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The 2016 election heightened an ongoing debate in the United States about how best to respond to two of the foremost economic challenges of the current era: stagnant wages and a dearth of promising career prospects for American workers without a bachelor’s degree. These challenges persist despite a dramatic increase in recent decades in years of schooling and sizable investments (by both the U.S. government and individual students and their families) in traditional forms of higher education. In this chapter, author Robert Lerman argues that a large-scale apprenticeship program could address these challenges, while also yielding substantial additional gains for employers and the U.S. economy. He first reviews the evidence on apprenticeship, which suggests that increasing the availability of apprenticeships would increase youth employment and wages, improve workers’ transitions from school to careers, upgrade those skills that employers most value, broaden access to rewarding careers, increase economic productivity, and contribute to positive returns for employers and workers. He then proposes policies to stimulate a large-scale expansion of apprenticeship in the United States.

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Authors Jason Furman and Phillip Swagel propose two alternative policy options for promoting increased earnings and employment of low-income households: expanding the Earned Income Tax Credit (EITC) among childless workers, and implementing a wage subsidy for low-income workers that would be administered through employers. The EITC is based on household income and administered as a tax credit, while the subsidy based on hourly wages would require no filing or administrative effort by workers. They compare and contrast the costs and benefits of these two approaches to raising wages. Their two policy options are meant as part of a response to the sluggish income growth at the bottom of the distribution over the past several decades. Over the long term, a broad set of policies is needed to boost productivity and ensure that the resulting incomes gains are widely shared—and Furman and Swagel discuss the elements of such an agenda that should receive bipartisan support. Over the near-term, however, the policies they propose are well-targeted to improving the incomes and participation rate of workers at the bottom who have been left behind by the rising prosperity of the U.S. economy.

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Dramatic differences in income, productivity, and housing costs within the United States make geographic mobility important for spreading prosperity. But Americans’ ability to move to places like San Francisco, Boston, and New York in search of economic opportunities is limited by severe restrictions on new housing supply in these productive places. State-level Minimum Zoning Mandates (MZMs) allowing landowners to build at a state-guaranteed minimum density, even in municipalities resistant to development, would be an effective means of encouraging denser housing development. These MZMs would improve housing affordability, spread economic opportunity more broadly, and limit the environmental impact of new development.

This idea should appeal to voters and policymakers across the political spectrum. For those who are concerned about inequality, improved housing availability has the potential to help the most disadvantaged Americans. By making it easier for disadvantaged workers to access jobs, MZMs should increase employment, worker productivity, and ultimately earnings. Those who care about property rights should welcome a tool to override unnecessary restrictions on those rights. Finally, those who focus on making the best use of limited resources will recognize the benefits of using valuable land more efficiently.