A sizable share of the knowledge labor market is highly exposed to the newest forms of generative AI, according to recent research. At the same time, demand for young college graduates has fallen from a 2022 peak to below pre-pandemic levels.
It would be no surprise if these developments inspired a shift to blue-collar work among young adults, half of whom believe that artificial intelligence will replace some or most of their job functions.
Falling college enrollment and rising vocational enrollment buttress the notion that Gen Z is becoming the toolbelt generation. Between 2019 and spring 2024, enrollment of bachelor’s degree students fell by 3.6 percent and associate’s degree enrollment fell by 15.9 percent. Vocational enrollment rose by 4.6 percent during the same time period.1National Student Clearinghouse Research Center. Current Term Enrollment Estimates: Spring 2024, Data Appendix, accessed July 12, 2024. https://nscresearchcenter.org/wp-content/uploads/CTEESpring2024-Appendix.xlsx
To see whether these college enrollment trends are affecting the workforce, we turned to ADP payroll data to track the share of people in blue-collar, white-collar, and service jobs.
We found that between January 2019 and May 2024, the blue-collar share of employment rose faster for workers in their early 20s than for workers aged 25 to 39. But the blue-collar share for those younger workers has been relatively flat since 2022, signaling a potential plateau or reversal of the trend.
What is blue-collar work anyway?
While there’s no hard-and-fast definition, blue-collar work involves the production of goods, while white-collar work occurs at a desk in an office.
Although intuitive, the delineation between blue- and white-collar work leaves loads of room for interpretation, especially in today’s knowledge and service economy.
While acknowledging these limitations, for the purposes of examining the hypothesis that Gen Z prefers skilled trades, we identified blue- and white-collar workers using a Bureau of Labor Statistics system. BLS mapped major occupational groups to blue-collar, white-collar, and service work.
This practice, which the BLS discontinued in 2007, had pitfalls. For example, the service category combined occupations as disparate as health care support—which includes nursing assistants, phlebotomists, and physical therapy aides—and personal care and service occupations—which include recreation workers, barbers, hairstylists, and cosmetologists.
And work frequently fits into more than one category. BLS labeled health care support a service, for example, but many health care support jobs meet the definition of white collar. Case in point are medical transcriptionists, who are trained in anatomy, physiology, and grammar and who do their work at a desk.
Still, for this analysis, the BLS system gives us definitions consistent with prior reporting.
Show/hide BLS definitions of blue-collar, white-collar, and service jobs
Job category | SOC Major Occupational Groups with SOC code prefixes |
|---|---|
| Blue-collar |
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| White-collar |
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| Service |
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The rise of blue-collar work might be short-lived
Generation Z is defined as that group born between 1997 and 2012, the oldest of whom turn 27 this year. So one clear sign of the generation’s rising preference for the skilled trades would be an increase in the blue-collar share of total employment for workers aged 20 to 24 between January 2019, when only the oldest members of Gen Z were in that age group, and now, when they comprise all members of the group.
We would expect to see the strongest shift toward blue-collar work among 20- to 24-year-olds because they’re just starting their careers and in tune with shifts in the labor market. Younger workers also are more responsive than older workers to changes in the actual or perceived benefits of post-secondary education versus vocational training.
Yet because demand for white-collar workers has cooled and demand for service workers is still recovering four years after the Covid-19 pandemic started, we also would expect to see a shift into blue-collar work across all but the oldest workers, many or most of whom are on their way to retirement and unlikely to be contemplating a career switch.
And that’s exactly what we found. In January 2024, the blue-collar share of employment for workers 20 to 24 was 18.6 percent, 2.3 percentage points (1.14 times) larger than that of the same age group in January 2019 and 2.5 percentage points (1.16 times) larger than that of workers 25 to 39.
In short, the blue-collar share of employment for young workers has been rising since 2020, but that trend plateaued in 2022.
Where does that leave us?
A toolbelt generation would be good news for U.S. employers and policymakers worried about shortages of skilled labor. But while payroll data shows signs of a blue-collar emergence, it’s not yet clear how long that trend will continue.
While the share of blue-collar workers varies seasonally, our analysis reveals that the rising share of blue-collar employment among young workers has stalled as the broader labor market cools.
Our analysis doesn’t allow us to compare the uptake of blue-collar work among younger workers now to workers of previous generations when they were the same age. So we can’t say whether Gen Z prefers blue collar work any more than previous generations did.
Just because we aren’t sure that a new generation of blue-collar workers has emerged doesn’t mean we shouldn’t try to create one. But labor force development is more likely to yield results than staring at trade school enrollment and employment trends and wishing that generation into existence.
And technology’s ubiquitous presence and the growing complexity of nearly all work in our advanced economy are good reasons to abandon the blue-collar and white-collar labels altogether. Just ask the engineer who spends part of her day at a desk and part of it on a construction site picking up a tool now and then. Or the arborist with an advanced science degree who wears steel-toed boots to his outdoor job. What color are their collars?
The high dive
For those who want to go deeper into the data
The blue-collar share of employment for workers aged 20 to 24 grew more quickly than for older workers, and since plateaued. But why? Here’s a closer look.
