Gen Z DITCHES College For Blue Collar Work

Summary

The transcript discusses the shift in Gen Z's career choices, favoring trade jobs over traditional college paths. It highlights the rising enrollment in vocational education and the increasing demand for skilled trades, with higher starting salaries compared to white-collar jobs. The conversation emphasizes the practicality and financial benefits of this trend, as well as the cultural change in perceptions of blue-collar work, suggesting a positive impact on the economy and individual prosperity.

Takeaways

• 🎯 Gen Z is increasingly choosing trade-focused educations over traditional college degrees, leading to a significant rise in enrollment in vocational community colleges.
• 💡 The shift away from college education is driven by the belief that the wage premium for a college degree is no longer worth the cost and debt associated with it.
• 📉 There has been a notable decline in the average age of workers in trades such as electricians, HVAC technicians, and carpenters, indicating a younger generation entering these fields.
• 🔧 The demand for skilled trades is high due to retiring older workers and a lack of new talent, leading to higher starting salaries for trades compared to traditional white-collar jobs.
• 💰 The median pay for new construction hires rose significantly, outpacing the increase in salaries for new hires in professional services.
• 🏠 Skilled trade workers have the flexibility to live anywhere, with their wages often going further in smaller towns compared to major metropolitan areas.
• 🌟 The cultural perception of college-educated white-collar work versus blue-collar skilled trade work is changing, with the latter gaining more respect and recognition.
• 🎓 The high cost of college education and the resulting student debt are seen as barriers to prosperity and family formation, leading to a reevaluation of the value of a college degree.
• 🚀 There is a call for colleges to compete on the basis of job placement and affordability, potentially leading to policy changes and a shake-up in higher education.
• 🌐 The rise in alternative career paths and the decreasing stigma around skilled trades may impact college affordability and enrollment, as more students seek viable and financially sensible options.

Q & A

What is the term used in the script to describe the shift of Gen Z towards vocational careers?

The term used is 'tool belt generation'.

According to the Wall Street Journal quote, which fields are experiencing an increase in young workers?

Plumbing, electrical jobs, and other trades are seeing more young workers.

How has the enrollment in vocational-focused community colleges changed from the 2021 baseline?

Enrollment in vocational-focused community colleges has increased by about 15% from the 2021 baseline.

What trend is observed in the average age of select trades professionals since 2020?

There has been a precipitous drop in the average age of trades professionals such as electricians, heating and air conditioning workers, and carpenters, except for welding.

What are two reasons young people are choosing trades over college according to the script?

They believe the wage premium for college is no longer worth it, and they see jobs like plumbing, welding, and electrician work as essential skills that can't be replaced by AI.

How has the median pay for new construction hires changed in the last year mentioned in the script?

The median pay for new construction hires rose 5.1% to $48,000.

What is the comparison in starting salaries between trades and professional services jobs for new hires?

New hires in trades start at a higher salary compared to new hires in professional services, which earned an annual $39,000.

What is the advantage of working in trades in terms of location flexibility?

Workers in trades have the flexibility to live wherever they want, not necessarily having to reside in a city or major metropolitan area.

What impact could the shift towards trades have on higher education?

The shift could force colleges to compete by marketing themselves more effectively, potentially leading to changes in policies, lower admission rates, or increased focus on job placement.

What cultural change is being discussed in relation to the perception of college-educated white collar work versus blue collar skilled trade work?

There's a growing recognition and respect for blue collar skilled trade work, with a reduction in the stigma that has traditionally been associated with it, leading to a more balanced view of both career paths.

What is the concern raised about the cost of college education and its impact on society?

The concern is that the high cost of college education, coupled with the inability to discharge student loans through bankruptcy, is leading to significant debt burdens that affect family formation, entrepreneurship, and overall life choices.

