Just... ̶L̶e̶a̶r̶n̶ ̶T̶o̶ ̶C̶o̶d̶e̶,̶ ̶G̶e̶t̶ ̶A̶n̶ ̶M̶B̶A̶,̶ ̶S̶t̶u̶d̶y̶ ̶S̶T̶E̶M̶... Get A Trade!
How Money Works Uncut
0:00 There was a pretty good chance that at some point in your life,
0:02 you were told that if you didn't go to college,
0:04 you would fall significantly behind your peers that did.
0:07 For the last three decades in particular,
0:09 college admissions went through the roof as it has
0:11 become easier to finance and easier to qualify for.
0:13 This meant that instead of being a place
0:15 for a small number of people to hone highly specialized skills,
0:18 it has slowly morphed into a dividing line between people who went 80k into debt
0:22 to study a uselessly generic business degree and people
0:25 who didn't do that, you know, the losers.
0:28 Well, yeah.
0:29 As these millions of graduates have entered the job market,
0:33 their degrees have simultaneously become less special and the jobs
0:36 they are after have become much more competitive.
0:38 All the while, we have slowly figured out that a lot
0:41 of those blue collar jobs weren't so bad after all.
0:44 The blue collar boom looks to be in full force.
0:47 As today, the unemployment gap between the men with a college
0:50 degree and men without a college degree is effectively zero,
0:53 challenging the idea that higher education is
0:55 a one-way ticket to the middle class.
0:57 This has in turn, at least in theory, inspired policies to bring back as much
1:01 of this work as possible as quickly as possible.
1:04 Now, individually, you absolutely should at least consider
1:07 a trade if you are thinking about your own future.
1:10 Or at the very least,
1:11 you shouldn't dismiss it because someone told you that college was the only way.
1:15 But across the entire economy,
1:16 we might be repeating the same mistakes all over again.
1:19 We told people to get a trade and then decided blue collar work was beneath us.
1:23 We then told everybody to get a college
1:25 degree and then told them to learn to code.
1:28 And then when that wasn't enough,
1:29 we told them to get a master's degree and now we have gone all the way back
1:33 around again to telling people a trade is
1:35 the only way to get ahead in today's job market.
1:37 It all raises the obvious question, are we perpetually just giving career
1:41 advice for the last generation's job market?
1:43 How much student loans do you have did you pull?
1:47 120 in total for like living expenses and things like that.
1:50 What trade are you in and how much money do you make?
1:53 130 to 140 a year, but that's with overtime.
1:55 Proofing over 100 years, tile injection 90,000 a year,
1:58 civil construction and highrise 200.
2:00 The centerpiece of my plan for a manufacturing renaissance
2:04 will be a 15% made in America tax rate.
2:08 Made in America all over the place.
2:11 A little bit made in the USA, but made in America.
2:15 Everything had made in America.
2:16 Back in the good old days of 2024,
2:19 all workers had to worry about was ghost jobs, quiet firing, job washing,
2:23 career cushioning, invisible overtime, application black holes,
2:27 recentism, digital downsizing, compensation compression,
2:30 burnout attrition, and when all else fails, good old-fashioned rolling layoffs.
2:34 But today, the job market is dealing with a whole new set of trends.
2:38 And don't worry, they come with a whole fresh list of dumb corporate buzzwords.
2:42 New economic data, if we are allowed to believe that anymore,
2:45 is revealing some stark realities about the ways that people are finding a job,
2:49 keeping a job, and progressing in a job.
2:52 Unfortunately, as you have probably already guessed,
2:54 a lot of these changes are throwing young workers,
2:56 and in particular, young men, out of the frying pan and into the fire.
3:00 For the first time ever,
3:02 unemployment amongst young male college graduates is the same as non-graduates.
3:05 The share of unemployed people entering the job market
3:08 for the first time is the highest it has been since 1988.
3:11 and job mobility has effectively frozen.
3:13 Now, I know what you might be thinking.
3:16 All things considered, the unemployment rate still looks pretty good, right?
3:19 Well, that might actually be part of the problem.
3:22 And if all of this wasn't bad enough already,
3:24 there is now a good chance that art
3:27 history majors are earning more than you are.
3:29 There is a funny, but not totally
3:31 inaccurate anecdote amongst business analysts that if
3:34 you want to find an industry that's about to have really bad job security,
3:37 then just look where all the Ivy League grads are going.
3:39 For a while, that was oil and gas companies before the 1980s oil crisis.
3:43 Then it was outsourcing operations before the Asian financial crisis.
3:47 Then early technology before the dotcom crash,
3:49 finance before the global financial crisis, and now over the most recent decade,
3:53 it's been big tech paying huge salaries
3:55 to talented graduates early in their careers.
3:58 Now, obviously, there is a lot of hindsight here.
4:00 Nothing can boom forever.
4:01 And of course, a lot of young graduates from top schools are going
4:04 to try to find a job that pays them as well as possible,
4:08 if for no other reason than to start paying back that tuition.
4:11 The problem is that everybody else sees these growing industries
4:14 where people can make good money earlier in their career,
4:16 and they try to get qualifications to move into those roles, too.
4:20 But no industry can boom forever.
4:21 And by the time most people catch up,
4:23 they find themselves overqualified for a role that doesn't exist anymore.
4:26 For the last 10 years, the story has been that everybody getting laid off
4:30 from their factory job should just learn to code.
4:33 But before that, it was everybody should go and get an MBA.
4:37 According to the Graduate Management Admissions Council,
4:40 2022, right after the crash,
4:42 was the all-time peak of people enrolling in post-graduate business
4:45 school in the hopes that it would boost their stalling careers.
4:48 According to the numbers today,
4:49 it looks like that well-intentioned but ultimately flawed
4:51 advice may be going to college at all.
4:54 As the unemployment rate is now the same
4:57 between graduates and non-graduates after this data went live,
5:00 there were several articles concluding that this signifies
5:02 the end of the higher education payoff,
5:04 which is probably a bit of an oversimplification for the sake of hyperbole.
5:09 This is absolutely a concerning trend,
5:11 but there are two important details you need to understand
5:14 about it before you go canceling that college admission.
5:16 The first is that if both of these groups have the same rate of unemployment,
5:20 that doesn't necessarily mean that the earnings advantage of college is gone.
