“I have never let my schooling interfere with my education.” - Mark Twain
I’m extremely passionate about improving education to increase economic opportunity. It’s all I think about.
Last week someone asked me how I’d fix education. I started my spiel about K-12 reform, college affordability, better teachers. Then they stopped me.
“Why are you focused on schools? Most learners aren’t in schools. They’re at work.”
There are 100 million Americans getting workplace training every year. There are nearly 70 million students total in all of American education. The majority of learning in America happens at companies, not classrooms.
If you want to fix education, why would you start with the minority?
more numbers
America has 246 companies for every school. We have 33.2 million businesses and about 135,000 educational institutions.
Every one of those companies trains people. Every one teaches skills. Every one is technically an “education institution.” But we don’t think of them that way because they don’t have ivy on the walls.
Companies spend $98 billion annually training employees. These employees get paid while learning. They use their skills immediately. The training updates quarterly based on actual market needs.
Meanwhile the current student debt is around $1.8 trillion. They pay to learn. Half never use their degree. The curriculum updates every few years... maybe.
One system creates debt. The other creates value. Guess which one we’re trying to fix?
apprentice
“Tell me and I forget, teach me and I may remember, involve me and I learn.” - Benjamin Franklin
3% of LinkedIn profiles in the United States include the word “apprentice,” while this figure is 11% in the UK and 12% in Germany.
This term has always been a big deal, until recently. Ben Franklin was an apprentice to his brother at age 12, learning the printing trade. George Washington was an apprentice surveyor. Paul Revere apprenticed as a silversmith. The entire foundation of American industry was built on apprenticeships.
We abandoned this model for mass education. Germany and Switzerland kept it. Their youth unemployment is 6%. Ours hovers around 11%. Their workers enter the workforce skilled and debt-free. Ours enter with degrees they don’t use and debt they can’t pay.
The word “apprentice” disappeared from American vocabulary. We replaced it with “intern” - unpaid, temporary, leading nowhere. Meanwhile German apprentices earn money, learn trades, and get hired at 90% rates.
incentives. it’s all incentives.
“Show me the incentive and I will show you the outcome.” - Charlie Munger
The incentive structure explains everything. As one of my personal hero’s Charlie Munger says, “Never, ever, think about something else when you should be thinking about the power of incentives.”
Universities get paid whether you graduate or not. Whether you get a job or not. Whether you learn anything useful or not. They already have your money. It’s like asking the barber if you need a haircut; the answer is always yes, regardless of reality.
Companies only profit if you become productive. If you can’t do the job after training, they lose money. So they make absolutely sure you can do the job.
This is Munger’s/Taleb’s “skin in the game” principle. When FedEx was losing money on night shifts, they switched from hourly pay to paying per shift completion. Suddenly packages arrived on time. Same workers, different incentives, opposite outcome.
The results:
Companies with comprehensive training programs generate 218% higher income per employee
They have 24% higher profit margins
Their employees are 94% more likely to stay
Every dollar spent on training returns $4.70 in revenue
Meanwhile, 52% of college graduates work jobs that don’t require their degree. Even ten years later, 40% are still underemployed.
As Munger warned: “The iron rule of nature is: you get what you reward for. If you want ants to come, you put sugar on the floor.” Universities put sugar out for enrollment, not employment. Companies put sugar out for productivity. Guess which one gets results?
corporate training sucks
This all sounds great, however most workplace training is awful.
60% of employees say they’ve never received any formal workplace training. They taught themselves.
The average company spends just $1,280 per employee per year on training. That’s 84 times less than a year of college. Most of that goes to compliance videos nobody watches.
Only 25% of employees think training improves their performance. The rest call it outdated, irrelevant, or nonexistent.
This should be the scandal. We have 100 million people learning at work, and we’re doing it badly. Companies know training has 218% ROI but still treat it as a cost center. They know skilled workers stay longer but still won’t invest.
The opportunity is massive. If companies are already outperforming schools with terrible training, imagine what happens when they do it well.
the remaining problem
Companies don’t like unnecessary costs. All the great founders have always warned about cutting costs ruthlessly (shout out Founders Podcast).
The remaining problem here is that an 18-year-old out of high school who doesn’t have any specific skills is a massive cost to a private organization.
They are net-neutral productive if not negatively productive. Why would any company choose to train this person, let alone pay them?
Three models already work:
Tax credits. New York reimburses companies 50% of training costs up to $10,000 per employee. South Carolina offers $1,000 per apprentice. That tiny credit grew their program from 800 to 30,000 apprentices.
Industry coalitions. Tech companies jointly fund bootcamps. Manufacturing companies share apprenticeship programs. When someone leaves for a competitor, they stay in the industry. Everyone wins from a deeper talent pool.
Training bonds. You get free training but commit to staying two years. Or you pay it back. Airlines do this with pilots. Hospitals with nurses. It works.
The federal government found that 93% of apprentices who complete their programs get jobs immediately. Average starting salary: $60,000. Average debt: $0.
Compare that to college grads: 52% underemployed, $32,000 in debt, years of lost wages (and career compounding) while studying.
the capitalist education
“The government solution to a problem is usually as bad as the problem.” - Milton Friedman
Milton Friedman called public education an “island of socialism in a free market sea.” He was right. It’s the only major industry where competition doesn’t improve quality, prices don’t reflect value, and consumers can’t choose alternatives.
We could change this tomorrow. Three things need to happen:
1. AI makes corporate training actually good. Benjamin Bloom proved one-on-one tutoring improves performance by two standard deviations. AI can now deliver that at scale. Every worker gets personalized training at their own pace. McDonald’s workers learning Excel between rushes. Bank tellers practicing Python between customers. The technology exists. Companies just need to use it.
2. Government incentivizes entry-level hiring. Not with more programs. With less regulation. Let 16-year-olds work real jobs. Give tax credits for apprenticeships. Remove degree requirements from government jobs. South Carolina’s $1,000 credit created 30,000 apprenticeships. Imagine what real incentives could do.
3. Culture shifts to normalize work over college. This is already starting. Google, IBM, and Bank of America dropped degree requirements. Parents are questioning $200,000 art history degrees. Kids are choosing $60,000 apprenticeships over hundreds of thousands in debt.
The free market works everywhere else. It would work for education too.
Companies already train 100 million Americans. They just do it badly. With AI, tax incentives, and cultural change, they could do it incredibly well.
Every company becomes a school. Every job becomes education. The free market replaces the socialist island.
That’s how you fix education. Not ONLY by reforming schools. By recognizing that most learners aren’t in schools.
They never were.