Shortages of Skilled Trade Workers Providing Great Opportunities | with Mischa Fisher – Chief Economist at Angi.com

Shortages of Skilled Trade Workers Providing Great Opportunities | with Mischa Fisher – Chief Economist at Angi.com

Video of this Episode

On the Road?
Listen to AUDIO ONLY
version of the Podcast

Follow the Process Chiller Pro podcast on these platforms.

Listening on your phone or mobile device? These great podcast platforms may require apps to be installed to access the podcast on your mobile devices. 

Get an email alert when new episodes are posted.

Show notes

Today I get to sit down with Mischa Fisher, Chief Economist at Angi.com

 Mischa has some amazing insights on what is going on within the Skilled Trades industry. We cover subjects that you will rarely hear in the mainstream news in this episode. 

 A highly recommended article, an excellent read if you want to know trending in USA skilled trades. CLICK HERE:> https://bit.ly/3JkAPCA

Video (and audio only) versions are available at these sites:

ProcessAcademy.com à  https://bit.ly/3i0TkAj

SkilledTradeRescue.com à https://bit.ly/3w23dWA

This episode is also distributed on most podcast networks such as Spotify and Apple Podcast.

Make sure to sign up for our “JOIN THE MOVEMENT” email list to get notifications on new podcast episodes and access free workshops coming soon. 

https://skilledtraderescue.com/

Episode That Support This Topic.

Episode Transcript

So today I’m sitting down with Mischa Fisher, and he is an economist with Angie. And I found out about Misha through an article that he wrote back in 2021. And I thought it was just fascinating primarily because you don’t hear about this type of data for whatever reason. And I thought this was really well thought out. I discussed this data that Misha wrote about with some of my HVAC refrigeration industry insiders. And they were actually shocked, they knew that this stuff was going on as far as shortages and trades and things like that. But it was very helpful for them to see this article that makes you put out there. So welcome, Misha. I really appreciate it. I’m super excited to have you on the show today.

Thanks, Martin. Likewise, thanks for having me on. And looking forward to the conversation. The reason we put this research out there, so it’s useful to people. So that’s the best, the best feeling in the world is making sure that it’s not just going somewhere and nobody’s reading it.

Yeah, absolutely. So let’s, let’s get into your background real quick. So you’re an economist, you work with Angie, give give the folks out there a little bit of background on you know, your background and how this your interests go with respect to spilt skilled trades. And, you know, kind of the backstory on this article. What’s, what’s your history?

Sure, yeah, the role of economist is a pretty unique one, you don’t encounter it a lot in the trades. And I like to sort of jokingly say, that’s because the trades is very focused on useful tangible things. And economists don’t have the best reputation on that front. But my role is to hopefully try and be as useful to the industry as possible. As Chief Economist at Angie, mostly, what I do is I look at what’s going on in the market. I also work on some internal statistical things for the company on a sort of an ad hoc basis. But mostly, my job is to make sure that the company is contributing to the marketplace of ideas, and that we’re helping the industry grow and thrive with as much information as possible. And the way we tackle that is basically taking the market and putting it into four different pieces, we look at what’s going on with consumers and their spending and their priorities. We look at what’s going on with pricing on jobs and materials, we look at what the overall market is doing in terms of its size and growth rate. And then we of course, look at pros, because pros is how all of those other things happen. The way I came to Angie, I actually had a very similar role for this, I was the chief economist for the state of Illinois, looking specifically at labor force training, workforce incentives, housing policy, and overall economic growth. And the background for economist is typically one that is pretty heavy on applied stats, and then also thinking through a lot of public policy levers. And if you go back to the early era of the field, it was political economy. So we didn’t actually separate out the policy and the political process from economics. Now they’re kind of two distinct fields. But they are still closely related, because public policy is in the end of choice, which is where politics comes in. And some of the reason we’re in our current situation is we’ve made choices that have under stressed the importance of the trades and training people to get them into it. So there’s obviously that role as well. The overall breakdown of how economists think about things really falls into two buckets. There’s, I think, the biggest bucket and the least controversial, which is just what’s happening. And that comes down to really understanding what the top lines are in movement of economy. So if you want to look at HVAC, a really simple one is how many people are performing HVAC work. That’s not really a number that anybody truly knows. But economists will try and estimate it and come up with it. If you want to think about what what are being people being paid to do HVAC work? Well, then you’ve got a similar sort of question. Nobody really knows. If you’re an accountant at a big HVAC company, you can know what you roughly pay your own people, but you don’t have perfect information of what your competitors are doing or what people are doing in different parts of the country. And then there’s the second piece of what economists think about which is why is something happening. So there’s the first is the what is happening. And that’s a little bit more straightforward. It really is just measurement. And then the second part, the why, or what causes something is where you get into trickier areas, areas of inference and thinking about problems. Mm hmm.

