How Much Do Skilled Trades Pay?
KEY POINTS
Opportunity for life long learning: classroom, apprentice, certification, evolving regulatory environment
Skilled trades offer the ability to earn above average income
Self-employment opportunities and global mobility are key attractions
Why are we talking about skilled trades?
Because skilled trades represent an amazing opportunity to unleash your creative side. The artistry shines through when a tradesperson takes a blank slate and creates an enduring structure or service offering. The blending of intellect, skill, physicality, and passion also allows your creativity to fuel your legacy journey.
Equally important, skilled trades emphasize the importance of ongoing education as further detailed in our post Financial Literacy - A Definitive Guide. Skilled trades are among the top paying jobs.
What is a skilled trade?
Before we begin, some context. What is a skilled trade?
They include virtually all manual jobs that require some degree of training. They generally fall into the following categories: construction, industrial, motive power, and service.
That is a broad definition, and “some degree of training” sounds rather basic. This needs immediate clarification. If you choose a skilled trade as your future, you need to prepare yourself for a world of lifelong training (classroom, apprentice, multiple certification levels, annual skills training, evolving regulatory landscape, etc.). For example, an electrical apprenticeship typically takes 3-4 years and requires very rigorous classroom training, regardless of country.
We all know someone working in the trades. A good friend of mine is an electrician and owns his own electrical company. Sounds great, but why did he choose that career? What should he have considered when making such a decision? Would he have changed his mind when viewing his decision through the legacy lens?
Was it a good legacy move?
Let’s dig in.
When I was young, I was often told to pursue my passion and the money will follow. Ideally, I would be a quarterback in the National Football League earning millions of dollars per year. Unfortunately, I am only 5’8” (5’7 and ¾” as my wife likes to remind me … ugh), weigh under 165 pounds, and can’t throw a football more than about 40 yards. My legacy would be in jeopardy if I tied my income potential solely to my passion pursuits.
Lesson learned, I needed more than passion to fuel my legacy plan. I had to find my intersection of passion, ability, and income desire and develop a strategic plan.
My passion for football and its income earning potential were a great fit, however, I lacked the necessary ability. There are other careers I could have excelled at while meeting my income requirements; however, I lacked the passion for such pursuits. My chosen career in financial services represents a great example of finding your personal intersection to form this critical pillar of your legacy plan.
You are the best judge of your passion and ability. Therefore, we will start by focusing on income.
What do skilled trades pay?
At a high level, it is safe to say many trades pay above the median rate earned by society. We consider the median value (i.e., half the people make more than this amount and half the people make less than this amount) rather than the average value which can be skewed by extreme values.
The following financial highlights are rough guidelines derived from multiple government databases. We caution that they are based on large pools of workers.
Your ultimate earnings will be a function of a variety of factors, some of which you will not control. Some variables to consider: location, union, non-union, strength of economy, your skillset, your accreditation, your work ethic, how you fit in with the company, etc.
Let’s look at some broad financial data points.
Elevator technicians in Canada make approximately 110% more than the median wage in Canada. At the high end, this job can generate more than 300% of the median Canadian wage. A sampling of other trades in Canada highlighted the following approximate ranges:
The existence of elevated incomes for the skilled trades is prevalent in many parts of the developed world. We randomly selected two additional markets and noted similar trends. The specific trades referenced experience elevated incomes in New York State and London, England. However, it was interesting to note that auto body tradespersons in London experienced income rates below the median. Again, your experience could vary greatly.
You may have already narrowed your search down to a select few trades. It is highly likely these skilled trades are in demand globally. It would be wise to pause and consider what additional training / testing may be required to have such certification accepted in another country. You may not have plans to move abroad, but life can throw you a curve ball at any time and you will want to have maximum flexibility to respond. Additional insights into what moving abroad entails are discussed in our post An Expat's Guide to Moving Abroad.
My university days were focused on obtaining my degree and subsequent designation. I never thought about moving abroad. Marriage quickly changed that. I was working in Bermuda 5 months after the ceremony. I have friends that moved to the Czech Republic, Poland, Switzerland, Pakistan, Greece, the United Kingdom, Costa Rica, and the list goes on.
Skilled trades and automation risk
Another factor to consider is automation. We can either fear it or embrace it. We have all watched the news stories showing the latest layoffs due to automation. I have watched robotic bricklayers gain traction over the past several years. Few people could have forecasted such a transformation a generation ago.
We must overcome our fears and embrace automation. Yes, automation will continue to eliminate jobs; however, it will also create new types of career opportunities.
So, let’s minimize our risk exposure to automation.
There are various studies that estimate tradespersons have approximately 15-20% automation risk. Obviously, some trades are riskier than others. Construction, for instance, is forecast to lose over 60% of its jobs to automation: bricklayers, crane operators, bulldozer drivers, etc.
The good news is that higher skilled roles that incorporate decision making, problem-solving, and people management are less susceptible to automation. Many trades incorporate these qualities. Additionally, you can develop these qualities as you gain experience and increase your responsibilities.
We invite to read our post Is Your Job at Risk of Automation? for an in-depth dive into how to protect yourself from the pending waves of automation headed your way.
Tradespeople also have the option to own their own company while providing a diverse array of services; thereby, further reducing the risk of automation. Ownership is not for everyone, but it can be an amazing legacy enhancer for those with an entrepreneurial spirit. We will discuss the incorporation process and related risk/rewards attributes in a separate blog post.
Lastly, let’s not forget …
Tradespersons are ideally situated to participate in the gig economy. Whether it is fixing a neighbor’s fence or grooming pets on weekends, many tradespersons can augment their income. Participation in the gig economy is a great way to mitigate the impact of a recession and for building a clientele and reputation for your future business.
Trades can be a great foundation for your legacy.
Which path will you choose?
For more information please click on the following:
Skilled Trades - United States
Skilled Trades - United States Department of Education
Skilled Trades - United States Department of Labor
