Transcription
According to recent reports by DeWalt in the Wall Street Journal, over half of Gen Z workers who have tried to enroll in a trade school were told no. Community colleges, vocational programs, and technical schools alike are now struggling to provide enough apprenticeships and job opportunities for the students that they already have, which is pushing over 150,000 young adults every year into private trade schools, saddling them with even more debt, worse loan default rates, and often lower salaries than graduates of traditional 4-year universities.
At the same time that trade schools have seen their quarterly profits nearly double after the United States funneled hundreds of billions of dollars into trying to bring back the trades. Six years ago, the United States told a generation of young adults that if they just went blue collar, that they could earn a six-figure job with little to no student debt. But the real American job market failed to deliver on that promise. And that's what I want to talk about today.
First and foremost, because I was there six years ago when the US started giving rural communities millions of dollars to amp up their workforce development, and so that I can speak directly to what went wrong and what's actually happening with things like the job market, colleges, trade schools, and student debt in this country. And why restoring the trades is still incredibly important, but is being done in a misguided way, especially as a bunch of new laws are about to kick in that are going to make this issue even more politicized and less grounded in reality. So, let's just get right into it, starting with some good news first.
As of July 1st, PEL grants are being expanded to cover workforce training programs between 8 and 15 weeks long that have at least a 70% graduation rate and a 70% job placement rate within 180 days of graduation. In order to receive the workforce Pell, students enrolling in vocational programs would have to go through the same process as students at universities, where they fill out the FAFSA once per year. And then, depending on your parents' household income and how many siblings you have, could help you receive upwards of $7,395 that would automatically go towards your school's tuition.
In my opinion, that is a pretty big deal and an overall good thing because historically in the US, we've had an economic problem called the student debt paradox, where the people most likely to default on their student loans and have the hardest time paying them back are, ironically, students at community colleges and technical schools, despite the fact that they tend to have much lower student debt totals than students at traditional 4-year universities. And the reason for that is twofold.
First and foremost, students at community colleges and technical schools are just way more likely to come from poorer socioeconomic backgrounds. Upper middle class and wealthy families have never bought into the narrative that it's a smart decision to go to a cheaper school for two years and then transfer. That is a very working-class idea in this country. And it's exactly what I was told growing up in rural Nevada, and reasonably so, because it is a lot cheaper than starting at a four-year school as an 18-year-old. But the problem is, transfer students tend to have pretty bad outcomes for a whole bunch of reasons that could be their own video. Which is why financially stable families don't encourage their kids to arbitrage the cost of college tuition. Because the student debt paradox basically says that statistically, trying to make college as cheap as possible can easily hurt you over the long term.
And the second big reason for that is because cheaper schools just tend to have worse employer relations and fewer in-person hiring events than more expensive colleges. And because your starting salary straight out of school plays such a big role in lifetime earnings, graduates from more expensive schools, statistically, not always, tend to make millions of dollars more over the course of their careers, regardless of how wealthy their parents were. And so, even though it hasn't been implemented yet, I am personally a fan of this workforce Pell Grant idea. It's going to make paying tuition a lot easier for the Americans who need that help the most, and it's going to hold cheaper schools accountable for making sure that their students actually graduate and land a full-time job. But again, this has not rolled out yet, so we'll see how things play out in practice.
But now, let's get to the bad news. Pretty much every budget proposal we're seeing for 2027 has included slashing funding to the Department of Labor by 25% to 30%, specifically by eliminating the Job Corps, shrinking the budget and staff that OSHA has access to, and cutting the Women's Bureau, as well as a $56 million reduction to the Bureau of Labor Statistics, which will make it even harder to get accurate numbers on things like unemployment and inflation, which the Bureau is responsible for collecting data on.
Now, this is where we get an interesting hypocrisy in how current policies are handling the job market and workforce development because on the one hand, policies are being put in place to try and revive the trades, provide good jobs to young Americans, and address the student debt obstacle that stands between a lot of young people and their dream careers. But on the other hand, policies are going in that try to hide just how poorly the job market is doing and actively disincentivize young people from embracing blue-collar careers. Because if these slashes go through, young adults are going to have less access to financial aid, fewer workforce development programs, and honestly, less incentive to go work these more dangerous jobs when they hear that programs like OSHA are getting cut.
And we know that this will happen because we saw the same thing back in the '70s. The United States went on a major union-busting campaign from 1970 to 1985, which led young men to transition into white-collar office work because they could no longer trust the manufacturing industry to provide them with competitive salaries or safe working conditions once the unions went away. And now that we have social media, young adults are paying even more attention to these budget cuts and broken promises. And so, if it looks like this push towards the trades is just some big political rug pull, then young adults are going to rapidly stop buying into it, which is a topic of conversation that's already growing online, especially in places like Reddit.