Wow, that’s fascinating. Yeah, one of the things that I want to delve into in this interview as we get further along here is why the impression, if you will, of skilled trades in America, especially his, you know, skilled trades are basically the consolation prize, you know, the there’s an attitude out there amongst the general public that you know, Fallout spell fails. And you know, your college situation didn’t turn out as you plan. You know, you can always become a plumber, or an HVAC guy, you know, it’s it’s sort of a kind of a, you know, afterthought that, you know, a skilled trade is actually something that could be, you know, career venue for you. I want to talk about some of the key takeaways. So I’m I’m on screen here, you guys are listening audio only and your trucks out there. I’m going to put a link to Misha, his article of this 2021 skills trip skilled trades in America article that he put out on Angie, and I’m going to happen, I’m going to post that link to it, so you can check it out. But what am on this page for this thing, and it talks about the top line takeaways. And these are the ones about interest in skilled trades that really, really got hit me in the forehead, it says your number one job satisfaction remaining remains remarkably high with 83% of the trades people, either somewhat or extremely satisfied in their choice of work. That’s huge. I mean, that’s a significant number.

That’s really huge. And it’s something that people don’t market enough about the trades. And that’s why we really wanted to focus on that report we put out last year about this is a real opportunity, because there’s a lot of people who are quitting jobs and changing jobs because they’re dissatisfied. And the most unique thing about that stat isn’t just that it’s so high. But if you dig into the primary reason why people are listing their satisfaction, because people might say that they’re very dissatisfied. And we asked them to what’s the primary reason that we ask people who are neutral? What’s the primary reason for your answer, but the primary reason for people who are extremely satisfied, the top reason why they say this is what’s driving it is that they find meaning and value in their work. And that is something that everybody is searching for right now, we’ve gotten comfortable enough with economic growth, where there’s less motivation for a lot of younger generations, in particular, to strictly pursue salaries. And they also really want to know that at the end of the day, their work means something and then it improves somebody else’s life. And if you’re thinking about HVAC work, there’s no ambiguity about what you did today. Right? You know, that a family or an apartment complex will workers are now all of a sudden, much more comfortable tomorrow, because you fixed or installed a really good system, and you did your work well. And that’s harder to tell if you’re doing other things where you spend all day in a cubicle, sending emails to people, or now people, you know, spend their time at home in their pajamas, sending emails to people, but either way, the impact of your work is hidden from you, you don’t necessarily know that what you’re doing, actually has much meaning and value, whereas with the trades, no matter what it is, you really, really see it on an immediate and recurring basis.

Yeah, absolutely. The other one, that number five, that really, you know, got my attention, which this is one of those ones, everybody kind of knows it, but we’ve never really seen it in writing. Often. It says here, the skilled trades are aging with median age, in skilled trades, is 43 years. It’s roughly 10% older than the general population. So this has shown an interesting trend line here, right? I mean, you had a trip people, people leaving, and not coming in, which is causing a reduction in the population of people actually willing to perform skilled trade work, right?

Yeah, it’s doing a couple of things. So obviously, there’s that impact, there’s just fewer people who are around to train new entrants. But it also because people are entering in a later age as well, that’s one big shift we’ve seen is in that same report, we highlight the fact that current workers, the most common age they entered was between 16 and 20. But the age where they see other people entering the most common age is closer to 30. And that’s because people go to college, and then they find a career that they don’t love. And then they move into a secondary career that they realize they enjoy more. And what that does is it reduces the total amount of lifetime work that you can do. Because there’s there’s X amount of consumer demand out there, right, consumers want to spend so much money, and there’s so much demand for services, and you’ve got so much work you can do in a lifetime. And so if we take that lifetime of work, and we shorten it by 12 years, then you’re actually reducing the overall capacity of the trades, and you need more people to enter to make up for that. So there’s a couple of things going on. But that also feeds into a secondary consequence, which is that if you look at certain categories, particularly among business owners, and among general contractors, they’re even older than that average, that average of 43 to 44 is brought down by the fact that there’s lots of young roofers and framers out there, but on some of these other trades, because the age is older, those people are starting to think about retirement. Right. And that’s a big entrepreneurial opportunity for anybody who wants to get in now, or has already been in for a couple of years. Spend that 10 years really learning the business and then all of a sudden you’ve got a competitive landscape that’s improving as that big glut of people start to retire or to think about what they want to go on to afterwards. Maybe they want to sell their business or maybe they just exit entirely. That’s sort of remains to be seen. And it’ll be vary by market, but it’s a big entrepreneurial opportunity.

