For years, New Zealand has encouraged young people to pursue university as the pathway to success. But as student debt grows, the job market changes, and some trades continue to deliver strong incomes, the Trades vs Degrees debate is becoming more relevant than ever.
In this episode, James and Mike unpacked the real numbers behind Trades vs Degrees, explored how student debt impacts long-term wealth, and discussed how AI could reshape the future of work.
The Income Debate
One of the biggest misconceptions in the Trades vs Degrees conversation is that degree holders dramatically out-earn tradespeople throughout their careers.
The reality is more nuanced.
According to the figures discussed in the episode, degree holders start on roughly $62,000 and reach around $95,000 after nine years. Electricians begin on approximately $84,000 and approach $100,000 by year nine, while plumbers start around $79,000 and reach roughly $94,000 over the same period.
While degree holders may earn more over the longer term on average, the gap is often much smaller than people expect.
This raises an important question: is it better to earn more immediately, or earn more later?
The Cost of Delayed Earnings
One of the most significant differences between trades and university pathways occurs between the ages of 18 and 23.
While university students are paying fees, accumulating student debt, and delaying full-time income, apprentices are often earning immediately. They can begin contributing to KiwiSaver, gaining work experience, and potentially saving towards a house deposit years earlier than their university counterparts.
For many graduates, university also means starting their working life with a student loan that takes years to repay.
That debt can affect other financial goals, including home ownership and long-term wealth building.
The biggest financial gap between the two pathways is often not what people earn later in life, but what happens during those early adult years.
Does Every Career Need a Degree?
Another key point raised in the episode was whether every career actually requires a university qualification.
Mike argued that New Zealand has potentially overemphasised university education, with many business and professional roles teaching most skills on the job.
While specialist professions such as medicine and engineering clearly require formal qualifications, many other careers may place greater value on practical experience, adaptability, and continuous learning.
The discussion suggested that many people attend university simply because it feels like the next logical step, rather than because a degree is essential for their chosen career.
That doesn’t necessarily make university a poor choice, but it does mean prospective students should carefully consider whether the qualification aligns with their long-term goals.
How AI Could Change the Equation
As artificial intelligence continues to evolve, it’s adding a new dimension to the question of whether a trade or a degree is the better path.
Mike and James discussed recent figures showing unemployment among 15 to 24-year-olds sitting at 16.5%, significantly higher than the overall unemployment rate. They also noted that graduate job advertisements have been declining in both New Zealand and Australia since 2023.
One of the concerns raised is that many graduate and entry-level roles involve administrative or repetitive work – the very tasks AI is increasingly capable of performing.
The challenge is that these junior positions have traditionally been where people learn and gain experience before progressing into more senior roles.
If technology replaces some of these early-career opportunities, the pathway into certain professions may look very different in the future.
At the same time, the James acknowledged that technological change has historically created new jobs as well as eliminating old ones.
Why Trades May Be More Resistant to AI
While AI is changing many office-based roles, the discussion highlighted that trades currently appear more insulated from disruption.
Technology may improve efficiency and help tradespeople work smarter, but AI cannot physically build houses, install plumbing, or perform electrical work.
As a result, practical skills remain highly valuable.
The Mike suggested that becoming exceptional at something valuable matters more than the qualification itself. Whether someone chooses a trade or a degree, developing expertise and solving real-world problems is likely to remain important.
Attitude and Work Ethic Could Matter More Than Qualifications
Having a qualification doesn’t automatically guarantee success.
When discussing recruitment, Mike explained that attitude and work ethic are often far more important than academic results.
Technical skills can be taught, but qualities such as reliability, initiative, and a willingness to go the extra mile are much harder to develop.
A degree may open a door, but long-term success still depends on what someone does once they walk through it.
Similarly, apprenticeships teach practical problem-solving, responsibility, and workplace discipline from an early age.
Both pathways can produce highly successful people, but neither guarantees success on its own.
Key Takeaways
- The income gap between trades and degree-qualified careers is often smaller than many people expect.
- Apprentices typically earn income earlier and avoid accumulating large student debts.
- Student loans can affect home ownership, KiwiSaver contributions, and long-term wealth building.
- Not every career requires a university qualification, particularly in some business-related fields.
- AI may reduce some entry-level office roles, creating uncertainty around traditional graduate pathways.
- Trades currently appear more resistant to AI disruption because they involve physical, hands-on work.
- Becoming highly skilled and valuable matters more than the qualification itself.
- Attitude, work ethic, and practical experience remain critical drivers of long-term career success.
Next Steps
If you’d like to watch more, check out these other episodes below.
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The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