5:24 Looking for a job as a qualified engineer is normally going
5:26 to be better than looking for a job as an unskilled laborer.
5:29 So even though the same share of these two groups may be out of work,
5:32 the earnings of the college graduates is still higher.
5:35 Also something I feel I need to repeat as often as I can.
5:39 The unemployment rate is a really narrow statistic that people
5:42 pay far too much attention to as a singular data point.
5:45 To count as unemployed,
5:46 you need to be out of the job and actively looking for more work.
5:50 Today, according to the Bureau of Labor Statistics,
5:53 about 72% of people with a bachelor's degree or higher
5:56 qualification are actively working or looking for a job.
5:59 That number is falling every year, which we will address soon,
6:02 but it's still significantly higher than the 56% of high
6:05 school graduates who are actively engaged in the labor force,
6:08 and it's even worse for people who didn't graduate high school.
6:11 But they are getting more involved.
6:13 And again, we will get to why soon.
6:15 For now, what you need to remember is
6:17 that even though this particular statistic looks bad, and don't get me wrong,
6:20 it is bad, you are still more likely to have
6:23 a job and have a higher paying job with a college degree.
6:26 But that's still not the whole calculation.
6:28 Degrees are not free.
6:29 And a lot of people are realizing that lifetime earnings are great and all,
6:33 but sometimes a little bit of money early in life with no debt is better than
6:36 more money later in life with big repayments
6:38 the moment you are handed a piece of paper.
6:41 The trend is that every year the math is looking a little bit worse.
6:44 And that is something that should be carefully considered
6:46 for any investment with a 40 or 50year payoff period.
6:50 But that's just the statistical details that you
6:53 need to understand about this graduate unemployment problem.
6:55 The second and much more important point is that this only applies to men.
7:00 The unemployment gap for graduate women is lower than it has been historically,
7:05 but is still pretty wide.
7:06 And it's actually been growing at the same
7:09 time the gap for men has been disappearing.
7:11 And the question is why?
7:13 Well, this strange difference actually reveals a lot
7:15 about other recent trends in the job market.
7:18 So, it's time to learn how many works to find out how it's all changing.
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8:29 Another subtle but extremely important change that has been recorded
8:32 in the job market is the changing payoff for job hopping.
8:35 We've mentioned multiple times that workers who are
8:38 overly loyal to their company statistically earn significantly
8:40 less over their working careers when compared
8:42 to those who hop jobs for promotions or pay bumps.
8:45 But that has changed and over the last year the benefit has all but disappeared.
8:50 Now a little bit of that is because wage growth is just slowing down overall.
8:54 But a larger trend is that the job
8:57 market is encouraging staying put and doing absolutely nothing.
9:00 Nobody is hiring.
9:01 Nobody is leaving their job.
9:03 Nobody is pushing for a promotion and nobody is doing anything
9:06 that could open them up to the next round of layoffs.
9:09 According to industry reports, some people are even avoiding new jobs that could
9:13 be considered career advancements so they can stay
9:15 with a company in a role where they are past
9:17 probation and feel less at risk of being let go.
9:20 This is also benefiting people in less boom and bust
9:23 careers like those who went and got an arts degree.
9:26 Generally, these people go into their fields because they are genuinely
9:29 passionate about it over people who are chasing a lucrative career.
9:32 They generally take less career risks and hold
9:35 on to roles that they become extremely
9:36 proficient at, which makes them harder to replace
9:39 than random business and commerce graduate number A3113.
9:43 This is not the best strategy in good
9:44 times if all you care about was making money.
9:47 But it gave them a head start on what everybody is doing right now,
9:50 which is holding on to their job for dear life.
9:52 This trend of people holding on to the rules has its own buzzword,
9:55 because of course it has its own buzzword, and it's called job hugging.
9:59 Overall, it's not a great sign when combined
10:01 with the less than stellar new jobs data, but it is the logical response
10:05 by all parties dealing with increased uncertainty,
10:07 which is where we get back to this growing
10:10 gap between young men and women in the workplace.
10:13 There is a lot to unpack there,
10:15 but there are three key differences driving this trend.
10:17 The first is the push to equalize gender
10:20 balance in certain roles, but not all roles.
10:22 The push has been toward getting women
10:24 into male-dominated fields that require a college degree,
10:26 like STEM and business management,
10:28 but not as much the unskilled fields that are also dominated by men,
10:32 like the trades and labor roles.
10:33 Women in STEM has been a big focus of government programs,
10:37 corporate initiatives, and school enrollments for decades at this point,
10:40 and it's been highly successful at opening up the field to more talent.
10:43 This means that men are competing with a wider
10:45 base of competition than they would have in the past.
10:47 And the simple fact is that there are only so many of these jobs to go around.
10:51 But at the same time, the men in roles that don't require a college
10:55 degree haven't had the same increase in competition.
10:57 This isn't a new trend.
10:58 Before the pandemic shook up a lot of this data,
11:01 male college grads had an unemployment rate of around 5%
11:04 while their non-graduate peers had an unemployment rate of 6%.
11:08 Female college graduates at the same time had an unemployment rate of around 3%.
11:12 But their non-graduate peers also had 6% unemployment,
11:15 so the gap was much wider.
11:17 Now, it's important to point out that there have been similar programs
11:20 to try to get men into historically women dominated graduate fields too,
11:25 especially nursing, age care, and elementary school teaching.
11:27 But overall, they have been less successful.
11:30 Now, there are a few reasons for this.
11:32 If we were being completely honest with one another,
11:35 there is still a stigma around this.
11:37 A woman landing a role as an engineer or office
11:40 executive is seen as empowerment where a guy becoming a nurse
11:42 is still the butt of the joke and an elementary
11:45 school teacher is the target of suspicion and raised eyebrows.
11:48 It absolutely should not be like this and it is
11:51 getting better but it's silly to pretend it doesn't exist.
11:54 The second reason is that historically these roles have
11:56 not paid as well and men have generally been attracted
11:59 to more lucrative careers either because they need to support
12:02 a family or simply because that's what they valued.
12:05 The job market has changed faster than those cultural expectations,
12:08 which is why men seek out more typically prestigious jobs.
12:11 This current gap is a reflection of that reality.
12:14 Safe, stable jobs like nursing are doing really well
12:17 in a bad time thanks to an aging population while we
12:19 are on the tail end of trendy jobs that would
12:22 have made a lot of money in a better environment.