Outlines

00:00

🎓 Shift in Gen Z Career Choices

This paragraph discusses the notable shift in career preferences among Generation Z, highlighting their increasing interest in trade jobs over traditional college education. It cites a Wall Street Journal quote about Gen Z becoming the 'tool belt generation' due to the rising appeal of vocational education and the associated higher wages. The paragraph emphasizes the data showing a 15% increase in enrollment in vocational-focused community colleges since 2021, contrasting with minimal growth in other educational sectors. It also touches on the decreasing average age of workers in trades, suggesting a positive outlook for young people seeking stable, well-paid jobs that are less likely to be replaced by automation.

05:02

🏡 Geographic Flexibility and Earning Potential in Trades

The second paragraph explores the geographic flexibility and earning potential associated with trade jobs. It argues that the ability to live anywhere and earn a substantial income, such as $100K per year, is a significant advantage of trade careers, especially when compared to the high cost of living in metropolitan areas. The summary also points out that certain trades, like nursing and electrical work, are in demand across various locations, providing job security and the option to move or travel for higher wages. The paragraph suggests that this flexibility and the potential for higher starting salaries in trades could lead to a cultural shift in the perception of college education and a reevaluation of its worth compared to vocational training.

10:04

💰 Economic Implications of College Debt and Alternatives

This paragraph delves into the economic implications of college debt and the potential benefits of alternative educational paths. It criticizes the high cost of college education and the resulting debt, which can hinder family creation and entrepreneurship. The speaker advocates for debt forgiveness and free public college education, particularly for those pursuing careers in STEM fields where a college degree is most valuable. The paragraph also discusses the potential impact on college affordability and the need for higher education institutions to adapt to changing attitudes and demands. It expresses hope that the rise in vocational education will lead to a more affordable and accessible college system, ultimately benefiting those who choose to pursue higher education.

Keywords

💡Gen Z

Refers to the demographic cohort born from the mid-to-late 1990s to the early 2010s. In the video, it is mentioned that Gen Z is becoming more sensible in terms of employment choices, opting for trades over the traditional college track, which is seen as a positive development.

💡Millennial

A generational cohort born between the early 1980s and the mid-to-late 1990s. In the context of the video, it is suggested that Millennials may not have been as practical in their career choices compared to Gen Z, particularly in relation to the pursuit of higher education and its financial implications.

💡Trades

Jobs that require specific technical or vocational skills, often involving manual labor, such as plumbing, electrical work, and carpentry. The video emphasizes a growing interest among young people in trades as an alternative to the traditional four-year college degree, due to better pay and job security.

💡Vocational Education

Education that prepares students for direct entry into a specific trade, craft, or occupation. In the video, it is noted that enrollment in vocational education has increased significantly among young people, reflecting a shift away from the traditional college track.

💡College Track

The traditional educational path that leads to a four-year college degree. The video discusses the disenchantment with the college track among young people due to its high costs and the mounting student debt it often entails.

💡Wage Premium

The additional income or higher wages that individuals with a certain level of education or training can expect to earn over those without it. In the video, it is argued that the wage premium for a college education is no longer worth the financial burden it imposes.

💡Productivity Gains

Improvements in efficiency and output that result from technological advancements or better working methods. The video suggests that young people are aware of productivity gains in tech companies and are choosing careers in trades that are less likely to be automated or replaced by AI.

💡Debt

An obligation to pay a sum of money, often incurred for educational purposes. In the video, the issue of student debt is highlighted as a significant burden for many young people, which is driving them to seek alternative paths that do not involve expensive college education.

💡Job Security

The likelihood that a person will keep their job and not be laid off or made redundant. The video emphasizes that trades offer more job security, as the demand for skilled workers in these fields is high and not easily replaced by automation.

💡Cost of Living

The amount of money needed to sustain a certain standard of living in a particular area, including expenses like housing, food, and transportation. The video suggests that individuals in trades have the flexibility to live wherever they want, as their skills are in demand across various locations, potentially with a lower cost of living.

💡Cultural Views

The collective attitudes, values, and beliefs that characterize a society or group. The video discusses a shift in cultural views towards valuing blue-collar work and trades as equally important as white-collar jobs, breaking down previous stigmas and misconceptions.

Highlights

Gen Z is becoming more sensible than the millennial generation in terms of employment choices.