Wow, I never thought of it like that. Yeah, that’s that makes a lot of sense. Yeah, I mean, the general public has to know that. I mean, maybe right now, because, you know, we’re coming out of COVID. And, you know, everybody sort of the reporting is that their supply chain issues, and you know, that type of thing. I got a feeling though the supply chain things as they get worked out. In other words, we’re able to get products, there’s still going to be a shortage on the services side. So even though you can get the parts you need to fix air conditioners, or fix a plumbing system, and even the prices may come down on those materials a little bit, there’s still going to be probably a big hangover of the fact that I think there’s a good amount of people in the trades that said, you know, I met retirement age, I think I’m gonna retire. I actually know a lot of contractors that have had journeyman level technicians leave, because they just, you know, didn’t want to, they’re at a point they made enough money in their career, they just wanted to retire. They’re not coming back. And the general public right now, if they want to get their air conditioner fixed, or the washer, or you know, replaced or something like that, it kind of No, now, it’s going to be a long wait. But I got a feeling a feeling that even though they’ll be able to get their refrigerators now, and they’ll be able to get their new heat pump equipment, they still may find that you got to wait a couple months, because the contractors that are going to do the installation, they may have the access to the equipment, but they don’t have the people to put it in.

Mm hmm. Yeah, that’s definitely going on. I think consumers are a little bit wiser to it. But it’s not something we should be okay with, right? I mean, that’s not the story of how economics is supposed to work. You don’t go out there wanting to buy a new phone, and you know, have the electronic store sell you? Well, you know, we think you can get you one in six to eight months. That’s not you want to go in and get it markets are supposed to clear as in economics terms, which means that supply and demand equalized based on price. And I think a couple of things are going on. One is that people are reticent to expand. And you know, that’s obviously I think a lot of people still have a memory of the last recession when housing and the specialty residential trades in particular got really hit hard by that. So there’s probably some lingering memory. But that was a very unique recession. And I don’t see any reason why that needs to happen again, surely no fundamentals reason why should happen again. And then the other thing that’s going on is there’s a cultural thing in the trades where people are hesitant to raise prices, right? I mean, that’s the way normal markets work is if you know, the, the price of your phone is the price that the company thinks it can charge and still clear, the you know, and still make a baseline number of sales. But in the trades, rather than sort of raising prices until you have a standard backlog, people just sort of stopped taking new clients for a while. And that’s a unique thing. And some of its tied, obviously, into the nature of the work, it’s harder to ramp it up and ramp it down in the same way a factory can. But certainly I think that there is kind of a cultural component that goes in there to where because it’s a very personal face to face business. People don’t always feel comfortable doing that. And I’m not sure that that’s always the right approach. I think sometimes the industry needs to sort of think a little bit more carefully about whether or not it needs to raise prices in certain cases to actually get closer to that market clearing mechanism where the supply and demand actually equalize over a shorter window of time because very few other industries that you can look at and see people saying no, I’m sorry, I’m just not taking clients.

Yeah. So when you were doing your research for this 2021 article, what was your anything is this the first time you’ve done an article of this type? For Angie,

it’s the second year we did the skilled trades in America, which is our sort of specific research piece looking at what’s going on in the skilled trades. The first year, we looked at the entrepreneurial opportunity that was sort of pre COVID, where we looked at the cultural phenomenon that we tend to view an entrepreneur right now as somebody in a hoodie with some clean sneakers sitting in a coffee shop with a laptop, right? That’s kind of the story we’ve told ourselves of an entrepreneur. But that’s a very limited story. The entrepreneur is also somebody out there with a truck who’s running a business and scaling and growing it that requires putting more capital at risk, just as much innovation and hard work and hustle and salesmanship. So it requires all those same things. We just haven’t told that story. And so we tried to sort of really focus on that element with that report, the following year that the updated version, which is what we’re looking at right now, we tried to focus on this career satisfaction point because so many people right now are quitting their jobs. That’s a very topical point to make because a lot of people enter these trades. I grew up in rural British Columbia. My father worked for the power company as a company as a lineman. A lot of the people that he saw coming into the apprentice and journeyman programs for the power company to be linemen, all had gone to college all had done other things and all realize that they would make considerably more money and have a considerably happier time working being alignment than they would have in their white collar job. And so that’s one of the things We’re trying to really highlight.

Yeah. Now, was there anything that surprised you when you wrote this 2021 article like, wow, that’s interesting. I mean, you’re used to looking at a lot of data, I’m sure. But was there anything that when you were working up the the data for this article that like, wow, I had no idea. Was there anything, any aha moments like that in there?

I think the biggest aha moment for me is the recruitment piece. Because I think and it’s also, you know, it’s an area where I’m going to be a little bit critical of how we’ve expanded the pipeline, I would have thought that people would be thinking more about how we can pull more people in engaging more with their local school boards, their local elected officials, and that doesn’t happen. And I understand why it doesn’t, it’s not immediately relevant to your business. So it is a complete sunk cost. If you decide to take the time to go talk to your local school board about trying to create trades programs, or talk to your local elected officials about the incentives we’ve sent out, we set up to send kids to college instead of sending them into the trades. And on both of those things, people just in the trades are not active enough. And we really have to think about that that pipeline and how we pull people in because we need to be doing a better job, everybody. And I think, you know, if you’re listening right now, and you haven’t done that, that’s the beautiful thing about our system is you have that freedom to go and engage. Just because somebody doesn’t take your meeting the first time doesn’t mean you can’t be persistent. Get that meeting with your local state. Rep. Your local state senator, your congressman, your US senator, your governor, your county board members, whoever, make that effort, teamed up with some friends who have at some competitive companies and do the same thing. See if you can get a group of people together to just be engaged more in the process to make sure that the trades have a seat at the table when it comes to that policymaking and how we encourage young people to get into the trades.