12:24 This also explains why unemployment amongst non-oled
12:27 educated men has been pretty stable because construction,
12:30 the trades and other semi-skilled jobs have been
12:33 pretty stable between increased home construction and infrastructure.
12:35 You can also see the beating they took
12:38 after construction slowdowns from the global financial crisis,
12:40 which were not nearly as bad for their college educated peers.
12:44 Now, these differences hurt women in the workforce, too.
12:46 When women do go into these trendy fields like technology,
12:49 they actually tend to do worse when it comes to downsizing.
12:52 A study on the recent round of tech layoffs sweeping the industry found
12:56 that women accounted for 44% of job
12:58 losses while only representing 28% of the workforce.
13:01 Now, the companies obviously didn't release comprehensive data
13:04 on why they chose to lay off who.
13:06 But generally, there are three explanations for this.
13:08 The first is that these companies may have hired evenly,
13:12 but they still segregated genders within different departments,
13:14 hiring more women for jobs in HR,
13:17 marketing, corporate culture, and internal development.
13:19 These are coincidentally the first departments to get cut in downsizing.
13:23 The second explanation is that in some ways cultural expectations work for men.
13:27 They are seen as a breadwinner supporting a family where
13:30 the #girl boss is more likely to land on their feet.
13:33 This is another example of something that employers should clearly not be doing.
13:37 But women are consistently judged more harshly
13:39 in high performing roles compared to men.
13:42 Unfortunately, this often happens particularly from other
13:44 women who disproportionately work in departments like HR,
13:47 which can have a lot of sway over layoff decisions.
13:50 The third crude explanation is that hiring
13:52 practices that targeted a diversity objective over just
13:55 hiring the best person for the job favored
13:58 people who would underperform compared to their peers.
14:00 So, when performance-based layoffs were conducted,
14:02 these people were more likely to be below the cutoff.
14:05 It's no secret that a lot of the cultural forward companies have built
14:08 a hard 180 on a lot of these initiatives in the last year.
14:11 Now, I am sure you can probably tell, but I am trying to be really careful about
14:16 sidest stepping the whole culture war rabbit hole here.
14:19 But it's still important to acknowledge these realities when
14:21 looking at these issues because even though it shouldn't,
14:24 it will have a big impact on everybody's career.
14:26 One of the best things to do
14:28 with this information is to use it to your advantage.
14:30 Despite the stigma, one of the safest groups from trouble
14:33 in the job market are men in previously female-dominated fields.
14:37 Fields like healthcare already have a low unemployment rate,
14:40 and men often find it particularly easy
14:42 to get these roles because of the practical
14:44 realities that they can more easily do
14:45 a lot of the physical work these roles involve.
14:48 This was dubbed the glass elevator effect all the way
14:51 back in 1992 in a University of Texas article.
14:53 It found that men often found it much easier to progress in these roles.
14:57 And even though initial salaries were lower compared to male-dominated fields,
15:01 after accounting for the higher chance of career progression,
15:03 the lifetime earning shifted back into their favor.
15:06 Now, obviously, don't pick a job because of some video on the internet.
15:09 Healthcare and teaching are no joke,
15:11 but also don't let some business school douchebag talk you out
15:14 of it because chances are you will end up earning more than them.
15:18 Unfortunately though, this is only true to a point.
15:20 A study out of Sweden found that the top earners have
15:24 lower intelligence than the people in income levels directly below them.
15:27 The plateauing of cognitive ability among top earners drew on data
15:31 from 59,000 men who had to take
15:33 a compulsory military conscription aptitude test.
15:35 It then tracked their earnings over their professional
15:38 careers to find the relationship between intelligence and income.
15:41 Oh, wait.
15:42 This is interesting.
15:43 And before Tai Lopez gets any ideas
15:46 for more shitty YouTube commercials or the hustle bros
15:48 learn how to read journal articles and use
15:50 this to encourage people to drop out of college,
15:52 I want you to know how this data really works.
15:55 The relationship between intelligence and income was strong.
15:57 Smarter people earned more money,
15:59 but only up to 670,000 Swedish crona or $64,000 per year.
16:04 After that, intelligence didn't mean much anymore.
16:07 And at the very top end of income earners,
16:10 the 1% dumber people actually did better.
16:13 We made all that today.
16:14 Well, it was twice as much, but I had to bail out Cinnamon's kids.
16:18 Thanks, Mr.
16:18 Peter.
16:19 This guy's the best.
16:20 So, is this a sign that watching Tik Tok and reality
16:24 TV is actually better for your career than going to college?
16:27 Well, maybe actually for two important reasons.
16:29 But there are also two reasons why you should probably ignore
16:32 this and keep studying hard if you want to get ahead financially.
16:35 Reason number one why dumb people are doing better than smart people is
16:39 that smart people fill in high prestige jobs that don't have high salaries.
16:42 Academics and research scientists are some of the smartest people in the world,
16:46 but they don't get paid well.
16:48 Guys like yourself.
16:49 Yeah.
16:50 How come I could be successful?
16:51 Okay.
16:52 Well, you could be a lot more successful if you had 30 points less IQ.
16:55 Doctors, lawyers, and elite financeers also need to be
16:58 very smart to get through demanding schooling and admissions exams.
17:01 And these professionals are typically compensated very competitively.
17:04 But most of them don't make it all the way to the 1%.
17:07 In the USA, to be in the top 1% of income earners,
17:11 an individual needs to make at least $597,000 before tax.
17:14 And that's just the minimum to join the 1% club.
17:17 The average member of the 1% earns $1.4 million before tax.
17:22 Some senior executives, certain doctors, lawyers,
17:25 and even bankers can earn this much money, but they are in the minority.
17:29 Most people making this much money are business owners,
17:31 and there is less of an intelligence barrier to becoming a business owner
17:35 compared to the genius level intellect a person needs to become a top surgeon.
17:38 Business owners earning over half a million dollars
17:40 a year in income still need to be smart,
17:43 but they don't need to be as smart as the very few
17:45 types of workers that an employer would be willing to pay that much.
17:48 You do not have to be smart to make money.
17:52 People that are highly intelligent and have a desire
17:54 for high income are also at a slight
17:57 disadvantage to people that are only moderately intelligent
17:59 and equally have a desire for high income.