There is a shift among young workers towards trades due to disenchantment with the college track.

Enrollment growth in vocational community college has increased by 15% from 2021, a significant rise in modern American history.

The average age of select trades has seen a precipitous drop since 2020, indicating a younger workforce entering these fields.

The wage premium for college is no longer considered worth it by many.

Young people are recognizing the value of jobs that cannot be replaced by AI, such as plumbing, welding, and auto mechanics.

The median pay for new construction hires rose 5.1% to $48,000, compared to a 2.7% increase for new hires in professional services.

The demand for skilled trades is high due to an aging workforce and a lack of young talent.

Trade jobs offer more flexibility in terms of where one can live, as opposed to being tied to a city.

The cultural view of college-educated white collar work versus blue collar skilled trade work is changing.

The stigma around trade jobs is diminishing, leading to more people considering them as a viable and positive choice.

The rise in college tuition fees and student debt is a significant issue, with many questioning the value of a college education.

The cost of living, especially housing, can be significantly lower in smaller towns, making trade jobs more financially appealing.

The shift towards trades could lead to colleges having to compete and offer better value for their tuition fees.

The current student loan system is seen as predatory, with loans being difficult to discharge through bankruptcy.

The decline in college enrollment may lead to more affordable public college education.

The discussion highlights the importance of diverse career pathways and the potential for a more balanced approach to higher education and vocational training.

