For decades, high school guidance counselors gave the same advice to students: get a four-year degree and aim for a white-collar job.

The trades were treated as a fallback for those who couldn’t hack the college curriculum. That “wisdom” is now cracking under the weight of a white-collar recession and AI replacement.

The post-pandemic economy briefly lent credence the idea that knowledge workers reigned supreme.

Their advantage wouldn’t last long. Many companies aggressively hiring white-collar employees in 2022 have spent the last couple years cutting them just as fervently.

The specter of generative AI also looms large as potentially replacing certain white-collar jobs from coding to copywriting. The roles feeling it most acutely are entry-level positions.

A November 2025 working paper from Stanford’s Digital Economy Lab, “Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence,” found that early-career workers ages 22–25 in the most AI-exposed occupations have experienced a 16% decline in employment since the arrival of ChatGPT.

Meanwhile, employment for more experienced workers in the same occupations has grown. Entry-level white-collar work (the traditional on-ramp to a stable career) is the position AI is eliminating first.

The same doesn’t hold for the apprentice electrician who wired your office building. She still has employment because LLMs have yet to figure out how to pull a wire through a conduit.

The Stanford researchers found employment dips concentrated in occupations where AI more likely automates (rather than augments) human labor. It’s a distinction that, by definition, excludes work that requires a person to show up and fix something with their hands.

The result has been a reassessment of conventional wisdom about the trades. In an economy shaped by generative AI, plumbing looks like a more durable career bet than computer programming.

Of course, job security and wages aren’t the same thing. The strongest argument for the skilled trades is that the work can’t be automated away, not that these positions are commanding greater pay premiums compared to white-collar professions.

The skilled trades: a mixed picture for wages and salary growth

Recent media narratives often position skilled trades as both a good bet for career longevity and earning potential. Half of that story is true currently.

The median pay for those in skilled trades is $57,000 annually, below the overall median for full-time workers of $62,608, according to the Bureau of Labor Statistics (BLS).

When it comes to wage growth, the skilled trades are also a mixed bag. Payscale’s Salary Budget Survey found employers are doling 3.5% pay increases on average across industries.

Taken as a whole, the skilled trades saw 3.8% salary increases year over year. So, marginally higher than average.

But this figure obscures more than it reveals. Underneath the headline number sits a wide range of wage growth by role. A number of jobs in the skilled trades are growing at rates well below the average.

Plumber II grew at just 0.8%. Fire Alarm Technicians are at 0.4%. Mid-career Electricians are seeing growth of 1.2% and 1.6% respectively. For workers in these roles, wages are trailing inflation.

The only headline-grabbing number belongs to Refrigeration Technicians at 8.6% wage growth. Remove that outlier and wage growth for the trades looks very ordinary, if not a little disappointing.

In other words, the current wage picture reflects a labor market tightening slowly rather than one that has already broken open. That distinction matters because the forces driving shortages are real but haven’t fully arrived yet.

Make no mistake about it: labor shortages and higher wages are the future of the skilled trades

The case for wage acceleration in skilled trades in the coming years is legitimate, even if current data doesn’t fully bear it out yet. Labor demand will eventually outstrip supply by a lot more.

An estimated 30% of union electricians are expected to reach retirement age in the next decade, and 70% of supervisors in the electrical industry are Baby Boomers. The loss of experienced frontline leadership will become a headcount problem for employers.

We can’t flip a switch and simply replace these workers. It requires years of apprenticeships and on-the-job training to become HVAC Supervisor III.

McKinsey projects 26,000 net new employees in the skilled trades entering the workforce per year to fill 584,000 annual openings. You don’t need a fancy equation to see the math doesn’t work.

But despite an advantageous employment environment and a recent modest rebound in vocational training enrollment, McKinsey also found that the “dirty jobs” stigma persists.

Seventy-four percent of 18–20-year-olds preferred a college degree over vocational school, and 79% reported their parents wanted them to pursue a four-year college program.

The engrained bias against the trades means the cohort entering will be much smaller than those aging out. The compensation adjustment, when it comes, will be chasing a supply problem that’s been building for a generation.

Federal infrastructure investment under the Bipartisan Infrastructure Law, a $1.2 trillion public outlay, will peak in 2027 or 2028. This will expand demand for construction jobs by an additional 300,000+ jobs.

AI offers no relief from this supply problem. The diagnostic skill of an experienced technician or master electrician can’t be replaced with an algorithm. Miniature robots aren’t coming to fix your fridge or “wire” a solar farm. And, eventually, the market will price these scarce skillsets more aggressively.

Our data shows the market for skilled trades hasn't broken open yet. The window to get ahead of it is still open, but it won't stay that way. Compensation teams that wait for the shortage to arrive before building competitive total rewards offerings will find themselves competing for a shrinking pool of talent while projects sit on hold.

Welcome Payscale’s Peer Industry Network for Construction companies

According to Payscale’s 2026 Compensation Best Practices Report, construction companies face wage variability, labor shortages, and the consistent pressure of completing projects on time and on budget.

It’s only going to worsen over time. That’s why Payscale created the Construction Peer Industry Network for your firm. With over 9.7 million priced jobs across more than 3,720 organizations, Payscale Peer offers something different (and better) than salary surveys — continuously refreshed job data from construction companies in your location.

Payscale data spans every corner of the Construction and Homebuilding industries, so you’re never benchmarking against jobs that don’t reflect your specific workforce. Filter by location, industry segment, revenue, company size, job level, or date of hire to get the right number in pricing roles.

Our pay data includes the following job families:

• Construction

• Electrical Engineering

• Planning & Design

• Project Management

• Skilled Trades

• Supply Chain

With Peer for Construction and Homebuilding, you’re not under- or overpaying for roles in the Skilled Trades or elsewhere. You’re able to track wage movement and prepare for  impending labor shortages. In skilled trades, the future belongs to workers, and market pricing can change overnight.

Make sure your employees don’t walk off the site with the freshest salary benchmarks anywhere.