18:01 Highly intelligent people that follow well-compensated
18:03 career paths are less likely to make
18:05 the transition to business ownership because they will reach a level of income
18:09 that they are satisfied with and won't want to take the risky step
18:12 of giving up their well-paid job to start
18:14 a business that might not even succeed.
18:16 Moderately intelligent people with desire for high incomes
18:18 on the other hand won't have as many opportunities to make incomes in the top
18:21 percentiles unless they go into business for themselves.
18:24 So they are on average more willing
18:25 to take the risk because they won't be giving
18:27 up a career that was difficult to get
18:29 into and equally difficult to get back into.
18:32 No, no, I am not going anywhere until you
18:35 or one of your butlers or bimbos writes me a check.
18:38 So by looking at the data, if you want to be wealthy,
18:41 the best thing you can do is to be
18:43 moderately intelligent with a lot of ambition, right?
18:45 Well, as the great Mark Twain said, there are three types of lies.
18:49 Normal lies, damn lies, and statistics.
18:50 Let's say all you care about is making as much money as possible,
18:54 and you are trying to pick what person you want
18:56 to be to give you the highest chance of achieving that goal.
18:59 The first problem that you will have if you try
19:01 to plan your career around replicating the success of people
19:03 in the top 1% is all of the statistical complications
19:06 that come with inferring outcomes based on data like this.
19:09 The ceiling effect is what happens towards the extremities of data
19:11 sets that are drawn on a scale like percentiles of wealth.
19:14 If a class of 10 students got given
19:17 a 100 question surprise quiz and three students
19:19 in the class got perfect scores and the seven
19:21 other students got a random mix of scores,
19:23 a statistician could conclude that a perfect score was the easiest
19:26 result to get because it's the result that happened the most often.
19:30 No matter how smart the students taking this quiz are,
19:32 they can't get more than a perfect score.
19:34 No matter how high someone's income is, the top 1% is the top of the scale.
19:39 If two of the three students with perfect
19:41 scores were the smartest people in the class, and the third student was average,
19:44 but just cheated on the quiz by copying the top student in the class,
19:47 the average intelligence of the students with perfect scores would be
19:50 lower than the intelligence of the student who got 99 questions right.
19:53 Most people earning in the top 1% are very smart,
19:56 but their average is brought down by the people like the Kardashians.
19:59 Dude, I am so disillusioned right now.
20:01 Most people in the top 2% are also very smart,
20:04 but they don't have outliers stuck to the ceiling bringing down their average.
20:07 Less intelligent people earning the most money out
20:10 of a population also have a problem with survivorship bias.
20:13 A person of average intelligence starting
20:15 a business for themselves is statistically very
20:17 likely to fail and end up in the lower end of the income range.
20:20 At that point, they can either try and start
20:22 another business or go back to a regular job.
20:25 If they are successful though,
20:26 a business doesn't need to get that large before it can generate
20:29 enough profit to put the owner in the top 1% of earners.
20:32 A highly intelligent person starting a business
20:34 will have slightly better odds of being successful,
20:36 but statistically it's still likely to fail.
20:39 Because there are less highly intelligent people
20:41 than there are people of average intelligence,
20:43 there are going to be more successful businesses
20:45 run by average people than run by intelligent people.
20:48 And if you remember, highly intelligent people already earning good
20:51 money in a position as an employee
20:52 are less likely to start a business of their own in the first place.
20:55 They're even less likely to end up
20:57 as a successful or unsuccessful business owner.
20:59 There will also be many more business
21:01 failures owned by people of average intelligence.
21:03 But because only the businesses that survive
21:05 get counted in the 1% of income earners,
21:08 it changes the expectation that the best way to get
21:10 rich is to be a business owner of average intelligence.
21:12 The second problem with interpreting this study and all of the other studies you
21:16 hear about is that the traits
21:18 of wealthy people goes well beyond just statistics.
21:20 To begin with, this study was conducted on men only.
21:23 Men have different career earnings and work in different vocs than women.
21:26 So the results could be very different if
21:28 the other half of the population was included.
21:30 Does that make sense?
21:31 You see you see the difference.
21:33 Measuring intelligence is very difficult and a military entrance exam is more
21:36 likely to be focused on the type of intelligence that would make people
21:39 good at following orders like comprehension
21:41 rather than freethinking and creative intelligence
21:43 that would provide a competitive advantage
21:44 in the boardroom but not on the battlefield.
21:46 The study was also done in Sweden.
21:48 And I know thanks to the invasive power of Google's
21:51 data collection that only.9% of you watching are Swedish.
21:56 USA.
21:56 Personal finance and careers in Sweden are different from here
22:00 in the States because they have stronger welfare and worker protections.
22:03 They also pay lower salaries on average to top employees.
22:06 Sweden is also surprisingly more entrepreneurial than the States.
22:09 It has 20 startups per 1,000 people, while America only has five.
22:14 So, what does this mean?
22:16 Basically, this means to get into the top 1% where the study was done,
22:19 you need to be a successful business owner.
22:21 But in most other places,
22:22 there is a high chance that you will get there with one
22:24 of the extremely well-paid jobs that go to extremely intelligent people.
22:28 It's starting to look bad for the dropout of college hustle bros.
22:31 And that's before even considering other things
22:33 that can give people a high income.
22:35 Some people get a high income not because of luck, intelligence, or hard work.
22:38 They get it because they are a nepo baby and have
22:41 family connections which can land them a job that pays well.
22:44 As unfair as it may be to someone without these advantages,
22:47 giving rich kids with connections jobs can be worth it
22:49 if they keep using their connections to bring in more business.
22:51 Some of these privileged individuals will be smart, some of them not so smart.
22:55 But they won't need to be as intelligent as a top doctor to earn
22:58 their money so they will bring down the average of the percentile they land in.
23:02 So before that you think that this whole investigation was just a big waste
23:05 of time and that it doesn't reveal the secret to becoming a member of the 1%,
23:09 you should know that it actually does.
23:10 Let me show you how.
23:12 There are some factors that can put dumb
23:13 people in the 1% that you can't control.
23:15 You don't get to choose if you are born to a wealthy family
23:18 that can get you a fancy job by calling in a few favors.
23:24 Like um a little 100 mil.
23:26 A little 100 mil.
23:28 Yeah.
23:28 You can also only do so much
23:30 to control whether your business is highly successful,
23:33 just breaking even or a complete failure.