Transcripts

at the same time we wanted to put some

good news actually in the show there's

been an astounding development amongst

gen Z even though a lot of people are

very concerned about their political

views and maybe their online phone usage

it seems that they're a lot more

sensible than my millennial generation

whenever it comes to employment let's go

and put this up there on the screen

quote from the Wall Street Journal how

gen Z is becoming the tool belt

generation more young workers are going

into trades at disenchantment with the

college track continues Rising pay and

new technologies shine up plumbing and

electrical jobs let's actually go to the

next part because this is a really

interesting chart that people can see it

shows that enrollment growth in

four-year college degree in in

vocational Community focused Community

College has gone up by some

15% from the 2021 Baseline whereas there

has been maybe a single-digit increase

if you look at other four-year uh

institutions and even Community College

that are not vocational Focus what that

tells us is that the spike the overall

15 or so% spike is the one of the most

extraordinary that we've seen in modern

American history for younger people who

are explicitly choosing to go into

trades based educations with set wages

that are much higher than they ever were

before than at any time previously when

they were choosing for more

service-based economies we can go to the

next one too because this is really

really fascinating is you can watch

there how the precipitous decline has

happened in the average age of Select

trades electrician heating air

conditioning Carpenter and I think every

trade except for welding has seen a

precipitous drop just since 2020 and

especially since

2017 in the am in the median age of the

people who are engaged in the trades

Crystal and the main thing that comes

through in this piece over and over

again on top of the data is that people

believe a couple of things number one is

that the wage premium for college is no

longer worth it that is absolutely 100%

true but two and even more interesting

to me young people are sitting there 18

years old they're looking at AI they're

looking at the productivity gains that

are being rolled up into the stock price

of these big tech companies and they're

saying yeah you know what the one thing

you can't AI is Plumbing welding having

a job as an auto mechanic having a job

as an EV technician having a job as an

electrician they're always going to need

that if anything that's what's going to

build the backbone the future economy

and they're choosing to make that choice

and I think they're setting themselves

up for a much easier and previously

trotten path to middle class and frankly

to Prosperity they're not taking out a

lot of debt they're setting themselves

up for very very well they're going to

start earning a lot more money than they

would have previously it's a very very

sensible direction for a lot of people

who are out there yeah it's incredibly

rational college is insanely expensive

and debt loads are skyrocketing with no

real relief in sight so you've got that

on one side of The Ledger um you have a

bunch of young people who may have

watched their parents um you know white

collar professions and seen how their

life is consists of staring at a

computer screen all day and thought you

know what this isn't really what I want

for myself and so I think there's a

reaction in the other direction there um

there's also tremendous demand in some

of these uh trades where there had been

previously a crisis of a lot of uh older

Journeymen who were you know retiring

and there wasn't a clear pipeline of new

Young talent to replace them well that

is now r versing and uh you pointed to

the pay so in this piece they point out

that the median pay for new construction

hires actually Rose 5.1% to $48,000

roughly last year by contrast new hires

in Professional Services so like your

sort of traditional white color job out

of college earned an annual

39,000 um and it experienced a 2.7% so a

lower increase from 2022 this is

according to ADP so at least in terms of

where you start out you make start at a

higher salary if you go into one of

these trades versus if you go and spend

all the money on a four-year college

degree now still over the lifetime of

these different careers Blue Collar

versus white collar right now the median

for White Collar work uh once you're

into your career continues to outpace

Blue Collar work but you know does that

remain the case is it worth it given the

extraordinary expense that you have to

incur on the front end the fact that

there's been a shift away from this idea

that everyone has to go to college and

if you're going to succeed in life you

have to go to college and that's the

only path forward I think it's a really

positive thing because you know there's

also a lot of uh people who find

tremendous fulfillment in the trades and

like being able to build things and work

with their hands and don't want to just

sit in an office all day so I think this

is a really incredibly positive and

hopeful development honestly the other

very important thing with this is we

talking about the well part of the

problem that we talk about with wages is

that we look at the average so yeah it's

if you're in White Collar work if you're

college educated you are probably on

average your lifetime earnings are going

to be higher but where do you live what

are you netting out one of the nice

things about trades is you can live

wherever you want you don't necessarily

have to live in a city if you don't want

to and 100K a year in a smaller town

where they need HVAC just as much as

HVAC as we live here in Washington DC in

some cases your uh cost of living can be

especially on housing can be like 1 the

amount in a major metropolitan area you

have a lot more flexibility I see this

all the time with people who are skilled

uh especially like nurses uh nurses they

can just decide to move whenever they

want and they're in demand literally

everywhere from small town Big Town if

they want to make more money they can

travel to uh it's an incredible uh

career field I see this too with people

who are electricians and plumbers it's

if when you have such a valuable skill

that you can effectively transplant

anywhere in the entire United States you

have more job security and you also make

it so you don't necessarily have to live

in a major metropolitan area if you

don't want to just gives you a ton of

optionality and the other thing and this

is what I really hope for is that the

colleges finally have to compete because

if their revenues start to go down

they're going to have to start marketing

themselves as to why they are actually

worth it and not just so Mom and Dad can

feel good that you went to a four-year

college degree they actually got to be

like no no no if you come here we're

going to get you a job so actually

invest some of that money that they're

basically stealing from people and from

the government into actually getting you

a job on the other side or maybe they'll

lower their admissions rates or maybe

you know we can change up our policy

that's probably the most fundamental

