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August 18, 2021

Millennials are Abandoning the Gig Economy for the Trades

The gig economy – what was thought to be the answer to ongoing employment struggles by millennials has proven not to be the saving grace it appeared to be. For this generation, it seems as though the trades are making a comeback and bridge the gap between gig worker and college grad. A tradesman may be considered a person skilled enough in a particular type of manual or mechanical work to make a living at it. This could be a craft that involves the creation of items both artistic and functional, such as carpentry, or a job that is primarily functional in nature, such as electrical work.

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What is the Gig Economy?

Gig economy is defined as the exchange of labor for money between individuals or companies via digital platforms that actively facilitate matching between providers and customers, on a short-term and payment-by-task basis,”

In other words, it’s typically exchanging quick, one-off jobs and tasks for one-time payments with or without contractual obligations.

There are multiple types of gig workers & industries in demand of gig workers. These can range from low level, repetitive task-oriented roles, to highly specialized work such as IT, or creative gigs.

Types of Gig Workers

  • Freelancers: Perform services for multiple clients.
  • Consultants: Provide guidance to clients.
  • Independent contractors: Appear similar to traditional employees but are independent.
  • Temps: Temporary independent contract workers.
  • Seasonal workers: Provide temporary services as independent contractors.

According to a survey by Gallup, their data shows “a tale of two gig economies.” There are independent gig workers and then there are temporary or contingent workers. Independent gig workers, being their own boss, enjoy more flexibility and freedom, Gallup notes.

Millennials have begun increasingly choosing short term prospective gigs over clocking in, and many studies have attributed it down to the perception of personal freedom, existential satisfaction, a lack of bureaucracy and monotony, or even just to supplement their own income.

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What are the Downsides of Working in the Gig Economy?

While the gig economy has provided seemingly numerous opportunities, many millennials are starting to realize that they’ve been taken for a ride.

Many companies have begun increasing the use of independent contractors in recent decades in part to lower labor costs.

Employees are typically entitled to a range of benefits not afforded to contractors or gig economy workers, including a minimum wage, employment taxes, overtime pay, insurance coverage, 401k retirement plans and other labor protections.

This means that the cost burden of these perks usually entitled to employees must rest on the shoulders of the contractors & gig economy workers themselves.

Gig economy workers & independent contractors more closely resemble small business owners in the eyes of the government. This means that the workers themselves must assume all risks, liabilities, costs, and revenue. For most, the risk assumed is not worth the wages.

Instead of having taxes held automatically like typical employees do, gig economy workers have to estimate and file taxes quarterly, and in some cases, even monthly. Many gig economy workers are surprised to learn that in addition to the frequent filing and income taxes they must pay, they are also liable for self-employment tax, which is an extra 15.3% of all revenue generated.

The increased need for meticulous record keeping and bureaucracy is enough to sway many gig economy workers after they get their feet wet. At the end of the day, if you are savvy enough to navigate the unruly waters of small business ownership, then you are likely qualified to be a well-paid employee.

According to a paper co-authored by the chief economist at Uber, 68 percent of drivers quit within 6 months after seeing the amount of money they truly made after all costs, fees, and taxes.

In addition to increased risk & lower, inconsistent pay, gig economy workers suffer a disturbing trend of negative mental health concerns. A recent study titled, “The Generation Effect: Millennials, employment precarity, and the 21st-century workplace,” looked at the ways in which the rise of precarious work is affecting an entire generation of millennial workers, and the results are bleak.

The study states that nearly half of millennials are reportedly depressed or anxious about their work status, and almost 40% were angry about the uncertainty of work and opportunities in the gig economy.

Why The Trades May Be the Answer Millennials are Searching For

The trades have built America from the ground up, these are the electricians, plumbers, mechanics, and technicians that are the driving force behind keeping the country up and running. Many of these jobs were once considered the cream of the crop, and a noble occupation, but in the last few decades, have been abandoned due to a hard push for our youth to attend universities instead. The trades have been seen as “dirty work” & “lesser paid” but in many cases, that couldn’t be further from the truth.

There are many reasons why the trades are making a robust come back. Here at Paschal Air, Plumbing & Electric, we consider ourselves pretty knowledgeable on how the trades have changed the lives of hundreds of our employees. Here are the main reasons why they chose to work in the trades.