23:35 A lot of it is just luck.
23:36 You know what?
23:37 Who gives a[ __] But here is something else.
23:40 You can't 100% control how intelligent you are either.
23:43 You can practice certain skills, learn new things,
23:46 but some people will be able to absorb and apply knowledge better than others.
23:50 You can't copy traits and expect a similar outcome.
23:52 You have to be able to critically assess your strengths
23:55 and weaknesses and choose a career path that suits you best.
23:58 Rich people eat a lot of caviar and fly first class,
24:00 but flying first class and eating caviar won't make you rich,
24:03 just like being of average intelligence won't make
24:05 you a member of the 1% by itself.
24:07 The first real step is to work out what you are good at and what you are bad at.
24:11 This may involve admitting to yourself that you
24:13 are not as smart as you think you are.
24:15 It might hurt your ego,
24:16 but being honest with yourself about your weaknesses will bring you
24:19 much further than believing you're good at things that you're not.
24:22 Highly competitive industries reward high performers,
24:24 but they are also equally punishing underperformers.
24:26 Becoming a doctor will almost guarantee an upper middle class
24:30 or upper class income for the rest of your working life.
24:32 But failing out of med school will leave
24:34 you with hundreds of thousands of dollars of student
24:36 loans that will put you far behind people
24:38 who are more realistic with their career ambitions.
24:40 An electrician that does the best work in their area and has a good reputation
24:44 with builders and businesses will make more money
24:46 than a lawyer that is average or below average.
24:49 That doesn't mean drop out of college.
24:51 It means be honest with yourself about what marketable field you could excel in.
24:54 And do that instead of trying to chase career paths
24:57 that just have a reputation for earning a lot of money.
24:59 because if you do, you might end up like the people that rush into tech
25:03 jobs to chase big paychecks just before
25:04 the biggest companies in the space announced record layoffs.
25:07 But the thing is, that's precisely what a lot
25:10 of people did just a few short decades ago.
25:12 And now their chickens are coming home to roost with predictable consequences.
25:16 Before the year 2000,
25:17 if you wanted to make a lot of money in a predictable career,
25:21 you needed a nice suit and an important looking business card.
25:25 Your options were finance, medicine, law,
25:27 or senior company management if you were lucky.
25:30 But then just a few years later, at around the same time as those people
25:34 in fancy suits were blowing up the global economy,
25:36 a new breed of millionaire was entering the mainstream.
25:39 They replaced their puffer vests and Bloomberg
25:42 terminals with flip-flops and Vim terminals.
25:44 Tech bros worked fewer hours, had better perks,
25:47 and in many cases made better money
25:49 than their peers in more traditional high-income roles.
25:51 What's more is that people didn't hate them.
25:54 Executives, bankers,
25:55 and their fancy lawyers were blamed for enriching themselves
25:58 by leeching off a broken system that cost people their homes,
26:01 their jobs, and their futures.
26:02 Meanwhile, people loved the idea of hackysack playing nerds
26:05 making millions by actually making stuff that improved our lives.
26:09 But now, 15 years later,
26:11 the tech bros became everything they promised to destroy.
26:14 And they kind of destroyed themselves in the process.
26:17 At their peak, tech bros enjoyed endless career progression opportunities,
26:20 options packages that can make them multi-millionaires before they were 30.
26:23 a good work life balance and the promise that if they knew how to code,
26:27 they would always be guaranteed a good job.
26:30 Today, they are being forced back
26:31 into the overpriced cities that don't want them there.
26:33 They are being laid off in mass,
26:35 and the ones that remain are being told to grind,
26:38 and they have apparently made programs so good that their CEOs are
26:41 gleefully talking about a future where
26:43 entry-level programmers are completely replaced by AI.
26:45 Between the golden age and the dark ages of tech bros,
26:47 there have been three major changes that both
26:50 caused their massive rise and their current fall.
26:52 The first problem was that they simply ran themselves out of business.
26:56 On Friday the 10th of March in the year 2000,
26:59 the NASDAQ hit its then all-time peak.
27:01 Investors were all in on companies that were
27:03 ready to take advantage of the internet.
27:05 And the speculative mania was so fierce that just the mention of dot
27:08 in their company filings was enough to send their stock price soaring.
27:12 Eventually, this all collapsed and only a select few
27:15 companies from that era have survived to this day.
27:17 The reality was that the internet was an amazing technology that would go
27:20 on to change our lives and facilitate
27:22 some of the most valuable companies in history.
27:24 But just putting a normal business on a website wasn't actually revolutionary.
27:28 What came after was a genuine golden era of tech services.
27:33 The companies that survived the do-com bubble were
27:35 actually useful and the cleansing of the market meant
27:37 that more talent and investment could go towards
27:40 supporting companies that actually did provide a good service.
27:42 Early YouTube, MySpace, Facebook, Amazon,
27:45 and online gaming were all novel and genuinely great
27:48 services that if you are as old as me,
27:50 you probably remember finding them absolutely amazing.
27:52 There was still money flowing into them,
27:54 and the tech sector wrote out the global financial crisis better than most.
27:58 The first iPhone was released in 2007,
28:00 and even at the height of layoffs and corporate bankruptcies in 2008,
28:04 people were still lined up around the block to buy the iPhone 3G.
28:07 You were told that if you learned how to code, you would be sure of a good job.
28:11 And at the same time,
28:12 companies like Apple and Google were being named as the most
28:15 desirable places to work thanks to their relaxed corporate attitude,
28:18 excellent work life balance,
28:20 amazing employee perks, and surprisingly competitive salaries.
28:23 Most importantly, these companies were still not the establishment.
28:27 They were scrappy startups making products that people actually enjoyed.
28:30 After the.com crash,
28:31 it took the NASDAQ over 15 years to recover from its previous peak.
28:35 This meant that thanks to employee stock options,
28:38 these mid2000s tech bros were making good money.
28:40 But they would likely still be out earned by their finance bro peers,
28:44 assuming they weren't laid off in 2008.
28:46 That slowly changed though, and as these companies grew,
28:49 more money flowed into the industry.
28:51 And with more money came more workers, bigger bonuses, stock options,
28:55 and it went from an alternative industry
28:57 filled with nerds making products that people enjoyed
28:59 to the industry making products that would
29:01 secure funding from a growing pool of investors.
