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Missouri hopes tax credits for internships and apprenticeships will grow and retain young talent

Missouri Gov. Mike Parson after signing the Intern and Apprentice Recruitment Act in St. Louis on Tuesday, August 8, 2023. The law incentivizes businesses in the state to add new intern or apprentice positions to their payrolls.
Eric Schmid
St. Louis Public Radio
Missouri Gov. Mike Parson after signing the Intern and Apprentice Recruitment Act in St. Louis on Tuesday. The law incentivizes businesses in the state to add new intern or apprentice positions to their payrolls.

Missouri Gov. Mike Parson signed legislation Tuesday designed to help the state recruit and retain young talent in the workforce.

The Intern and Apprentice Recruitment Act, which easily passed in the legislature earlier this year, encourages businesses to grow the number of interns or apprentices they employ.

It offers companies a tax credit of $1,500 per paid intern or paid apprentice up to $9,000, or six such positions. Crucially, the tax credits only apply to newly created positions, said one of the bill’s sponsors, state Rep. Brad Christ, R-St. Louis County.

“If you hire on average 10 interns a year, now you have to hire 11, 12, 13, up to 16 to take advantage of the tax incentive,” he said.

Political leaders expect the new law will make Missouri more competitive when it comes to attracting businesses.

“No company is going to come to your state if you’re not doing two things,” Parson said. “If you don’t have the workforce and you’re not doing something to prepare for tomorrow, they’re not coming. It’s that simple.”

The legislation also aims to tackle a persistent problem in which graduates of the state’s higher education institutions wind up leaving the state, said Jason Hall, CEO of Greater St. Louis Inc.

“Missouri colleges and universities build a strong pipeline of undergraduate talent,” he said. “But our team found that we’re exporting 20,000 of those college graduates to other states. And that’s just unacceptable.”

In the St. Louis region, business leaders have bet on industries like geospatial, ag-tech and advanced manufacturing to drive future economic growth, but those industries will need talent to thrive.

“We need people to fill these high-quality jobs and careers that we're all creating together,” Hall said. “Retaining and attracting talent is just critical to this metro and ensuring the success of the sectors.”

But that’s not happening right now, he added. Compared to other Midwestern cities, like Indianapolis, Minneapolis and Columbia, Kansas City and St. Louis have much lower internship rates, Hall said.

This makes it challenging, especially for those, like Ziyaad Raza, who may want an internship or apprenticeship closer to where they grew up. Raza, a current junior at New York University, is an intern at Greater St. Louis Inc.

“Unfortunately, a lot of my friends are still out in New York and New Jersey and California because they didn't have the opportunity to come here,” he said. “I haven't been able to see them; they haven't been able to see their family simply because the opportunity just isn't here for them.”

And that’s critical for companies in the region and state since many companies wind up offering their interns or apprentices full-time jobs.

Kathy Mazzarella understands this well as the chairman, president and CEO of St. Louis-based Graybar, a wholesale distributor of electrical, communications, data networking and industrial products.

“Our interns not only gained valuable experience through this program, many of them have chosen to stay with our company after their graduation,” she said.

Mazzarella added the legislation reinforces Missouri’s commitment to a wide range of industries, including trades which commonly have apprenticeships. The state is one of the top in the nation when it comes to completed apprenticeships.

To Parson, it emphasizes the abundance of opportunity for workers and how the entire state is poised to benefit.

“There’s no reason in any category they can’t work right here in Missouri,” he said.

Eric Schmid covers business and economic development for St. Louis Public Radio.