Man, I could not have said that better myself. I got a tear running down my cheek right now. That is great. Yeah, that’s exactly where I think things need to be. I mean, what’s really interesting when I started out in, you know, when I was in high school, you know, I was in my automotive class, you know, back in the day when they taught, you know, wood shop, metal shop, automotive and, and woodshop. What, yeah, all the shop classes. And it seems like surely after I graduated, which was a long time ago, they did away with those. And in my story, I was a, you know, HIGH SCHOOL SENIOR with dyslexia, and I got through high school, I graduated, but I really struggled. So I knew I was not really destined, at least initially to go through college, I ended up doing it in reverse. But we had a rep come in from a trade school out in Arizona, and he was pitching auto diesel. And by the way, we have this other course called HVAC, right? And I’m like, oh, that sounds interesting. Hey, guys, quick announcement, if you have not stopped into our website, at skill, trade rescue calm, please do that. On the homepage. Here, you will see that we have the Join the movement email list. If you haven’t signed up, please consider doing that we have some amazing guests lined up for the podcast, I’m going to be getting the stories out of successful technicians and business owners in skilled trades. These are not just HVAC people there’s going to people be from across the skilled trade spectrum. And my hope is that I’m going to be able to draw out of these people the things that have worked in their careers amazingly well. And the things that if they had a chance to talk to their younger self, what they would tell them not to do. So I want to share all that stuff with you. And if you sign up, you’re going to be the first to know when we drop those new podcast episodes. Also coming soon we have the BST workshop, it’s a five day automated email workshop. However, you’re going to give content to us through that workshop, you’re going to get one on one feedback from our structures, instructors, and we’re looking to better your career. I’ve been teaching the BST process for many, many years, about two decades one on one. And I’m going to be trying to do that to the masses through this workshop. It’s totally free. All you got to do sign up. As soon as you do that, you’ll get alerts on your email, as soon as these new podcasts come in, as well as the BST workshop. So if you check it out, I will put a link to the website on the show notes for this episode today. So check it out. It just seems in the public school system these days. There’s just no you know, the people making decisions on the budgets for what curriculum they’re going to teach in schools. Shop is, you know, an afterthought. They just don’t they don’t do it as much anymore here.

Mm hmm. And that’s the way that economists tend to view the world is if you want to see what’s happening and understand it, you are getting the product of the incentives that are out there. So right now the thing we’re getting is a product of the incentives we’ve set in place. So if you don’t like what you’re seeing, you need to change the incentives. And right now people are incentivized to take take that that is very cheap up front and going down. to college degree without a lot of guidance over what the payoff is, or how much the job satisfaction is, or are there real jobs in the back end that you can actually jump into. And we need to change those incentives. So that’s, that’s a big part of it. And the other thing is to recognize that we’ve culturally placed I think, a lot of attention on on other forms of happiness that don’t necessarily have the same holding power as building something yourself. And the best analogy I have is, I like to build furniture on the weekends. So you know, I’ve got a decent number of tools in the garage shop, and I’ve got friends with bigger spaces that we, that we use to build larger things. And that’s a really fun way to spend evening and weekend time. I don’t know a lot of furniture builders, who spend a weekend sitting in front of computers, building applied stats models, because one is fundamentally more fun than the other. And as much as I enjoy what I do, I enjoy the woodworking more. And the, the story that we should tell people is, you know, if if you want to be happy, building things is a really meaningful way to do it. And the best way to tell that story is to have people actually do that in high school or in elementary school or, or in middle school. And to get that focus on it. Because I grew up in a rural area, I was on a farm. And so we had some of those farm activities. And then we also, of course, did have shop classes when I was in high school, but I think that was pretty rare.

Now you mentioned about, you know, the contractor community or people, you know, people who have who have interest in skilled trades, whoever those people are getting out and talking to school boards and talking to people that educate our youth. What other ideas if you if you spend any time thinking about alright, you know, how do we change the the mindset that I mentioned early on in this interview about, you know, skilled trades are just the, you know, the consolation prize, if you will, for a career. I mean, is there any other ideas maybe, you know, other economist yourself have pondered about on, on, you know, what the public or what interested people could do to sort of start to change that. That perception. I know, Mike Rose trying to do that the Dirty Jobs guy he’s been on, he’s talking about that a lot. But is there any other ideas that, you know, people who want to who want to be cheerleaders for skilled trades can try doing and making making a change in the attitude?

