Ford CEO Jim Farley gathered a host of experts this week to discuss what he calls “the essential economy,” the blue-collar backbone that he sees mired in crisis. money/news/at-t-ceo-john-stankey-on-impact-of-ai-new-iphone-demand-and-future-of-connectivity/vi-AA1NAQ62″ target=”_blank” rel=”noopener” aria-label=”Go to https://www.msn.com/en-us/money/news/at-t-ceo-john-stankey-on-impact-of-ai-new-iphone-demand-and-future-of-connectivity/vi-AA1NAQ62″ class=”sc-5ad7098d-0 lcJVdL”>AT&T CEO John Stankey and FedEx CEO Raj Subramaniam talked about how AI is impacting manufacturing and how they’re hustling to stay ahead of the curve; Michigan Gov. Gretchen Whitmer issued a sober warning about how China could “dominate” if we’re not careful with our auto industry; and even JPMorgan CEO Jamie Dimon appeared via video to urge America not to become a “nation of compliance and box-checking.”
But during the keynote discussion with Labor Secretary Lori Chavez-DeRemer and Mike Rowe of the Mike Rowe Works Foundation, Farley revealed how his own family is being impacted. “My son worked as a mechanic this summer,” Farley said while moderating.
Then, Farley added, his son said something that stunned both of his parents: “Dad, I really like this work. I don’t know why I need to go to college.” Farley said he and his wife looked at each other and wondered, “Should we be debating this?” It’s something that’s happening in a lot of American households, he noted. “It should be a debate.”
Math isn’t mathing
Rowe, a longtime vocational advocate, seized on data showing that while two skilled tradespeople enter the workforce, five retire each year. The imbalance, he explained, is “the math that’s catching up to us” as the baby boomer generation ages and birth rates fall.
Rowe cited data from his own life. His own degree cost $12,200 in 1984, he said, whereas today it would cost something like $97,000.
“Nothing in the history of Western civilization has gotten more expensive, more quickly,” Rowe said. “Not energy, not food, not real estate, not even health care, [nothing has been inflated more] than the cost of a four-year degree.”
The Associated Press reported that, yes, many colleges were charging roughly $95,000 per year as of April 2024, but the financial aid system lowers that in practice. Still, it’s by and large true that inflation for college tuition, health care, and housing costs has far outpaced that for, say, televisions, toys, and software, showing Rowe is making a solid point. With costs this high, the value proposition of college is under serious scrutiny.
Fortune has reported on several Gen Z entrepreneurs who dove straight into the trades instead of going to college. One, at 23, was already his own boss and making more than $100,000 per year, and the other, 19, was working his way up to it. Both of them had side hustles as social-media influencers, adding another revenue stream. Marlo Loria, director of career and technical education and innovative partnerships at Mesa Public Schools in Arizona, said she often gives options to students that are different from a traditional four-year degree.
“Our youth want to know why. Why do I need to go to college? Why do I want to get in debt? Why do I want to do these things?” She said that “because I told you so” doesn’t cut it anymore.
A path back to the American Dream?
Labor Secretary Chavez-DeRemer echoed this sentiment, saying government, educators, and industry must partner to make the skilled trades attractive to young Americans.
“For far too long, we haven’t brought the right people to the table,” she said, emphasizing the need for collaboration so that “businesses are heard, and the American workforce is valued.”
Chavez-DeRemer argued that if the average American wants to have a good-paying job and a mortgage, they should strongly consider the trades.
She questioned: “Do you know that most of our 35- and 40-year-olds are not going to be able to buy a home anywhere near the future?”
This is the time in people’s lives when they’re trying to grow their families, and the current U.S. economy does not set them up to do that, she said. She noted that trade school graduates often emerge earning more than $100,000 per year. The average tradesman will come out making about $11,000 more than a college graduate will, she said.
The essential obstacle, said Rowe, is not just economics but stigma.
“Stigmas and stereotypes and myths and misperceptions have conspired to keep a whole generation of kids from giving trades an honest look,” he said. Until the culture changes and people recognize the dignity and opportunity of these jobs, attempts to fill workforce gaps will be “quixotic or Sisyphean.”
The AI question
Asked about the fear AI and robotics might replace human workers, both panelists were optimistic. Chavez-DeRemer compared the transition to prior industrial and tech revolutions, stating: “We adapt. We are an adaptable people.” She emphasized AI should be seen as a tool that empowers, not replaces, the essential workforce.
“Businesses are retraining their employees,” she said. “The R&D is showing us that [they’re] going to create new types of jobs.”
Rowe added, “AI is coming for the coders, not yet for the welders,” reflecting the resiliency and growing demand in the trades. He argued every “frontline” vocation, from welding to pipe-fitting, is now seeing a boom, and AI won’t touch that. Rowe also cited remarks covered by Fortune from Nvidia CEO Jensen Huang about the need for blue-collar workers to power the data-center infrastructure underlying the AI boom. He also mentioned BlackRock CEO Larry Fink’s comments that his $12 trillion–plus portfolio was dependent on having enough electricians, a sector short of hundreds of thousands of workers.
“The biggest CEOs in our country [are ringing] the metaphorical alarm bell,” Rowe said, calling it a “macro problem” the essential economy can solve.
