Want job security in this uncertain market? A surprising trend is paying off

Going to college in the United States has long been considered the ticket to a higher-paying job. But the growing share of high school graduates who are enrolling in vocational schools instead of four-year programs may not be missing out on as much earnings potential as you might think. From 2019 to 2024, hiring rates fell for workers in their 20s for roles that tend to require a bachelor’s degree, while hiring rates rose for roles requiring a vocational or associate’s degree, according to data from a national payroll processing company. And during that five-year span, enrollment in bachelor’s degree programs fell by 4%, while enrollment in vocational schools grew by 5%, according to data from a national student clearinghouse. ‘The promise of quicker entry into the workforce, lower educational costs, and the ability to earn higher wages earlier in their careers are compelling reasons for this trend,’ said a professor at a university who teaches curriculum development for career and technical education programs. That means that while the overall labor market shows signs of cooling, hiring for workers without a college education can still be a source of strength for the economy. Earnings growth rates for workers with vocational or associate’s degrees are on par with those of bachelor’s degree recipients, according to a wage growth tracker. That said, bachelor’s degree recipients earned a median weekly salary of $1,493 last year compared to the $1,058 associate’s degree recipients earned, according to data from the Bureau of Labor Statistics. The data for associate’s degree recipients includes people who graduated from academic and vocational programs. But some industries that skew toward workers without a degree even notch higher wage growth than industries that favor degree holders. For example, pay for construction workers rose by 4.3% on average over the 12 months ended in July; in the professional services industry, wages climbed by 3.9%. Part of the shift toward trade and vocational school enrollment stems from a reevaluation of blue-collar work that happened during the pandemic, said the professor, who is also the vice president of the trade and industrial education division at an association for career and technical education. ‘This has driven employers to offer more competitive wages and benefits to attract and retain workers.’ The practical, hands-on experience required for many blue-collar jobs couldn’t be taught virtually during the pandemic, he added. Now that many of those programs are operating normally again, more people are building trade skills to take jobs where there’s still a shortage of skilled labor, such as electricians, carpenters, and plumbers. Another factor behind the shift toward enrollment in vocational and trade schools is the advancement of artificial intelligence, said the director of people analytics research. Across all major working-age groups, Americans between the ages of 18 and 24 are the most concerned about AI replacing some or most of their existing jobs. This could help explain why the share of 20- to 24-year-olds working in blue-collar roles rose faster in recent years and remains higher compared to people 25 to 39. Generally, blue-collar roles, which require more manual labor, tend to be thought of as less vulnerable to being replaced by AI. ‘It’s unclear how the blue-collar workforce will hold up relative to the white-collar workforce should the overall labor market cool more significantly,’ said the professor. ‘However, a severe economic downturn could hamper the pace of wage growth and possibly lead to more job volatility.’