29:03 They went from the business of adding
29:06 value through technology to extracting value through monopolies.
29:09 For a while, you could have a great degree of confidence in becoming filthy
29:12 rich by putting in a few years at a major Silicon Valley tech company.
29:16 But all this relied on a stream of money that wasn't coming from nowhere.
29:19 Venture capital, the firms that actually invest
29:22 in earlystage startups to develop their new technology,
29:25 never again actually reached the level
29:27 of funding it did during the dotcom bubble.
29:29 That was until something changed in 2021.
29:33 As tech companies grew larger and more valuable,
29:36 the rush to hire more talent heated up.
29:39 By the mid2010s, if you had a talented developer,
29:41 you could easily out earn any other career out
29:44 of college by working for a company like Facebook,
29:46 Apple, Amazon, Netflix, or Google, the so-called fang companies.
29:50 These businesses all had established platforms,
29:52 but they still hired tens of thousands of developers
29:55 and paid them very well for a few reasons.
29:58 The first was that they were constantly trying
30:00 to add new features to their core offerings.
30:02 And even maintaining a platform like YouTube takes a lot
30:04 of work to keep up to date with customer demands.
30:07 The homepage of the site today looks very different from even 5 years ago.
30:11 There was also an exuberance where newer companies like Uber,
30:15 Airbnb, Twitch, Snapchat, Tinder,
30:16 and even Weiwork were scaling their operation so fast
30:19 that they would hire developers before they even had
30:21 a defined project for them to work on because
30:24 hiring when they actually needed staff would slow them down.
30:26 This was part of a relatively new tech industry strategy called blitzcaling.
30:30 A not so subtle reference to the blitzkrieg of World War II,
30:33 which was all about capturing as much territory as possible
30:36 as quickly as possible using new technology before the enemies could respond.
30:40 Supply lines couldn't keep up.
30:42 But the hope was that once a territory was captured,
30:45 the German army could sort all of that out later.
30:47 Now, clearly tech companies are not rolling tanks through Belgium,
30:50 but they are using the scalability of technology
30:52 to capture market share in industries like food delivery,
30:55 taxis, holiday rentals,
30:56 and online dating as quickly as possible and then sorting out
31:00 things like what to do with all their staff later on.
31:03 In an interview published by the Harvard Business Review, Reed Hoffman,
31:06 a Silicon Valley venture capitalist and one
31:08 of the founders of PayPal and LinkedIn,
31:10 said that companies that are blit scaling may need to get as many
31:13 warm bodies through the door as possible as quickly as you can.
31:16 Another reason why tech bros are being hired
31:18 as quickly as possible was that hiring lots of staff was a great way to make
31:21 sure that they couldn't go to potential competitors,
31:24 especially startups that could, and I I really hate to say
31:28 this, but disrupt the industries of the big incumbent players.
31:32 Acquiring competitor companies as they start to take market share
31:35 could get companies in trouble with the FTC for anti-competitive practices,
31:38 but there were no rules against denying them to staff that they
31:42 would need to get their business going in the first place.
31:44 A report by the Wall Street Journal
31:46 interviewed tech workers who admitted to being hired
31:47 to do nothing at all and that the businesses
31:50 were hoarding developers like Pokémon cards.
31:52 That made it all worse when high interest rates, reduced market certainty,
31:55 and lower customer demand for a lot of these tech
31:58 products resulted in mass layoffs across the industry.
32:01 Businesses that were blit scaling either shut down or shifted
32:04 gears to only hire workers they really actually needed.
32:07 New feature development slowed down and big
32:09 established companies didn't need to worry
32:11 about hoarding workers away from their competitors
32:13 anymore because nobody was hiring.
32:15 Artificial intelligence is also already doing a lot
32:18 of the grunt work that is typically given to new employees.
32:21 Tech companies by their nature are more
32:22 open to adopting these new technologies and even
32:25 replacing just a handful of entry-level developers
32:26 can save companies millions of dollars every year.
32:29 So, it really is an ideal environment for automation.
32:31 This was the second major blow to the tech bros.
32:34 They traded in the promise of a very stable career
32:37 for something that has become an incredibly risky game of survival.
32:40 You can make a lot of money in technology,
32:43 but your success is going to depend just
32:45 as much on picking the right company or startup
32:47 at the right time to vest in as it is on your own personal skills development.
32:51 An entry-level developer that started working with Intel 5 years ago had a good
32:55 chance of being laid off last month
32:57 with stock options that are worth absolutely nothing.
32:59 A similarly skilled developer that took a job with Nvidia at the same time,
33:03 on the other hand, probably never needs to work again in their life.
33:06 The ones that got lucky go out.
33:07 And the ones that got let go are
33:10 sick of playing the stock market with their careers.
33:12 If they wanted to do that, they would have become finance bros.
33:15 And then there's the biggest problem of all.
33:18 Workers want to be close to job opportunities
33:20 and companies want to be close to workers.
33:22 So the whole industry has elomerated in just a handful of locations.
33:26 These cities have become incredibly expensive,
33:28 and infrastructure has not been able to scale as fast as these companies,
33:32 which means it's not unusual for tech workers making six figures
33:35 to share a two-bedroom apartment with three other highly paid local workers.
33:39 Ask me how I know.
33:40 If you are a tech worker struggling to afford
33:42 a place to live on a six-figure salary,
33:44 then there is basically no hope for other workers in these cities,
33:47 which are still essential to keep society functioning.
33:49 As a result, big tech cities have not only become expensive places to live,
33:54 they've also become not particularly nice places to live.
33:57 Remote work could have alleviated these issues
33:59 by easing demand in these small markets.
34:01 But the big tech companies now have a lot more negotiating
34:04 power over workers who don't want to be another layoff statistic,
34:07 and they are using that power to mandate a return to office.
34:11 Even Zoom, the company developing remote working solutions,
34:14 has pulled its teams back into the office.
34:16 These problems also don't come with many upsides for locals.
34:19 The big sell is that these companies offer great jobs,
34:22 but most of these jobs go to people who are not local and only move
34:25 to the city after they secure a role
34:27 and then compete with locals for housing and other services.
34:29 I personally moved to San Francisco from out of state
34:32 after I got a job at an investment bank.
34:34 So even though I was technically a finance bro,
34:37 I was still very much a part of the problem.