That being said, I do think that Congress is coming around to just how bad that would be for the overall job market and the economic well-being of the American people, which is why members of Congress on both sides recently came together and rejected a lot of the attempts to dismantle the Department of Education that were originally laid out in Project 2025, which would have reduced the department's budget by over 15% and eliminated workforce development programs for rural and low-income Americans like TRIO and GEAR UP.
Remember when I said that I was there six years ago when the US started funneling billions of dollars into restoring workforce development in rural communities? Well, back in 2020, I got hired to help manage a $1.5 million GEAR UP grant to try and get rural teenagers in northern Utah and southeastern Idaho enrolled in vocational programs at technical schools. Much like those students, I also grew up in relative poverty in rural Nevada, working as a copper metal recycler and then as a flooring installer in housing construction, and then eventually as a crime scene restorationist to pay my way through school and make a better life for myself. And so after I went to grad school, they were like, "Hey, the government is throwing so much money into trying to restore blue-collar jobs in rural America. Why don't you go out there and try to uplift some other young people who are growing up like you?" And so that's what I did. I made sure that there were buses to take students from the high school to the local trade school during the day. I took students on field trips to different college campuses and worksites all across the state. And I helped secure 83 new apprenticeship programs for those students. Still to this day, probably the most impactful job that I have ever had.
But everything changed when local corruption attacked. I can't say too much here for legal reasons, but long story short, my boss got fired. The principal of the school I was working at also got fired. And GEAR UP Utah became a classic case study of how well-intentioned federal policies can fail when improperly implemented at the local level. Because if there is no oversight, then that money can get reallocated or straight up stolen by bad actors. And if that money is getting funneled into things that don't align with local job markets, then the money might simply go nowhere. Because it's all well and good to say that America needs more plumbers. But if your county does not need more plumbers, then all you're doing is promising these boys a six-figure job after graduation only for 90% of them to not be able to find relevant work.
And this is the biggest reason why America's gamble on blue collar isn't working. Because money is getting spent on the wrong programs in the wrong places. Last week, the Wall Street Journal released a massive story on why so many people who chose careers in the trades still ended up with more debt and lower salaries than traditional college graduates. One of their stories followed a US Army veteran who moved from Tennessee to Houston to attend the Universal Technical Institute, where he took on $45,000 in student loans and then got hired at an automotive company in North Carolina that's paying him $23 an hour, which, if you don't know, is only about a $47,000 annual salary before any overtime. However, his company was also willing to reimburse his $250 a month student loan payments. So, this ended up getting framed as something of a feel-good story. But, let's really zoom out for just a second.
In 2026, the average college graduate has $32,000 in student debt if they have FAFSA loans, or $42,000 in debt if they took out private loans. But those are a lot less common, so most people are closer to that $32,000. As of last spring, the average college graduate is earning over $66,000 straight out of school, with hiring expected to increase by 5.6% this year. So, the average traditional college student is taking on less debt and making more money than this feel-good story about the trades that the Wall Street Journal was highlighting.
Another example they gave talked about an aircraft maintenance program at a trade school in Florida that cost about $40,000 over the course of 14 months. And this one hit pretty close to home because I used to be the engineering career specialist at Utah State University, which is a traditional 4-year school that also happens to offer an aircraft maintenance degree, which in 2026 only costs $18,000 for in-state students, less than half the cost of that private trade school in Florida, while also offering all of the other resources that a university provides like dorm life, sports games, clubs, dating, parties, etc., etc. From both a financial and a lifestyle well-being standpoint, the program at USU is an infinitely better deal than the one in Florida.
But policymakers over the past six years have seriously failed to see the nuances of that reality when it comes to workforce training. And this is where America's blue-collar gamble ultimately fell apart. Because the problem was never that universities are bad and trade schools are good. The problem is that policymakers treated a return to the trades as a universal solution to a problem that was never universal in the first place. Labor shortages are not national. They are local. And throwing money into workforce training programs only works when it matches regional demand.
Over the past six years, the United States funneled $1.3 trillion towards restoring blue-collar infrastructure because it felt like the right thing to do after decades of telling young adults that college was the only answer, and also because it fed into a really appealing narrative about who we are as Americans, which ultimately helped them get more votes without really stopping to ask, are there truly enough stable, valuable, well-paying careers for young adults on the other side of today's job market?
At the end of the day, America's blue-collar gamble isn't failing because the trades aren't valuable. They absolutely are. It's failing because we keep treating one category of careers or one category of education as a universal solution in an economy where there are no universal answers. I'll see you in the next one.