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Chapter 1: What are the main arguments for trades versus degrees?
We are back in your life, and today, trades versus degrees. What builds more wealth? For years, New Zealand has pushed, go to university, make your parents proud. But with student debt rising, AI changing the job market, and tradies in some industries earning those mega bucks, more people are starting to question, is a degree actually worth it?
Michael, today we break down the real numbers behind degrees, first trades, which careers are actually generating the best long-term incomes once you factor in university debt, how AI could reshape graduating jobs, and why the future of work may look different. Let's break it down, Michael. There's a lot to unpack, man.
There's a lot to unpack. Yeah, I mean... There's a lot there. Tradies get the ladies. So, like, I'd probably go for the trades.
Chapter 2: How does student debt influence the value of a degree?
Do tradies get the ladies? I don't know. I was a tradie for a while. Tell you what, man. Nothing hits at, like, 7 a.m. Pie in a V. Pie in a V is a good way to start the day.
Yeah, I don't know where that was going for a second day with the 7 a.m.
Pie in a V from a BP is a great way to start the day, man. Dance pies. Dance pies at the BP.
Don't ladies love a guy in a suit? Don't I? Don't wear them. I mean, so Mike, let's break it down a bit. The income gap isn't really what people think it is, is it?
Yeah, 100%, man. Like, you know, your degree holders, you know, they start on roughly $62,000. They're on kind of $95,000 after about nine years. This is all on average, by the way. Sparkies, electricians, they start on about $84,000. They're close to $100,000 by year nine. Plumbers, $79,000 at the start, roughly $94,000 by year nine. That's all kind of right at the start of your career though.
Basically, your degrees tend to earn more over the long term, right? So the question becomes like, is it better to have more at the start or more at the end?
The other question as well is what kind of degree are you doing? Yeah. I mean, doctors, engineers, makes a lot more sense. If you're doing a degree where you're trying to work it out as you go and decide you want to do something a little later, you might have racked up a lot of debt along the way.
I think university is like quite overplayed. I think like this kind of like channeling everyone to university education where most people don't really need it. Just get a YouTube account. Oh, it's not even a YouTube account. It's just like you probably don't need a degree to be in marketing. You don't really need a degree to be in banking. You don't need a degree to do a lot of business jobs.
You learn most of it on the job, right?
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Chapter 3: What are the starting salaries for trades compared to degrees?
And I'm not like singling out marketing or banking or anything like that. Just examples. But, you know, like... Do I use much of my finance and economics degree in my day-to-day job? No, not really. I'm not saying there aren't specialists who do, but yeah, I think it's a lot of debt for the economy and for individuals for maybe not that much gain.
Yeah. Um, The interesting thing, though, is the biggest gap is not what they're earning in the future. It's that 18 to 23-year timeframe.
While university students are accumulating debt, paying fees, and delaying income for years, and I know there will be those in the comment section that go, I've worked the whole way through university, just generally speaking, tradies, apprentices are earning immediately, building KiwiSaver balances, getting experiences, and potentially saving house deposits.
Yeah, they are. And they're also not starting negative 50 grand. Because once you come out of university, you're starting with a student loan for most people, right? So it takes a long time to pay that off. And it's quite a steep repayment period, as it should be. You should be paying it back quite quickly. But that can impact you buying houses.
That can, again, impact your KiwiSaver and everything as well. So yeah, man, it's... I don't know. There's definitely an argument for the apprenticeships.
I get it. And the other really interesting thing, which is why we're talking about this topic, is the world is changing. And there's no guarantee that waiting for you at the end, there's going to be that job. So figures released by Stats New Zealand in February showed that unemployment rates for 15 to 24-year-olds was at 16.5%, three times higher than the overall unemployment rate. Great.
Graduate job ads have also been declining in both New Zealand and Australia since 2023, but the decline has been much sharper in New Zealand as the labor market weakens, which is probably also tied to the economy.
That's no massive surprise, right? As the labor market weakens, you don't tend to hire new staff. A lot of those new staff are grads, so you probably just keep the existing staff you have. I think they're kind of... the major shift is around like what roles are grads going to be picking up as you get tech that moves in and kind of like basically fulfills a lot of those jobs.
Yeah.
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Chapter 4: How does AI impact future job opportunities for graduates?
What else am I going to do? I don't know. Everyone else is going to uni. I got four days. I got three days in and I was like, I don't want to be here, man.
so i went into detroit instead right um and that was really cool like i think it definitely now provides a different kind of skill set and attitude towards stuff it really helps you to build like pragmatic skills around like just straightforward problem solving um and it definitely teaches you like yeah just a different way of thinking also i can like build stuff which is quite cool
Yeah, I mean, you look at that deck that you built for me.
I was under pressure and I was moving to the UK the next day. Come on.
Yeah, that deck fell apart quickly. Also, we didn't use galvanized nails.
I bought a box of galvanized nails, man. I don't know what happened there.
They rusted through it immediately.
yeah i think you like university helps you with like critical thinking and show that you can stick something through but i also think there's like a big part of like an 18 year old showing like for the trades an 18 year old showing up to a work site and like pie in one hand v in the other hand probably not a dart anymore uh but like you know showing up early and getting it done yeah just reality check do some hard work yeah that's not a bad thing the other thing you do miss though is like
going away to uni, like if you're moving away from, like if you're moving from Auckland to Dunedin or something like that, it was like quite a cool life experience and it actually forces you to grow up quite quickly.
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Chapter 5: What are the immediate financial benefits of trades over degrees?
One thing we have tried to do in the past though, which we haven't quite got to
is like the career of a plumber this the career of a doctor obviously starting work earlier taking all the debt higher having having high income but catching back up if you want us to do that episode put plumber this doctor in the comments and we'll run the numbers we'll get mike in the room crunching it all out and then we will present that episode if you want us to please make sure to like review subscribe and we'll catch you next time cheers