Episode Overview
GM’s CEO made headlines this week telling high school students to pick up a wrench instead of heading to college, and Pete and Peter agree with the broader point (the US is projected to face a shortage of over 2 million skilled trades workers by 2030), but they’re skeptical of the messenger. GM has laid off plenty of trades workers over the years, and the numbers complicate the pitch: the average mechanic salary is $44,890 a year, a certified mechanic averages $63,807, and a journeyman electrician averages around $63,626. Solid pay, but not the kind of money that easily supports a family the way it once did. Pete and Peter’s take: if the country needs more trades workers, trade pay and trade school access need to improve too, or people will keep choosing college. They also question how many of these jobs survive the next decade of automation, given robots are already building cars at scale at Tesla and Hyundai.
A Bureau of Labor Statistics report caught Pete and Peter’s attention this week: the cost of employee benefits (Social Security, Medicare, healthcare, and more) for private industry workers has climbed from under $10 an hour a decade ago to more than $17 an hour today. That’s a steep cost increase for employers, on top of already-rising wages, and Pete and Peter argue it’s one more incentive pushing companies toward automation over hiring.
There’s better news on the AI front. Indeed Hiring Labs found that wages for the most AI-exposed jobs (software engineering, IT, data and analytics, marketing, and banking and finance) have climbed 46% since 2021, with job postings in those fields growing too. Morgan Stanley found something similar: the most AI-exposed households are best positioned for wage growth. The catch, according to Indeed’s own data, is that openings are skewing toward more senior, experienced hires, making it harder for entry-level workers to break in.
The bigger, longer-running story: the share of US economic output going to workers has fallen to 52%, the lowest level ever recorded, down from a historical range closer to 60-66%. The decline started around 2000, stalled briefly after 2010, and has picked up speed again in recent years. Pete and Peter aren’t ready to blame AI alone, but they expect it to accelerate the trend.
They close with two hiring-process stories: Challenger, Gray & Christmas warns that AI is increasingly summarizing and rating recorded job interviews before a human ever reviews them (70% of employers already use AI somewhere in hiring, according to TestGorilla), and a Morning Brew report on companies asking candidates to complete unpaid work trials, in some cases for a full week. Pete and Peter’s advice: know your worth in the market, and don’t do unpaid work beyond an hour or two without getting paid for it.
Key Takeaways
- GM’s CEO tells students to skip college for the trades, but average trade wages tell a more complicated story
- A looming shortage of over 2 million skilled trades workers by 2030
- Employee benefit costs jump from under $10 to over $17 an hour in a decade
- AI-exposed jobs see wages climb 46% since 2021, but entry-level openings shrink
- Worker share of US economic output falls to a record-low 52%
- AI is increasingly screening and rating recorded job interviews
- Companies asking candidates to complete unpaid, sometimes week-long, work trials
34 minutes