important thing is the shake up to

higher education yeah I I think that

that is correct I also think there's

something really important happening in

terms of um cultural views of college

educated White Collar work versus Blue

Collar skilled trade work which this was

really you know for a lot of years

especially in sort of like the peak of

the neoliberal era College was viewed as

the Pinnacle M And Trades were

considered sort of like the fallback

right the Lesser Choice it was like the

stepchild you know they talk about in

this article they talk about a high

school where it used to be you know the

Trade building was sort of pushed off to

the side and people sneered at it and

looked down their nose at it and now

it's got uh nice new equipment it's at

the front of the school It's featured

people actively seek this out you know

it's doesn't have that same sort of like

stigma around it that unfortunately it

has for for far too long so I think

that's a really positive direction as

well and also could lead to you know

Blue Collar people average working

people having more say and more

political power um in terms of our

politics as well so I think that's

really important I also think there's

something sogger to the fact that just

like the the Mystique and the fantasy of

college is really worn off yes how many

people go and you know they do the thing

they're supposed to do and they get

their four-year degree and then end up

you know Barista Starbucks or working in

in a field or an industry where they

didn't even need a four-year college

degree or they're certainly not working

in me I mean perhaps a majority of

people end up not even working in the

thing that they studied in college so

it's like what are we really doing here

are we just here for some sort of a life

experience or is this actually leading

us to where we want to be in terms of

our life and career trajectories so the

fact that stigma is being removed the

fact that wages are going up the fact

that this is being seen as like a viable

positive affirmative Choice by more

people in

I genuinely think this is such a

positive thing absolutely can't let's

spend some more time on this 39% of 18

to 24 year olds are enrolled in a

postsecondary program that's way too

high it's way too high the vast majority

of those people are enrolled in quote

unquote knowledge-based service programs

and previously were not engaged in

vocational programs the previous percent

of people who went to college I think

the right amount was roughly around 19%

it should be a luxury good it should be

something where yes you have to take out

a tremendous amount of debt or you come

from a family that can afford it and

then you can use that wage premium in

the service based economy but the vast

majority of people don't need to attend

it's not a good trade So 20% or so of

people who attended fell exactly into

that bucket now I'm not saying it's fair

I don't think it is fair but what I do

think is that watching people go into

hundreds of thousands of dollars in debt

the average college what what is the

average student loan that's out there

something like 25 something $30,000

especially on these variable interest

rates or some of these private loan

programs is is Usery I mean it's it's

insane and thanks to our current

president by the way you can't even uh

discharge it through bankruptcy so it

makes it that it's just incredible news

around people's neck in this country

right now we have a huge problem where

the average woman wants to have 2.2 kids

and is having 1.8 the number one reason

that families site as to why is money

and debt specifically a huge portion of

this is student uh debt the other issue

is I just was talking about if you want

to have a job and you want to work with

your college degree the likelihood is

like us you need to move to a major

metropolitan area which has a very high

cost of living and is where the major

concentration of these things are and so

over and over you're getting on the

wheel where very few people are actually

winning the people who won are the

Boomers in the past and like I said

traditionally some 20% or so of the

population which does really justify

that college premium highly concentrated

in stem in particular for what is

actually worth it but we never thought

about about it as a trade we just

thought of it as an intrinsic good and

that's really how we ended up here I

mean I'm just in favor of more choices

right I I think we should have Deb

forgiveness I think we should have free

public college so people who want to

pursue that path who want to go into

stem want to go into a white collar

career for them that's the thing and it

makes sense for them that they have that

opportunity and that's fantastic I think

it should be you know like I said I

think public college should be free it

should certainly be way more affordable

than it is right now and we take it for

granted because of the era that we grew

up in that it should be this incredible

burdensome load when not that long ago

there University of California's system

was free and many other schools were

extremely affordable where you could

work and actually afford to pay your way

through school like the idea of being

able to do that is preposterous now so

people even at State schools leave with

tens of thousands of dollars in debt to

start their life that has Ripple effects

throughout their entire life as you're

pointing out not only with family

creation also really stifles

entrepreneurship because you know you've

got this thing you got to pay every

month and that's hanging over you and so

you just feel like all right I got to

get to work I got to get whatever is the

highest paying job that I possibly can

forget about potential entrepreneurship

forget about whatever the dream job

might be that potentially is lower

paying I just got to get on that grind

and try to pay this sucker off so it

really does constrain from the jump your

life choices which is a disaster so the

fact that you have you know other

Pathways that are being seen as

attractive that people are pursuing that

you know have that the the stigma around

them is is going away and that lead can

lead you know very clearly and like on a

direct path to this sort of you know

stable middle class life it's it's a

really it's a really good thing really

encouraging and I think will potentially

have some impact on College

affordability as well because you are

already seeing actually enrollment

declines in fouryear institutions as as

things are shifting so I do think it's a

a good direction yeah and I hope that

these private colleges in particular I

hope they get crushed um from the wave

of this because it is Criminal how much

they've been jacking so true some like

freaking mediocre school and you're

paying these insane amounts it's crazy

did you see that in the Northeast some

of these premium like liberal arts

colleges are now charging some $90,000 a

year look Yale maybe and maybe I want to

say again big maybe the rest of them

Sarah Lawrence or something like that

you are an idiot if you're paying

$90,000 for something like that ain't

worth it it ain't worth it hey guys if

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