There’s a couple of different things. You’re right, Mike Rowe has been doing a great job of getting that message out there. And in part, just telling the story of the upper limit of what you can earn is a lot. So there’s, there’s that component of it too, certainly, I think telling the job satisfaction piece is important. But some people even if in the end, what will make them happiest job satisfaction, they might be motivated by money up front. And so obviously tell the story of the fact that people can make great money in in these fields, and you don’t have to get a bunch of college debt while you do it. And you don’t have to miss time out of the workforce while you do it. So there’s there’s that component of it too. The other thing that we need to do is recognize that we’re not pulling in a broad enough swath of the economy. Because a lot of the recruitment into the trades relies on word of mouth, that’s something else we’ve seen is that that’s still the number one thing people use. But when you’ve got a demographic that is aging, and you’re trying to pull in young people, word of mouth isn’t going to do a very good job. The other issue that we have is half the population is women, and about one in 20 to one and 25 tradespeople as women. When we look at the women in the trades, the job satisfaction is just as high as the men, the pay bump relative to other sectors is just as high. So it doesn’t make a lot of sense. And I think the big thing is we just have to create a more intentional pathway, because people don’t really think of it as an option. But there are lots of women tradespeople out there that are telling the story of the fact that they pursued it as a career. And it’s great, and they enjoy it. So there’s definitely more of that, that we should do as well, because it’s harder to be taken seriously, when you say you’ve got to trade labor shortage, and then 50% of the population basically doesn’t even exist in the workforce. So that’s, that’s one piece that we can change. And the other thing that I think we can we can change about it, too, is the social media component. I like to pick on social media a lot, because there’s sort of growing evidence that doesn’t make people super happy consuming it. But one of the silver linings of social media is that there’s lots of people on Facebook and Instagram and Tiktok, and Twitter and all these other sorts of things that are really telling the story of the trades in a pretty cool way. Right? And so that’s kind of an organic from the ground up movement. And I think it’s working pretty well, I think you’ve got a lot of influencers, who’s got hundreds of 1000s if not millions of followers on these various platforms, and are showing themselves building things and renovating things and installing things and going through the technical aspects of what’s involved to nail the install on an H vac system and all the different things you’ve got to think about in terms of air pressure, and how you’re controlling your water vapor and your your your air barriers and all those sorts of things. And that’s that’s pretty cool. I think that’s kind of already happening. I don’t think that that’s really a policy lever. That’s just You know, I keep it up for kind of moment.

You’re right, there are some really good influencers out there, particularly, you know, like on YouTube and LinkedIn that are just doing some amazing things, they’re there, I think if, let’s say, a couple more percentage of the technicians out there, we’re going to take a little bit of time and just post their personal experience in skilled trades, I think that would slowly turn the ship, you know, there’s just not enough voices out there yet on social media saying, hey, you know, skilled trades are actually something that would be something you should really take a close look at. So I put up on the screen here, another graphic, I wanted to get your input on, I came across this one, the data, it’s real hard to see at the bottom. But the data from this came from NCS E. Ed. Gov, I don’t know what that is. And then our friends at BLS Bureau of Labor Statistics. And I thought this was really interesting, because it gave sort of the pathway between trade schools versus traditional college. Now, one of the things I have, I have a feeling this was slanted kind of towards skilled trades, because the college experience, you know, there’s there’s many pathways, you know, you could do a JC you know, for two years, and then jump over and finish out at a regular, you know, a four year college so that there’s a lot of variables probably on both sides of this. But the couple of things on this, this graphic, and by the way, I’ll put a link to this on the on the show notes, is the skilled trade is going to be significantly faster. So a lot of people don’t realize, going to, you know, once you graduate from high school, you can actually get to work and start making money. They say two years versus four years. And then the cost this graphic, you know, shows the call average cost for trade schools 33,000, compared to 127,000. And then the big one that really got my attention was the graduation rate for people that choose to go to trade school is 98.4% versus the one I didn’t even know I blew my mind, only 60% of the people that go to college actually graduate. what’s your what’s your impression of the data presented on this graphic here? Is it Do you think it’s halfway accurate?

