The College Decision Just Got Harder

In recent years, the decision for high school seniors to pursue a college education has become increasingly difficult. For decades, college graduates have made significantly more money than non-college graduates, with those holding a B.A. or B.S. earning 68% more annually. This has resulted in a substantial lifetime earnings difference of over $1.2 million for college graduates.

However, recent developments have complicated this equation. Tech leaders like Bill Gates and Sam Altman have expressed concerns that artificial intelligence will eradicate many office jobs. Data shows that the jobless rate for young college graduates has been rising for the past four years, with an underemployment rate of 42%. Additionally, demand for young blue-collar workers, such as pipe fitters and crane operators, has surged, with many making six-figure salaries.

For the first time, high school graduates are experiencing shorter jobless spells than those with college degrees. Receding college wage premiums, student loan debt, and the rise of for-profit colleges have eroded the financial benefits of a degree. Moreover, white-collar jobs are no longer as secure, as AI threatens to make thinking work obsolete. A recent study found that AI has resulted in a 10% drop in the wage premium over the past four years, bringing it back to the level seen in the 1990s.

Furthermore, computer science majors have faced a bust, while demand for shop-class specialists has boomed. Despite high interest rates, there has been a significant investment in data centers and construction, leading to a 216,000 job increase in the trades since 2020. As companies scramble to fill positions in the trades, high school seniors are faced with a challenging decision: should they pursue a costly college degree or train for a blue-collar career?