For decades, the narrative in America has been clear: A college education is the golden ticket to financial success. This one-size-fits-all approach has been championed to our nation’s youth as the primary pathway to a prosperous future, but the hard economic facts tell a much more complex story. Rather than guaranteed success, the college-for-all push has left a trail of bad consequences for many students, from crushing student debt burdens, to under-employment after graduation, to a workforce misaligned with the broader market needs – all of which has led to a significant drop in financial independence and economic security for younger generations. According to a Pew Study, today only 25% of 21-year-olds are financially independent, compared to 42% in 1980. As we see more and more young college graduates being greeted with malaise rather than prosperity, it's time to broaden our perspective and recognize the value of trade education and apprenticeships, positioning them as viable and rewarding career paths for our youth.
Today, many students are programmatically herded into universities without a clear sense of direction, accumulating mountains of student loan debt while facing uncertain and financially unrewarding job prospects upon graduation. Meanwhile, industries essential to the economy and offering high-paying jobs—such as energy, construction, manufacturing, and other skilled trades—are experiencing critical labor shortages. For example, according to a recent McKinsey report, the global renewables industry will need an additional 1.1 million blue-collar workers to develop and construct wind and solar plants and another 1.7 million workers to operate and maintain them. We see this same phenomenon in construction, among other industries, where the US saw a worker shortage of 500,000 workers in 2023 alone. Where, and how, employers will find these workers is not clear. The college-for-all push has created a structural mismatch in the job market between the skills young people acquire and the skills the market is actually demanding.
The stigma attached to trade jobs has exacerbated this issue, too, by discouraging young people from pursuing these careers despite their economic stability and potential for financial growth. White collar work is generally perceived as bringing significantly higher pay, but this view is often a misconception, particularly when considering foregone earnings while enrolled in school and the large student debt loads required to finance college educations. For example, in 2023 the average entry-level electrician was paid almost $49,000, just $6,000 per year less than an entry-level financial analyst. But the financial analyst requires a 4-year degree, during which time electricians can complete a paid apprenticeship, combining on-the-job training with classroom instruction. That four year gap gives the electrician a head start with nearly $200k in salary over the financial analyst, while avoiding the burden of incurring tens of thousands of student loan debt to finance their education. These gaps are only becoming wider over time, as the cost of college education continues to soar, increasing by 245% since 1995 – more than 8 times real median income growth over the same period.
Normalizing trade education and apprenticeships in high schools can provide a much-needed shift. When it comes to apprenticeships, the US has only 600,000 or .3% of the working-age population in what would be considered a qualified apprenticeship which is 5 times lower than Canada and 12 times lower than Switzerland according to a Third Way report. Introducing practical, hands-on training in areas like retail, sales, administrative functions, and various trades can help students discover their interests and aptitudes early on.
It is time we make a societal shift to remove the stigma of these jobs and lean into the reality that these jobs provide a clear path to prosperity for our youth.
Corporations also need to change their approach to hiring. Today, nearly 1 in 3 jobs require a college degree, but this requirement is often driven by public perception rather than actual necessity. According to a study by the Harvard Business School, employers frequently default to requiring college degrees for positions that historically did not need them. This practice, known as degree inflation, has created a significant mismatch in the job market. For example, while only 16% of production worker supervisors have a college degree, 67% of job postings for the same position require one.
Employers are quick to label roles as "requiring a college degree" rather than considering the actual function of the job and the skills required to perform it well. A 2017 HBS study found more than 60 percent of employers rejected otherwise qualified candidates in terms of skills or experience simply because they did not have a college degree. In truth, many of these jobs would be better suited for an apprenticeship program, and would allow employers with better access to a highly skilled workforce tailored to their specific hiring needs.
Adopting apprenticeship programs can result in meaningful cost savings for companies, too. Employers benefit from reduced recruitment and training costs, as they find more direct paths to employees with the targeted skills they need. The data according to Apprenticeship.gov also shows evidence of increased employee loyalty 90% on average and higher productivity due to job fit and training. While we see growing evidence that employers are starting to understand this and utilize it in their hiring decisions – a recent study from Burning Glass Institute showed that the share of job postings requiring a college degree decreased by 7pp from 2017 to 2021 – employers need to significantly reduce the unnecessary emphasis on college degrees and recognize that many roles can be successfully performed by individuals without a traditional four-year college degree.
The societal and economic benefits of expanding trade education are clear. By equipping students with the skills needed for in-demand jobs, we can alleviate labor shortages in crucial sectors, reduce unemployment rates, and foster a more dynamic and resilient workforce. This shift can also lead to a more balanced higher education system, where costs are lowered, and resources are better allocated to support diverse career pathways.
Moreover, encouraging young people to take a year to serve their country or explore different career options can offer valuable life experience and clarity. This pause before committing to higher education or a specific trade allows individuals to make more informed decisions about their futures, potentially avoiding the debt and dissatisfaction that many face today, and allowing them greater flexibility when deciding to shift career fields later in life.
It's time to embrace a more rounded approach to career development, recognizing the inherent value in all forms of work, and paving the way for a more equitable and prosperous society. The traditional college education will still make sense for many aspiring students, but not all. Reevaluating the emphasis on college education and investing more in trade education and apprenticeships is not just a matter of individual choice but a strategic imperative for America's future. It is time to revisit our workforce needs and to provide better paths to prosperity for employees and employers alike.