I think there’s some accuracy in that for sure. I think that the challenge with understanding this data is twofold. The first is variability, if you’re thinking about the college experience when we’re lumping it into one and even I’ve done that on this on this conversation, but the college conversation is highly variable. And certain majors at certain schools are a great deal if you can get into those programs and get through them at a remarkable deal. Now, whether or not you’ll like the work on the other side is a separate story. I know lots of friends that have gotten into very exclusive programs, and then have gone to the exclusive jobs afterwards. And then they put those jobs the second all their debt was paid off because they hated those jobs, even though they were very, very lucrative. So there’s that story. But the other piece that’s that’s going on is, well, how much of that is telling the story of the trades accurately? I think that we get trades wages wrong, I don’t think that the government measures that entirely accurately, I think it understates how much people earn on the trades for a number of reasons. I think some of that’s probably because there’s a certain cash component that’s under the table. I don’t think that’s necessarily a good thing from a measurement perspective. But I think it’s important to recognize that that probably does happen. The other thing is that people choose to work fewer hours, and they choose to live in lower cost areas. So that’s another big piece with the trades is if you go into law school and you get a big law firm, you have got to live in the downtown of an expensive city to maintain that lifestyle. Whereas in the trades, you can kind of choose wherever you want, and then drive into your new jobs on your own schedule. And if you want to take the winter months off to go fishing in Tahiti, that’s your call. And you know, I know people that do that. So there’s, there’s that component of as well, I do think it is very important to recognize that the tuition and the upfront cost is lower, the dropout rate is also typically lower, it sort of again, depends on the colleges and the majors. But if you go to college for three or four, you know, three, three years, then you drop out, you could have a lot of debt, and then you don’t get that premium because the premium comes from graduating it doesn’t it’s not a linear time thing where you get 25% of the benefit from college every year, you’ve got to complete the whole thing or you don’t really get much benefit at all. So if you drop out in the third year, and you’ve racked up three years of debt, you’re in a much worse place than if you had not gone to begin with and with the trades. That’s not necessarily the case. And then you also with the trades don’t have what economists call an opportunity cost. And that is not necessarily your monetary cost of doing something but it’s what was the cost of not doing something else. So if you would have been out there in the field, hustling and making 60 grand a year as a as a 18 year old for four years, well, that’s gross 240k in earnings, that’s all gone if you’re spending those same four years not earning a penny. So there’s an opportunity cost that also has to be factored in. So if you look at a lot of majors, and you say, Okay, what’s the total cost of that? And then what are the lifetime earnings, and you stack that up against starting four years earlier? So you skip that opportunity cost? You don’t pay all the tuition out of pocket, and you pick a good trade in a good area? Yeah, you’re definitely coming ahead with a lot of trades over a lot of college majors. That’s not universally true, right? There’s a superstar effect. Some majors can be very, very lucrative. And if you do go work for that big law firm or that big technology company, you can make great money and maybe do better than the average trades person, but not everybody gets those opportunities.

Hey, guys, I have an exciting announcement, we just recently made some updates to our three most popular online courses at process Tiller Academy comm if you’re a technician, that’s looking to improve your skills a little bit, maybe get some specialized training to be of more value to your customers and your employer. Or if you are an employer, a contractor that is looking to augment your existing in house training with online training that can be accessible from any device, this is a really great opportunity. Just go to process, chiller Academy comm just scroll down on the homepage, and you will see the course area. If you go into the course page, you will see that we have currently for limited time, we have a promo code of chiller Pro that will save you 25% on any one of these courses. So I hope you check it out. And looking forward to seeing you in class. What do you think about exposure to outsourcing, so one of the things that I think gets missed a lot, and I really want to hear your opinion on this. So you get a high school graduate and boy or girl doesn’t matter. They want to be a game designer or a graphics designer or a coder. You know, even you know, a lot of the politicians talk about, you know, go out and be a coder and learn how to do that. And they decided to do that. But there’s there’s a lot of college degrees that are relatively expensive to get take, you know, a traditional four or five, maybe six years depending on the student. And they they go out in the field and they get a job. And there’s always a pretty big risk of that job getting outsourced. Because the the young folks here, graduates here, they have to compete with much, much cheaper labor overseas primarily because a lot of countries as far as I know, they pay for a lot more of the you know, one of their a lot a lot of education is are heavily subsidized in other countries more so than here. And you know, you get a computer science major coming out, right and code for, you know, Oracle or whatever, they can easily get outsourced to a number of countries. Whereas, you know, skilled trades, I’m talking about HVAC, in particular, you get a chiller mechanic, somebody who’s you know, trained to work on 500 ton and up centrifugal chillers that that chiller is not getting outsourced once it gets landed in a building. You’re not outsourcing that to another country, right?

Yeah, that’s definitely one of the things that we have talked about is there’s less room for automation less room for outsourcing. Now, both of those things, are contentious debates within both Economics and Policy circles about what’s going on what’s the long term net effect of it? And I don’t necessarily have a concrete answer for that. I think that economists have certainly gotten some of that story wrong over the last 20 or 30 years, because we’ve simply looked at the story of, well, if something if manufacturing gets outsourced, the price of your product just went down by 30%. So you’re better off even though some people lost their jobs. Now we’re starting to recognize, well, we’ve got an opioid epidemic that’s killed hundreds of 1000s of people. And part of that is that people have lost that satisfaction they got from a career, does that 30% benefit that you get in reduced prices actually paying for that included the answers? So there’s there’s an ongoing debate there about sort of what happens in the future. But certainly, I think it’s true that you’ve got to be very careful at doing your career planning by looking not just at what’s the situation right now. But where’s the situation going? And the the look forward piece of that is is pretty critical. And yeah, I don’t see any meaningful way where somebody is going to be outsourcing HVAC technician jobs, because, you know, that’s, that’s, that’s literally not feasible. Now, I’m sure the industry will have to adapt like every other one. The only constant is change. And with all of these things, it’s very easy to to lose sight of the fact that every dollar you pay is $1 somebody else’s earning right we’re all Every every expenditure is somebody else’s income. And every dollar of your income was something that somebody else would have loved to pay you less because it’s coming out of their scarce resources. So it is a it is a big, complex, integrated system that you have to think about in that sense as well. But certainly the quick answer is it I don’t see how it gets outsourced.