34:39 Other areas have gone from welcoming tech companies opening up
34:42 operations in their cities to actively pushing back against it.
34:45 And this all represents a trend which
34:47 is way larger than just gentrifying entire cities.
34:49 People just straight up don't like the tech industry anymore.
34:53 You might think that states might reverse
34:55 course and go back to encouraging good,
34:57 honest, stable manufacturing businesses instead.
34:59 But I've got bad news for you.
35:03 Manufacturing is just not coming back.
35:05 So the reason that manufacturing jobs have become
35:08 so desirable all over again is actually pretty simple.
35:11 In the past, the most reliable opportunity for men without a college
35:15 degree to earn an income that could support a family was in manufacturing.
35:19 Fast forward to today, and record numbers of people with a college
35:22 degree are still struggling to find work.
35:25 Very few jobs can comfortably support a family by themselves,
35:27 and areas that do have high-paying
35:29 jobs are unrealistically expensive to live in.
35:31 It's made a lot of people realize that maybe the old factory job wasn't so bad.
35:36 Back in the good old days, the way it worked was that most people
35:40 in a manufacturing business would work on the factory floor.
35:42 Above them would be a smaller group of supervisors with practical
35:45 experience that could make sure everybody was doing their work correctly.
35:48 And above them, sitting in a separate
35:51 office were the college educated specialists
35:53 and executives responsible for designing new products
35:55 and setting the direction of the company.
35:57 But eventually we figured out that these jobs up
36:00 here were way better than these jobs down here.
36:02 So what if everybody could just do these ones?
36:06 Globalization, automation, outsourcing,
36:08 and tech services meant that instead of working on the factory floors ourselves,
36:11 we could give those jobs to low- paid workers on the other
36:14 side of the planet and move up into management positions.
36:17 We made the world our factory floor,
36:19 and the American workplace became the office overseeing and managing it.
36:23 This was actually a pretty sweet deal because, hot take alert,
36:26 but a lot of our factory jobs kind of suck.
36:29 If we could work all of the old jobs that the executives used to work,
36:33 this would have been an incredible opportunity.
36:35 But of course, it didn't work out like that for two simple reasons.
36:38 The first reason is that we found out there isn't
36:41 actually that much space at the top of the pile.
36:43 Go back 40 years and the average
36:45 office wouldn't know what a culture coordinator,
36:47 corporate wellness manager, diversity and inclusion officer,
36:50 social media manager, brand ambassador, or sustainability consultant even was.
36:54 There are lots of extremely common jobs
36:56 in modern offices that didn't exist 20 years ago.
36:59 Part of this is due to technology.
37:02 You can't coordinate social media if it doesn't exist.
37:04 But a lot of it has been in response to finding more jobs for people to fill.
37:09 Regulations, best practices,
37:10 and modern initiatives have given modern workplaces more boxes to tick,
37:14 which has meant more people in service jobs.
37:15 But it means that the average value created by those service jobs has gone down.
37:19 This white collar inflation means that today the people
37:22 working the jobs back down at the bottom
37:24 of the pyramid have kept up or exceeded most
37:26 of the people trying to squeeze in up here.
37:28 The second issue with making the entire economy
37:30 white collar is that eventually the countries that we
37:33 outsourced the bottom of the services pyramid
37:34 to wanted to make their own white collar jobs.
37:37 For the last 30 years, American companies have outsourced manufacturing
37:40 to China because it was so cheap.
37:42 But China has now taken those technical expertise and used
37:45 it to build their own companies that are just as good,
37:48 if not better, than the American businesses that they
37:50 have used to do the grunt work for.
37:52 What this means is that 30 years ago,
37:54 it was factory workers fighting off global competition for their jobs.
37:58 Today, it's everybody.
38:00 The solution is to bring back manufacturing and build
38:02 the pyramid back up again with a solid foundation.
38:05 It honestly seems sensible,
38:06 except for the part where it totally misses the point.
38:10 Now, sit down.
38:11 What I'm about to say might come as a shock to you, but America is not special.
38:16 We were not the only country to do the old service job switcheroo.
38:20 Other advanced economies like those in Europe, Canada,
38:22 and Australia also outsourced a lot of their manufacturing.
38:25 And some of them went even harder than we did.
38:28 Australia, which used to have a large manufacturing
38:30 industry producing advanced products like automobiles and aircraft,
38:33 has lost all of its major companies.
38:35 And according to their own department of jobs and skills,
38:38 the largest manufacturing industry by employment today is baking.
38:41 Don't worry, I didn't forget that video on Australia is coming soon.
38:46 So, you know, subscribe because that place has some problems.
38:50 Even the countries that we outsourced to ended up outsourcing.
38:54 South Korea, Japan, and even China have started
38:56 to wake up to the problems that they have
38:59 caused for themselves by outsourcing the jobs that actually
39:02 make the stuff to the lowest global bidder.
39:04 And now everybody is in a desperate race to reverse course.
39:07 Robert Lawrence, a trade and investment professor at Harvard University,
39:10 recently wrote about this, arguing that this whole reversal was futile at best.
39:15 Behind the curve, can manufacturing still provide inclusive growth?
39:19 Looks at how these jobs used to be able
39:21 to provide a good quality of life to average American families
39:23 and how our nostalgia for that time has made us
39:26 all focus on our jobs instead of the conditions surrounding them.
39:29 It doesn't matter if you forge engine blocks
39:31 by hand or file TPS reports in a cubicle.
39:34 You are still exchanging your time and expertise for a paycheck.
39:37 The reason that manufacturing jobs look so good
39:40 by comparison now is down to two important factors.
39:42 The first big advantage they had was that they remained unionized.
39:46 In the past, union efforts fought for pay and benefits of workers here
39:50 at the bottom of the pyramid against the people up here at the top.
39:53 As the population moved into white collar jobs in the service sector,
39:56 we convinced ourselves that we were the management.
39:58 Which is why, with the exception of a few special industries,
40:01 if you sit behind a computer for a living,
40:03 you are much less likely to be a part of a union.
40:06 In just the past 5 years, unions representing auto workers, doc workers,
40:10 and UPS drivers had negotiated pay and benefits that split opinions
40:13 across the country because they were so generous it almost seemed greedy.
40:17 The thing is though, if your income had also kept up with productivity,
40:21 these would still be lower middle- inome jobs
40:23 and office jobs would pay even better still.
