America’s next bubble, poised to burst and splatter across the country, is student loan debt – today close to $1 trillion.
Even worse, the government’s long campaign to steer so many kids into getting college credentials has resulted in massive degree inflation… to the point that such degrees have become functionally worthless. The dream of using college to sail into cushy white-collar jobs is now being exposed as a mirage.
For people in their twenties, many are finding that getting decent jobs is a matter of their families’ connections – or their parents willingness to let them continue living at home. Or both.
And the myth that people who work with their hands are losers is falling apart too. Especially as plumbers, electricians, and others with practical skills that people actually need (along with some hustle) are raking in more money than dentists and other white-collar occupations. For the first time in history, the number of college-educated jobless workers exceeds those with a high-school diploma or less, according to Labor Department data.
What a mess for families who took out second mortgages to brave government-created college cost inflation to get their kids college degrees that are, well, essentially worthless in terms of career success!
CNBC cited a Barclay’s report concluding that this debt is “becoming one of America’s structural challenges.” For instance, the balance of “federal student loans outstanding in the past decade ($583 billion) is larger than the size of the government’s TARP bailout package ($431 billion).”
A New Trend? Well-Paying Professional Careers
– No College Necessary
Currently, nearly one million job vacancies – and growing – are available. The pay: around $40,000 to $60,000 a year, close to $100,000 with overtime; and if you’re a go-getter, you could gross $300,000. At minimum, a high-school diploma or equivalent is all you need to get started. What are these jobs?
Back in 2009 Jim Rogers famously said, “…it’s the farmers who will have the Lamborghinis, not the brokers on Wall Street.” This hasn’t happened; not yet. But, Rogers was commenting on commodities, and how “physical stuff” is becoming more valuable to society and as investments.
These good-paying American jobs are factory jobs and truck driving jobs. Jobs that produce and transport real stuff.
Who Got the Better Deal?
A Trade School Grad or College Grad?
For some time I’ve been advising a number of younger Americans to ditch the idea of getting a college degree and embrace some form of trade school. People need mechanics, plumbers, electricians, and engineers. To qualify for today’s manufacturing jobs, one can get special training at a trade school for a fraction of the cost of most universities.
One article about the growing popularity of trade school programs compared a brother and sister.
The brother:
Attended a two-year accredited manufacturing program that included machining, CNC, and tool and die making.
Total cost: between $8,000 and $10,000.
Hired by an aerospace company for $45,000 base, plus overtime.
The Sister:
Attended a four-year university and studied teaching.
Total cost: much higher, with $45,000 debt.
Now works as a fifth grade teacher for $36,000.
The father of the two said, “My daughter is an awesome teacher. But who do you think got the better deal?”
Not the Stereotypical Dark, Dangerous,
and Dirty Factory Jobs Most People Imagine
Instead, today’s American manufacturing jobs require highly skilled professionals. They include welders, machinists, Computer Numerical Control (CNC) machine operators, and related craftsmen. These workers need to understand and use networked computers, read Computer Aided Drawings (CAD), handle 3-D software, and accurately calculate shop math and geometry.
America’s factories employ high-tech, precision machines, and independent thinking operators.
With overtime, and depending on experience and area of specialty, a factory worker could earn nearly $100,000. The biggest challenge for employers is finding skilled help.
Approximately 600,000 vacancies exist in American factories nationwide, according to a Manufacturing Institute and Deloitte report.
Energy companies the world over need geologists – another great field for a younger person to contemplate as an alternative to the oversupply of attorneys in this country.
Trucking has a similar challenge. According to the Truckload Carriers Association, as many as 200,000 long-haul trucker positions are open nationwide. The U.S. Bureau of Labor Statistics estimates the need for trained drivers will grow another 20% over the next seven years.
The median wage for a trucker is just under $40,000; the top 10% earn more than $58,000. And with a bit of an entrepreneurial spirit, one can become an independent truck driver (small-business owner) and gross around $300,000.
Is This a Temporary Fad, or a Long-Term Trend?
It’s a bit early to tell, but for over a decade we’ve outsourced factory and manufacturing jobs overseas; in the process we’ve lost the skills in the marketplace. (Not to mention older workers are retiring.)
With the government pushing everyone into getting college degrees, trade schools have lost demand, high schools ended vocational classes, and factories stopped apprenticeship programs.
According to MFG.com president Mitch Free, it can take at least a year to train someone with entry-level manufacturing skills, plus one or two years of apprenticeship at a factory.
It will take a while to build back the numbers of skilled workers. But this translates into stable job security for those in the business.
Truck driving has a quicker turnaround. Training for a commercial driver’s license takes about eight weeks.
Other longer-range factors:
The weakening dollar is raising foreign currency costs;
Rising wages overseas, such as in China (wages are growing at 15% – 20% a year, according to Boston Consulting Group) are reducing their “low-cost” advantage;
Rising fuel costs make it less practical to ship and transport materials great distances;
All these factors make it less friendly to manufacture overseas. Indeed, both MFG.com and MacRAE’s Bluebook (online industrial and manufacturing directories) have noticed an uptick in inquiries for U.S. manufactures over the last few months.
An internal survey conducted by MFG.com revealed 40% of its members experienced new orders that would have otherwise gone overseas.
In a CNBC report, “the Boston Consulting Group found more than one third of U.S.-based manufacturers with sales greater than $1 billion are planning or considering bringing production back to the United States from China.”
The market is changing. For one thing, technology is making it economical to quickly design a new product and have it manufactured in a matter of weeks, rather than months.
How Do You or Someone You Know Qualify For These Jobs?
You can find a program online by searching “trade school” and your city. Some other key words to search online are “welding,” “CNC,” and “machinist.”
A trade school certificate can take one to two years to complete, depending on the skills you want to acquire. Typical costs for the entire program run around $6,000-$10,000.
Truck driver school typically costs about $6,000.
If you or someone you know is looking for a new career, these positions provide good, honest work, making and delivering things people want and need. Think about this before taking out a second mortgage to create yet another unemployed college graduate!
Yours in Freedom and Prosperity,
Lee Bellinger, Publisher
Independent Living