many people as they can also employ, as are needed in the labor market. And secondly, as a kind of a brief, the youth unemployment rate in Switzerland is very low compared to other countries that have another apprenticeship system.

MM: What elements of the Swiss system should potentially the federal and state governments adopt? Which specific American industries, in that effect, would benefit from a system like this, considering our skilled labor shortage, here, in this country?

MD: I think it’s perhaps very important to say, first, that the private sector needs to play an important role, an important role by defining the curriculum and also by defining the skill sets you need for the different trades. The role of the government is mainly two-fold.

First, it’s the government’s funds, the classroom training element of the apprenticeship, and the government also defines standards and issues, the diplomas. That is the main role. But it’s driven really more by the companies and it’s particularly also the companies who make available the workplaces for the young apprentices.

MM: Do you know of any specific industries here in the United States that could use a system like this? To me, manufacturing in general. I was just wondering if you possibly knew of any types of industries that are vital, not only to the American economy but also to the global economy, that does have a labor shortage because there are no skills, there’s no training.

MD: Several Swiss companies who faced in the past, shortage in skilled labor and started themselves, apprenticeships take for instance, [inaudible 00:03:46] in Minnesota, or Detweiler, who produces parts for the car manufacturing in North Carolina. This is more traditional types of apprenticeship in manufacturing, but we have seen also that similar thing in [inaudible 00:04:04], which is the biggest foreign insurance company in the United States, has started with an apprenticeship in insurance.

In Switzerland, there is a broad range of different trades you can learn with an apprenticeship. It’s not only manufacturing and the more traditional like hairdressers or like Baker, but you can learn, make an apprenticeship in the area of banking, insurance, as laboratory assistance, or with ICP, so it is very good. And what I also need to say is once you have started an apprenticeship, it’s open for you at the latest stage to make other forms of education, including to go to the college.

This is also the reason why it’s quite frequent that you find even top positions in Switzerland that people who have started with an apprenticeship. For instance, the CEO of UBS, one of the world’s biggest banks, he started with an apprenticeship in banking and is now heading one of the biggest banks worldwide.

MM: Do you firmly believe that an apprenticeship program can help close the skilled labor gap in the United States and possibly even abroad? I guess, what do you think about technological innovations impacting labor and automation and how apprenticeships can keep up with this creative destruction?

MD: The apprenticeship is of course, not the solution for all the trends we will face in the world of labor. But I’m sure that it’s a model, at least, one we practice in Switzerland, that through its adaptability, can play a major role. When you have strong technological development, new trades and let’s say new skill sets are needed and with an education that is very closely linked to the reality in the companies, you have probably the best tool to give an answer to those challenges.

MM: What is the importance of capitalism in this whole concept of apprenticeships? Does it add value to the marketplace? Does it promote entrepreneurship?

MD: It depends on what your understanding is of capitalism. My understanding of capitalism is that it is a free market at common and I think when you have a system where you take the signals that you get from the market and when you conflate those signals in the curriculum, in the number of apprenticeships, you are training. Then you will have, in my view, the better results than if you would do an abstract government planning developed skill sets. And I think that the market, in a certain way, is a very interesting element to discover economic development and therefore, the system as we are practicing, is very much incorporating those market mechanisms.

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POLICY BRIEF: Would a National Apprenticeship Program Close the Skilled Labor Gap?

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