Those trips to the car mechanic for a new timing chain, alternator, or water pump are getting more expensive because of student loans.
The Wall Street Journal recently highlighted problems Ford is having hiring mechanics, despite the high wages offered. Federal student loans, the editorial board opined, make college seem like a cheaper and better option than going to trade school. This leads to a shortage of trade workers, which leads to higher prices for consumers.
“We are in trouble in our country. We are not talking about this enough,” Ford CEO Jim Farley said. “We have over a million openings in critical jobs, emergency services, trucking, factory workers, plumbers, electricians and tradesmen.”
“Specifically, Ford can’t fill 5,000 mechanic jobs that pay $120,000 a year,” the newspaper reported.
The Wall Street Journal offered this analysis:
Government subsidies for college and graduate education have encouraged the young to go to college even though they might be better off learning a trade. This has created a skills mismatch in the labor market. Unemployment among young college grads is increasing, while employers struggle to hire skilled manufacturing workers, technicians and contractors.
Only 114,000 Americans in their 20s completed vocational programs during the first 10 months of last year, compared to 1.24 million who graduated from four-year colleges and 405,000 who received advanced degrees. Yet recent bachelor’s recipients in their 20s were 5.6 percentage points less likely to be employed than those who finished vocational programs.
Companies may get around these hiring problems by outsourcing labor, the editors wrote. That does not work for services that must be performed here.
“But an American whose F-150 truck breaks down will still have to pay more at the repair shop owing to the mechanic shortage,” the editors wrote.
They said that new student loan caps on graduate school might help the problem, but there is still a “bias” in favor of college which leads to “tangible harm to the labor market—and the young.”
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