But there's a catch

Peter Dorman notes Alex Tabarrok saying nice things about active labor market policies in northern Europe. But, Dorman points out:

Just one thing though.  What makes these apprenticeships so valuable for the students?  And why are employers willing to pay more for well-trained employees than dumbing down the jobs for minimum wages or simply outsourcing as much as possible?  Each country is different, but they all share part of two answers—labor market regulation and stakeholder corporate governance.  The first of these is especially crucial to mass apprenticeship: to maintain demand for high-end labor, there need to be rules mandating employment rights, credentials and, especially, unions.  To minimize outsourcing, labor and the community need a strong voice in corporate management.  In addition, the whole system is nurtured and nudged with multifarious forms of public subsidy.

To put it simply, if you want the social democratic educational strategy, you’re going to need a social democracy to go along with it.  I’m happy to have Alex on board.

Is this last comment supposed to facetious? Let's look at what Tabarrok actually says:

Consider those offered in Europe. In Germany, 97 percent of students graduate from high school, but only a third of these students go on to college. In the United States, we graduate fewer students from high school, but nearly two-thirds of those we graduate go to college. So are German students poorly educated? Not at all.

Instead of college, German students enter training and apprenticeship programs—many of which begin during high school. By the time they finish, they have had a far better practical education than most American students—equivalent to an American technical degree—and, as a result, they have an easier time entering the work force. Similarly, in Austria, Denmark, Finland, the Netherlands, Norway, and Switzerland, between 40 to 70 percent of students opt for an educational program that combines classroom and workplace learning.

In the United States, "vocational" programs are often thought of as programs for at-risk students, but that's because they are taught in high schools with little connection to real workplaces. European programs are typically rigorous because the training is paid for by employers who consider apprentices an important part of their current and future work force. Apprentices are therefore given high-skill technical training that combines theory with practice—and the students are paid! Moreover, instead of isolating teenagers in their own counterculture, apprentice programs introduce teenagers to the adult world and the skills, attitudes, and practices that make for a successful career.

From the perspective of existing social democratic institutions, active labor market policies serve are a way to make those institutions pay for capitalists in the form of more productive workers and a more intensively employed labor force as a whole. It is the carrot to go along with the weakened-but-still-surviving stick of entrenched working-class power. From the perspective of a thoroughly liberal capitalist economy like the U.S., and coming out of the mouth of an avowed libertarian, praise for such policies must give rise to at least a little suspicion. Notice that in Tabarrok's discussion, the apprenticeships are seen only in terms of creating an appealing labor force. Why are they able to get good jobs? Because employers "consider [them] an important part of their current and future work force." "Look," it seems to say, "even the European social democracies are crafting their policies so they benefit employers even as they seek to maintain the living standards of employees! So, of course, the U.S. needs to do the same and not get distracted with coercive policies like the minimum wage, support for unionization, and so on." Dorman's point is a valiant attempt to bend away from this implication to say that, well, no, it's only because there's already a well-established set of institutions enforcing the power of labor and limiting that of employers that these policies work at all, so if we want to follow the lead of the germans and dutch, we're going to have to do a lot of work on both sides of the equation, not just on "labor supply side" policies like apprenticeships.

Sadly, I suspect his point will fall on deaf ears, even though it's far from controversial in the comparative political economy literature.