What the Economic Upturn Means for Trade Skills
Despite many false starts and disappointments, the economy looks like it might finally be growing in a way that benefits workers. After the Great Recession and years without strong growth in jobs or wages, that’s welcome news.
But the economic recovery will look different depending on where you live and the skills you have. Today we look at what the upturn means for people with trade skills, or people thinking about learning a trade.
1. Employment in general is improving
Let’s start with the good news: the picture for employment is getting better, no matter how you slice it. The number of job openings is at a 14-year high. Layoffs are down. December 2014 was the best month for hiring since the recession hit. The last three months saw the best stretch of hiring in the US since 1997. Put simply, it’s the best time to be looking for work in years.
2. There are more trades jobs, leading to skills shortages
In particular, job growth in areas requiring trade skills has been taking off. Last year alone the construction industry added 213,000 positions and manufacturing added 170,000. The Associated General Contractors of America says the construction industry is ready to hire again, with 80% of construction firms expecting to expand in 2015.
Yet employers are struggling to fill these positions, because of skills shortages. There just aren’t enough people with the trade skills needed to fill these positions.
The main reason is the recession, which hit the construction industry especially hard. To cut costs, employers stopped training new workers. Young people saw older construction workers losing jobs and stayed away from construction. And older workers retired. So now that construction is starting to pick up again, there aren’t enough people with trade skills.
And it’s not just construction: skills shortages are a big problem for the US economy in general.
The National Skills Coalition says that 54% of American jobs are middle-skill—requiring more than a high school education but less than a four-year college degree. However, only 44% of workers have middle skills. A Harvard Business Schools study found that “The market for middle-skills jobs … is consistently failing to clear.” In other words, employers can’t find all the people they need.
It’s likely that as the economy grows and these positions don’t get filled, wages will rise. And that means opportunities for those with education beyond the high school level.
3. May not be a wage recovery for workers without additional skills
Wages may not increase, however, for high school-educated workers in industries like manufacturing. In Detroit, the traditional home of the auto industry, the Detroit Free Press says it’s now normal for entry-level factory work to pay $10 per hour, where once the wage was $28 per hour.
The big automakers offer better pay and conditions, but other, smaller companies find it harder. “Manufacturing jobs are returning to the state and metro Detroit, but the wages must compete with rates paid overseas and in Latin America,” the Press says.
The lesson is that improving your skills—learning a trade or another skill beyond high school—is important. There will continue to be jobs you can do with a high school education, but it will get harder to find one that pays decently, even as the economy gets better. But if you have skills above a high school level, there will be real opportunities.
If you’re looking to improve your skills, be sure to check out our schools pages.