Economics is just so amazing. It’s just, it’s just incredible. I mean, it’s necessary because it gives you the ability to see around corners. But on the flip side of it, you know, economics and numbers can be bent and twisted, and, you know, to to, it could be just as wrong as right. You know, it’s a it’s just a fascinating, fascinating endeavor from, you know, for me to understand.

Sure, and that’s the that’s, that is the right way to view it is be skeptical of everybody’s numbers, double check my math, too, you know, it’s science, science is a consensus process, not a single expert process. So a range of opinions and forecasting, the future is very, very difficult. So lots of people are almost always wrong. But you know, there’s a consensus view that is typically right more often than it’s wrong in the long run.

Right. So if you made it pretty good segue, I think, let me show over into one of the last topics that I want to talk about, and you referenced this a few you commented on this already a couple times in our in our discussion. What I have up on the screen here for my audio only guys, again, you should check this this podcast episode out on video too, because there’s a lot of stuff on the screen here as well. But I’m going to try to create a word picture for everybody out there. What I’m looking at here is a particular page from the Bureau of Labor Statistics. The matter of fact, if you just Google 49 dash nine, zero to one, that’s the report number from BLS Bureau of Labor Statistics. And this particular article is I believe the latest study is called the occupational employment and wages. And this is May 2020. I haven’t seen the I think this is the last one that they do. I think they do this every two years, if I remember, right. Anyway, this is the wage data for heating, air conditioning, refrigeration mechanics and installers. So the first takeaway that I got from this thing is, they’re mixing installers from technicians, or what they call mechanics. And that right from the get go from the jump is is gonna create an inaccuracy because typically, in the HVAC room, service technicians are going to make a relatively higher wage than installers do not in all cases, but they typically would do. And then the other thing is their sample data is 3000 44,020. people or individuals, I’m assuming, and they’ve got a mean hourly wage of $25.68. And, or mean annual wage of 53,004 10. And it’s just wrong. There’s just there’s just no, no way. That’s right in before I let you respond to that, Misha, cuz I’m dying to hear your answer on this. I ran a poll, and this is very unscientific. Okay. This is just a LinkedIn poll. And it shows the journeymen what I did is I said, Hey, US based journeymen wages. What are what do you guys pay? Now, there was a 229 people out of the 6500 looked at this thing. And unfortunately, the LinkedIn poll only allows for different criteria. So I started at $20 An hour and I went all the way up to 3501. And over and interestingly enough, so 20 to $25 was 2% of who responded 2501 to 30 was 5% 3001 to 35 was 12%. And then over 3501 was 81%. Right? So I’m assuming if you extrapolate that a little bit, journeymen technicians, or journeyman HVAC people are making foreign above $35 an hour which sort of blows away the, the data and then I went one step further each, I went into the FAQ of the site, which I’m not going to bore everybody with the details on that and the collection parameters that they that they use to get this data is I mean, it’s really out there. They they call they call and they send mailers out to companies, and you know how that goes. I mean, I don’t know what they should do, I think is tie into ADP or one of these big payroll houses and extrapolate there. data from there, so I’m going to shut up. You give me your your your opinion of what I’m looking at here? Am I totally off base or halfway accurate?

I’ll give you the clearest answer any economist will probably ever give you I think you’re accurate. I don’t think the numbers are correct. It’s not the and I don’t know if that’s going to be controversial to say or not, we’ll find out, I suppose. But no, I think that it’s a hard thing to measure. And I don’t think the BLS gets it exactly right. I’ve heard that from people in every different trades category, saying, you know, I looked at these BLS numbers, because I’m trying to get people in and people say, well, the wages aren’t that high. And then I look at the numbers and the wages. I don’t know anybody is making that little. Yeah. So I think that they are getting it wrong. Some of that could be sample selection. If I’m going to be charitable, then you know, you do get these distinctions about a contractor versus an employee, because you’re going to pay an employee less because you got to pay your payroll taxes and other benefits on top. And so maybe that drives down the the rate or, or something along those lines, that that could certainly impact it. But I also think that the is that the, the nature of the work is just harder to get and fully understand. And like you said, you’re you’re integrating different things that have very different wage rates. So how can you trust that at that statistic, the way that they put those things together? So it’s a bunch of different things that I think each individually contributes to a little bit of inaccuracy. And then the total final story is, it’s more inaccurate. So that’s, that’s definitely, I think, a good sense on your part, that it’s not,

yeah, well, you know, in their defense, just a little bit, just a little bit. Um, you know, you got to keep in mind that they’re collecting data. I mean, if you dig into the actual spreadsheets, which by the way you can download from from the site. They’re collecting data, massive, massive amounts of data, they just are. So you’re going to expect in the mix, that there’s going to be inaccuracies? My, my criticism, and this is me talking now, not an economist, but my criticism of that is that when the the educational community, the colleges, and even the high school counselors, when they quote, wage data, guess where it comes from? A lot of it comes from this website, and the data that that’s or other websites that are grabbing this, this data. And my argument with that is, you know, we’ve already got a big headwind in the skilled trade. perception that it’s, you know, like I keep saying, The consolation prize there, we’ve got a big headwind that we’re having to deal with already. And this is definitely not helping when the wage data that’s quoted is just markedly on, on accurate in my opinion.

