One of the curious outcomes of this recent recession and slow recovery may be a rethinking of how Americans view their careers and go about training for them. While attending and graduating from a four-year college has long been billed as the golden ticket to a quality life, there are signs that this may be changing. Although some sort of post-high school training and skill development is very important, it may be the case that blue collar skilled trades should get a second look.

SEE: 10 Highest-Paying Blue-Collar Jobs

The College Problem
One of the major issues in education today is the growing cost of a four-year college education. Numerous articles and studies have explored how the cost of attending college has not only outstripped inflation, but lapped it many times over in recent decades. This is putting education further and further out of reach for more and more people without resorting to loans, and increasing the student loan debt burden to an almost unsustainable degree.

Now comes the second part of the college problem. As affordability is declining, so to is the utility of some degrees. Simply put, there just aren't enough jobs in the U.S. today that pay enough to legitimize borrowing $50,000, $100,000 or $250,000 to attain a bachelor's degree in English, history or education. Even apart from the poor employment prospects for over-supplied liberal arts degrees, there is the matter of how those who do get jobs manage to get by – many employed recent college graduates find that even with Spartan lifestyles (living with their parents, for instance), they are very nearly overwhelmed with repayment obligations for their student loans.

A Failed Premise?
In some respects, the advocacy for a collegiate education and white collar work harkens back to past bubbles in the financial markets. In the 1970s Michael Milken discovered that high-yield bonds (junk bonds) were undervalued relative to the actual experience of default. He made a fortune for himself and his employer from this discovery. As time went on, though, others noticed this and began getting involved in high-yield bonds. Soon, the supply was running thin and Wall Street went into action to create more supply – inducing companies to issue junk bonds to pursue dubious acquisitions and expansion plans.

This fundamentally altered the market, and the original discoveries and insights of Milken were no longer valid because the bonds and bond market were so different. Something very similar happened with subprime mortgages and the housing bubble – early participants noticed that there was real value there, but that value vanished as everybody else crowded into the market.

Perhaps the same thing is happening to higher education. There certainly was a time when a college degree was relatively rare, and only a privileged few could hope to pursue it. As time went on, though, the greater earnings potential of white collar work was identified as a good thing for the country, and large numbers of people were encouraged to pursue post-secondary education – perhaps too many. Now, the situation seems to be one where many people with four-year degrees have to settle for jobs where basic tasks and responsibilities simply don't require post-secondary education (or its attendant debt). (For more, check out Top 6 Jobs That Don't Require Degrees.)

The Blue Collar Case
One of the interesting aspects of the recent recession has been the unevenness of unemployment. There has definitely been high unemployment in service jobs and low-skill manufacturing jobs, but many industrial companies ((including Caterpillar (NYSE:CAT) and Boeing (NYSE:BA)) have complained that they cannot find enough skilled workers for their needs. In other words, there are shortages in skilled blue-collar trades like welding and machining.

It's not hard to see how this shortage has come about. Many high schools have dropped vocational education, altogether, in the quest to boost the reported number of graduates going on to four-year colleges. At the same time, blue collar work has been largely devalued and scorned in the culture with expressions like "work smart, not hard."

Supply and demand is working as it should, though. An increasing number of jobs that nominally require four-year degrees are paying wages that don't economically support the pursuit of those degrees, because there's such an over-supply of college-educated workers. On the other hand, pay for skilled vocational trades is in some cases 50% higher than these jobs, and doesn't require the same level of expensive schooling – welders have recently seen median pay climb above $50,000, with wages sometimes doubling that in certain circumstances (like the labor-starved markets in energy-rich areas like the Bakken and Marcellus).

The Bottom Line
There is no such thing as a career path that guarantees employment, as even PhDs in life sciences are seeing unemployment as a byproduct of government funding cuts. It may be case, though, that the argument for pursuing a four-year college degree has gone too far and reached a point where there are too many people pursuing degrees with low expected returns. While the best and brightest in any discipline will always find a way to make a living, there's simply a limit to how many undergraduates with degrees in political science, communications or biology the market can absorb.

This is not an argument for dropping out or de-prioritizing school. Rather, it's an argument that those who are inclined towards skilled vocational trades should not be mocked or belittled for it. America will always need welders, plumbers and electricians and those jobs cannot be outsourced. Better, then, to be a happy welder than an under-employed and dissatisfied cube-worker trying to pay off college loans in a job that really doesn't challenge or reward those skills honed in college.

In the supposed battle between blue collar and white collar, the only color that should really matter is where a particular person can find the most green for them. (To help you find the green, see 8 High Paying Jobs That Require 2-Year Degrees.)

Related Articles
  1. Professionals

    What Accounts for One-Third of the Wage Gap

    Women who work full time still make less than men who have the same qualifications. One third of the pay gap may be due to gender bias and discrimination.
  2. Taxes

    Payroll Taxes: Picking Apart Your Paycheck

    Here's what gets deducted from your pay, what your employer pays and where your payroll taxes actually end up.
  3. Professionals

    Career Advice: Investment Banking Vs. Law

    Learn some of the most important differences between a career in investment banking and law, and figure out which career suits you better.
  4. Personal Finance

    How Salary Experts Evaluate Stay-at-Home Moms

    Thinking about staying home with your little ones? Computing the replacement cost of your domestic duties can help you make a more informed decision.
  5. Professionals

    Career Advice: Accounting Vs. Law

    Identify the key differences between working in accounting and working in law. Understand which specific skills make you better-suited for each career.
  6. Professionals

    These College Majors Often Lead to Big Salaries

    The benefits of a college degree are substantial, especially if you pick (and stick with) one of the nation's highest-paying majors.
  7. Professionals

    Want to Be High-Earner? Avoid these College Majors

    Why these college majors might offer a poor chance of paying off those student loans sooner rather than later.
  8. Personal Finance

    How to Job Search While You're Still Employed

    The best time to look for a new job is when you already have one.
  9. Entrepreneurship

    Top 10 Side Jobs You Could Start Now

    Ways to make extra cash in your spare time.
  10. Retirement

    Why are 401(k) contributions limited?

    Find out why contributions to 401(k) retirement plans are limited, including what the current contribution limits are and how limits encourage participation.
  1. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>
  2. Do financial advisors need to meet quotas?

    Most financial advisors are required to meet quotas, particularly if they work for firms that pay base salaries or draws ... Read Full Answer >>
  3. What is the difference between AGI (adjusted gross income) and gross income?

    In the United States, individuals pay taxes based on their adjusted gross income, or AGI, rather than their gross income. ... Read Full Answer >>
  4. How is marginal propensity to save calculated?

    Marginal propensity to save is used in Keynesian macroeconomics to quantify the relationship between changes in income and ... Read Full Answer >>
  5. How can minimum wages contribute to a market failure?

    The minimum wage acts like a price floor on labor, reducing the supply of jobs available to a level below the market-clearing ... Read Full Answer >>
  6. How does the always be closing (ABC) strategy benefit a salesperson's sales funnel?

    It is good practice in sales to always be closing, because it's common for a salesperson's sales funnel to be leaky. When ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  2. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  3. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  4. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  5. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  6. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!