By Trey Kovacs | As extremely partisan as Congress has become nowadays, there are glimmers of hope for agreement on reforms to help boost jobs and economic opportunity. Republicans, Democrats, and the business community should be able to all get on board with ideas that promote a higher-skilled workforce.
The reasons are myriad. At no other time has the United States had so many job vacancies — six million. At the same time, there are over six million unemployed Americans seeking work. A “skills gap” may not explain this situation completely, but it shows that many potential employees do not offer what employers desire.
The matter is rather urgent. With technological advances, like self checkout, kiosks at fast food restaurants, and driverless cars on the way, today’s jobs available for low-skilled workers today may not be tomorrow’s available jobs. We must find ways to improve the skills of the workforce.
One solution that could win bipartisan support is the expansion of access to apprenticeship and skills training opportunities, a plan put forward by new Labor Secretary Alexander Acosta. “There is no reason why apprenticeships should be limited to the trades,” Acosta recently wrote in the Des Moines Register. “CEOs across the financial services, information technology and business services industries have expressed interest in expanding the apprenticeship model.”
A template for success already exists. One sector of the economy with a sterling record in creating jobs and giving low-skilled workers opportunity and the tools for future success is the franchise industry. The franchise industry consistently outpaces the rest of the economy in job creation. Franchises contribute $674 billion to the GDP and provide more than 7.6 million jobs, according to an International Franchise Association report.
And, to its credit, the franchise industry seems eager to partner with the new administration on increasing apprenticeship opportunities outside of traditional trade industries. “Franchise businesses have apprenticeship and workforce development programs in place and continue to work hard to address an emerging shortage of skilled workers,” said the CEO of IFA, Robert Cresenti. “We stand ready to work with the Trump administration and Congress and create a pathway for Americans to have robust and successful careers.”
Many franchise companies already offer employee training opportunities. For example, Jiffy Lube has its service center employees complete training at Jiffy Lube University, an award-winning program that even counts for college credit and is an Automotive Service Excellence accredited training provider.
Another franchise company, Aamco, offers training courses through Aamco University. Courses include an “opportunity to work with our expert instructors in over 300 courses ranging from basic shop safety to master level diagnostics and transmission rebuilding.”
Many other franchise companies offer accredited training and apprenticeship opportunities that allow employees to gain skills, receive promotions or become future franchise owners.
Unfortunately, there is a looming threat to franchise businesses and all the apprenticeships and job training opportunities they offer. And that threat is the government itself.
A 2015 decision by the National Labor Relations Board, the federal agency in charge of governing private-sector labor relations, may force franchisors to reconsider extending training and apprenticeship programs to franchisees and their employees. In a case against waste management company Browning-Ferris, the NLRB decided to expand the instances when one employer is held liable for another employer’s labor violations and responsible for bargaining with another employer’s union. That ruling presents a big and uncertain liability when it comes to offering help to franchisees and employees.
In the Browning-Ferris decision, the NLRB overturned 30 years of precedent that determined when two companies are considered joint employers. Previously, one company had to exert direct control over another firm’s workers to trigger joint employer liability. Currently, joint employer liability may be established if one company exercises indirect or unexercised potential control. The new standard is ambiguous and fosters immense uncertainty.
Indirect control could mean as little as a franchisor providing employees at franchisees with training or apprenticeship opportunities. Due to the NLRB’s new and vague joint employer standard, every interaction like this becomes a legal question that must be kicked around by human resource professionals and lawyers prior to implementation.
It should be a priority for Congress to pass legislation to restore the traditional definition of a joint employer. If Congress does not clear up these looming regulatory threats, many companies could be forced to discontinue or halt implantation of apprenticeship and training programs. That’s not an outcome anyone should want.
Trey Kovacs is a policy analyst for the Competitive Enterprise Institute, a free market public policy organization in Washington, D.C.