Yeah, it definitely doesn’t help the situation when you’re understating versus overstating it. Yeah, we’ll see if we get it better. That’s certainly something that’s sort of on my radar is something that would be nice to improve if we could, and to get better information out there. So we’ll, we’ll see what we can accomplish. But, you know, it’s, that is the the truth, quote, unquote, in terms of labor market analysis, that is the consensus viewpoint is the Bureau of Labor Statistics has what is the truth about the number of workers and what they’re earning? So it’s gonna not turn and change overnight, but I think we can at least improve the the overall understanding of it, because, you know, I’ve, I’ve heard from, like I said, every different trade category, every single different industry saying these are not correct, right?

Well, one of the things I’m doing and I’ll be more than happy to share this data with you, again, it’s probably going to be really unscientific, but I’m working with Microsoft 365. And we’re trying to, and I’m not pitching them at all, but I’m, we’re working on setting up a national survey, where it goes out to all of our listeners, it goes out, it’s probably going to be a much bigger sampling than what this little one I showed you on LinkedIn. And we’re going to ask more questions, who’s actually asked, you know, who’s actually providing us with the data, we’re gonna put a form out there, they fill out. And then we’re gonna parse all the data into an Excel spreadsheet. So it’s gonna be very interesting to see what what comes in. I’ve got some pretty big trade associations and big contractors that are willing to participate in that. So when that data comes out, I’ll I’ll, I’ll track it down and share it with you and get your opinion of it.

W wonderful that sounds like Oh, but exactly the right way to do it. There’s, there’s ways to gauge data quality, that, you know, we can talk about more offline afterwards. But I think that’s really exciting. And it’s it’s probably overdue.

Yeah. Yeah. Well, that’s awesome. I can’t believe we talked for 45 minutes already, Misha, so is there anything you’d like to share with the audience about maybe how to educate themselves on more on skilled trades, maybe to talk to some of the parents out there that have, you know, have, you know, maybe Junior Senior Year boys and girls in in high school that are looking at, you know, looking at career choices now, is there anything you’d like to share?

There’s a couple of things. The first is we don’t pick up a big effect from parents saying that they’re close minded to the kids going into the trades, we have asked that of parents and they’ve said that they’re comfortable with it. Now, obviously, what people say and what they actually think are not always the same thing. But we’ve got no reason to necessarily be skeptical that it’s off that much. So parents are open to it. The and and really highlight that job satisfaction and the fact that wages are higher, and that you can start your own business pretty easily in the trades relative to other areas, right? It’s pretty difficult to go out and start up a manufacturing firm from scratch or a big law firm from scratch. But in the trades, you can start up your own business and work for yourself pretty easily. And that’s I think that entrepreneurial piece is really part of it. So wages, job satisfaction, entrepreneurship are sort of the big three. And then the other thing is if you want to sort of stay up to date on more research, obviously you can go to Angie comm slash research, you can also reach out to me on LinkedIn, I really am an open book there. So reach out anytime I try and be as accessible as possible. Even though as you know, I’m sometimes a little delayed. I do love to hear from people get their thoughts get their feelings feel if I if I missed the mark, I like to know that too. If you think I’m wrong about something, please let me know. If you’ve got an idea for other areas of research, let me know there too. And I also try and update people on what’s going on in the market in both areas.

Or do you check your Do you surf your messages on LinkedIn very much, Misha.

Yeah, I try and get through them at least once a week. It’s good volume is not nothing, but I try and get through once a week. Okay, let’s see traffic travel weeks a little bit worse than others.

Yeah, what’s the best way if somebody’s listening to the podcast has a question comment concern? What’s the best way for people to reach it reaches it on LinkedIn or through the website? Or what? How can people reach you? Either word

LinkedIn will come to me directly to the website. It’ll it’ll filter to me eventually. But either way I try and be really accessible on both.

Okay, sounds good. Well, that’s excellent. Misha, thank you so much. And I really enjoyed this conversation. And I think that my audience out there is going to get a lot of data and I would encourage those of you listening. If you’re listening to the audio only portion of it to get a chance to check out the video which will be up on YouTube. It will have links to our website that will also have the audio and video portions are of this episode available in that will be available in a couple of weeks. So that is it. I hope you enjoyed this episode. I very much look forward to continuing to connect with you. Please don’t hesitate to send me messages on LinkedIn. I’m on there all the time. Or you can reach out to me on my email. I’m at M King at process tour Academy calm and until next week. When I give you the next installment I wish you a great week, and I will connect up with you again soon. Take care.