Job Security

Since the 2000s, there has been a major push for our upcoming youth to attend university, get that cushy million dollar tech job, and secure that sweet corner office. The youth of today still think that is where the good paying jobs are, but don’t realize just how few and far between they are. Skilled trades careers are a viable financial alternative to that cushy office job. What we have seen for the past few decades, is that office job being outsourced overseas, taking away just one more opportunity for someone else. The trades cannot be outsourced. Someone in another country can’t remotely unclog your toilet or keep your house cool. We live in a society that always needs plumbers, electricians, HVAC technicians, mechanics, and other tradesmen.  You can’t call a customer service agent overseas to install your new gas range and you can’t ship your furnace away for repair. You need local talent — these jobs require literal, hands-on work.

There is currently a net exodus of tradesmen retiring, vs new apprentices stepping in their shoes. According to numbers from the National Electrical Contractors Association, 7,000 electricians join the field each year, but 10,000 retire. In 2019, there were an estimated 380,000 HVAC jobs in the United States, with a projected growth rate of 4% from 2019 to 2029. What does this mean to you?  There are currently more HVAC job openings than there are technicians able to fill those roles. The demand for HVAC workers is outpacing the supply of new technicians in the job market. While many industries & job roles, such as manufacturing & production are seeing massive lay offs, HVAC companies are constantly hiring & seeking qualified employees.

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Minimal Student Debt

Earning a two or four year degree at a private or public university can be expensive. In the United States, the average student finishes university with $40,000 in student debt. The current outstanding federal student loan debt in the country is close to topping $2 TRILLION dollars. Trade school is a good alternative to college for individuals that don’t wish to accumulate student debt, or spend that many years in school. Many trades companies even take in & train new techs off the street, or pay off your trade school tuition after you graduate. Tradesmen can typically enter their field after school and begin working without 5 & 6 figure debts looming over their head just for their education.

The Trades Provide Real Value in Society

One message that has constantly been hammered in the minds of millennials, is that they “must love the work they do” so that they never work a day in their lives, and that the work they do must have a real impact in society. The problem with this, is that work is work. Even people who love what they do will tell you that there are days when they want to give up, wish they would’ve stayed in bed, are tired, and that it’s hard. Now apply this to the trades. Doing electrical work all day, crawling up in hot attics, isn’t very fun. Unclogging someone’s toilet is gross. But many contractors and small business owners will tell you: they love what they do. Do they ever “work a day in their lives”? Yep. Every day of their lives. But there’s fulfillment in it. The trades provide a true value to society, your community, and your neighbors. The trades are the ones who physically build the country. If you live in a heated or air conditioned home, enjoy flushing your toilet, and love your hot showers in the morning, then you can thank a tradesman for it.

The Trades Pay Well

Nearly 1 in 5 millennial college grads expect to earn more than $85,000 per year from their first job after graduation, according to a recent survey by AIG Retirement Services & EVERFI. Prior to the 2020 pandemic, the average starting salary for college graduates was only $47,000. That means that the average starting salary is barely above half of what recent grads expect to earn. Not only does the starting pay fall short of expectations, but combined with the need to repay student loans, that starting figure is actually much less when you factor in student loan repayments. With the average debt carried being $39,000, that means that around $400 a month is going towards loan payments.

In contrast, the average starting salary for a plumber is $55k, completely depending on where you live. For example in the state of Illinois, the average salary of a plumber is over $86,000. Electricians, HVAC Technicians, and similar trades often net newcomers an average of over $65k in starting salaries – a bit higher than their college graduate counterparts. Many tradesman move up to making 6 figures during their career, and have the opportunity to start their own business performing services for their community, which can equate to an uncapped income.


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Work for a Reputable Company in the Trades

When choosing a career in the trades, it is imperative to work for a company that is willing to invest in seeing you succeed. Not all trades companies are created equal, and starting with the wrong one could give you the wrong impression of the industry. A great company supports it’s tradesmen by:

  • Continuously training & providing education & mentorship opportunities to it’s employees
  • Provides benefits beyond a wage (i.e., insurance, vacation time, performance bonuses, retirement, etc.)
  • Holds values similar to your own
  • Listens to employee feedback & adjusts accordingly
  • Reinvesting in the growth of the organization
  • Provides opportunities for advancement

Paschal Air, Plumbing & Electric was named the Best Place to Work in Arkansas, because we embody these ideals, and create an environment where employees can truly thrive & grow. If you are interested in getting started in the trades, please send us your resume here.