In countries like Germany, workers in a variety of sectors receive training as apprentices and then over the course of their working lives. Companies invest and reinvest in their workers, because the latter can insist on it, possessing as they do a seat in the boardroom as a result of the 1951 Codetermination Law. Employers’ associations join with strong trade unions to organize and run training schemes at the sectoral level. The schemes are effective, in part, because the federal government sets standards for training programs and issues uniform curricula for trainees.
In the US, board membership for workers’ representatives, strong unions, and government regulation of private-sector training are not part of the prevailing institutional formula. As a result firms treat their workers as disposable parts, rather than investing in them. And government does nothing about it.
So here’s an idea. Instead of a “tax reform” that allows firms to expense their capital outlays immediately, why not give companies tax credits for the cost of providing lifelong learning to their employees?
Barry Eichengreen is professor of economics at the University of California, Berkeley; Pitt Professor of American History and Institutions at the University of Cambridge; and a former senior policy advisor at the International Monetary Fund. His latest book is "Hall of Mirrors: The Great Depression, the Great Recession, and the Uses – and Misuses – of History."