40:26 The other thing that has made factory jobs
40:28 seem really attractive all of a sudden is
40:30 that factories naturally exist in areas that are cheap
40:32 because of the land that's required to build them.
40:35 Offices for high-end companies that can afford
40:36 to pay high-end salaries are almost always in very
40:39 expensive cities where you need to earn even
40:41 more to live a comfortable life without six roommates.
40:44 People are naturally much more likely to remember what someone does
40:47 for a living than what
40:49 the macroeconomic factors surrounding their employment are.
40:51 So instead of focusing on making cities affordable,
40:54 pushing for worker representation, or just offering workplace protections,
40:57 it's become easier to just talk about bringing back factory jobs.
41:01 Now both sides of the aisle are
41:03 absolutely guilty of pushing this oversimplistic solution.
41:05 And politicians are making the same promises outside of America, too.
41:09 tariffs, build back better, the chips act, bailouts,
41:12 and massive incentives all have the intention of creating
41:15 or at the very least maintaining manufacturing jobs.
41:17 But in his book, Lawrence has argued
41:19 that this is probably just going to backfire,
41:21 and it could actually make a lot of problems worse.
41:24 These big government programs ultimately amount to giving a lot
41:26 of money to companies so they can create manufacturing jobs.
41:29 But not even America can fight the force of the global economy.
41:33 Instead of making money more inclusive and providing
41:36 opportunities for semi-skilled workers to keep up,
41:38 these programs have largely worked to funnel money
41:40 into the hands of investors and business owners.
41:42 They also ignore the small problem that people have already moved on.
41:46 After decades of being told to upskill and go to college,
41:49 people have upskilled and gone to college.
41:51 And the worst part is that there are now too many
41:54 educated people and not enough real jobs for them to do.
41:58 Peter Turchin is a complexity scientist who
42:01 mathematically models statistical dynamics of historical societies.
42:03 He coined the theory of elite overp production.
42:07 He argues in his books and papers
42:09 that societies make workers just like they make anything.
42:11 A car goes through a factory and a college
42:14 graduate goes through a few decades of schooling.
42:16 At the end, you get something that you can drive
42:19 around in and something that can make pivot tables in Excel.
42:21 The only difference is that a lump of steel doesn't care if
42:24 it's turned into the engine block of a Bentley or a Buick.
42:27 But people given the option will naturally opt
42:30 for more prestigious careers if they are available.
42:33 Turin's work effectively argues that roles
42:35 in all societies form something of a hierarchy
42:37 with fewer actual people required to do the jobs further up the pyramid.
42:41 We need a lot more tradesmen, nurses, teachers,
42:43 and laborers than we need so-called elite roles like corporate executives.
42:47 By their nature, these roles only exist to watch
42:50 over the work of dozens of other people.
42:52 But for a variety of reasons,
42:54 too many people have been directed into getting qualified for these roles
42:57 up here and discouraged from doing these roles down here.
43:00 This is how you end up in a system
43:02 where everybody is qualified to deliver a stakeholder
43:05 engagement deck to synergistically blitzcale a business-to- business
43:07 platform for ingesting marketing survey data from the cloud,
43:11 but you can't find anybody to fix your plumbing.
43:13 We have simply trained too many people to fill too many
43:16 elite roles and not enough people fill the everyday roles of society.
43:20 This has cost us a lot in more ways than you might realize.
43:24 And the first is just the cost.
43:26 I know that you are all well aware of the cost of attending college,
43:30 but there is more to it than just the student debt that you're
43:32 going to take on to land your first job in the cubicle farm.
43:35 If everyone gets a college degree, which qualifies them for a prestigious job,
43:39 then those qualifications aren't special anymore.
43:42 According to data from the US Census Bureau and compiled by Statista,
43:45 the number of Americans with a college degree has increased
43:49 from 7.7% of the population in 1960 to 37.7% today, an almost six-fold increase.
43:55 The remaining 62.3% of the population are not
43:59 all going to be blue collar workers either.
44:02 According to the Bureau of Labor Statistics,
44:05 only 62.6% of Americans work at all.
44:07 So more than half of the workforce holds a degree.
44:10 A degree is not enough to stand out anymore.
44:13 It's barely enough to land a job at all.
44:15 So, people are getting more degrees to prove they are worthy of an elite role.
44:18 The price of a college degree has gone up and its value has gone down.
44:23 But, people are still willing to take on lifealtering amounts of student
44:25 debt to get them so they can access a job that is prestigious.
44:29 The ironic thing is that many bluecollar
44:31 trade jobs actually pay much better than
44:33 even mid-level corporate roles because there is
44:35 a shortage of these non- elite workers.
44:37 So they have much more negotiating power in the real
44:40 market than a history PhD applying for a research role.
44:43 Sorry Sam from how history works.
44:45 Despite this, most people still agree that someone sitting behind
44:48 a desk is more elite than someone working with their hands.
44:51 So given the choice, they would rather work in an office.
44:54 You knew all of this already.
44:56 Colleges have been pumping out graduates for decades now.
44:58 But what is interesting is what happens to the people that are left over.
45:03 Eventually, there are only so many roles that can be
45:05 done in a suit and tie in a nice office,
45:07 which means some of these elitequalified individuals will be left
45:09 behind to work jobs that they are completely overqualified for.
45:12 Under employment is already a major issue in America.
45:16 Highly paperqualified people are working casual jobs with bad
45:19 pay and fewer benefits because they don't want
45:22 to get a blue collar job because that would
45:24 be admitting that their expensive degree was useless.
45:26 Turjan in his book End Times has likened the glut of people who
45:29 are too qualified for the job to the accumulation of deadwood in a forest.
45:33 It doesn't do anything by itself,
45:35 but if anything goes wrong, it will cause a cataclysmic fire.
45:38 I will leave a link to his book in the description below.
45:41 If you like depressing videos like this, it's definitely worth the read.
45:45 Turin has likened our current period
45:47 of elite overproduction with the late Roman Empire,
45:50 the French Wars of Religion, and various Chinese dynasties.
45:53 But America and the rest of the Western world has
45:56 had one sneaky advantage over these other low energy empires.
45:59 We have taken all of these non- elite jobs
46:01 that we didn't want to do and outsourced them overseas.
46:04 For a while, it let more of us work
46:07 in jobs that we could brag about on LinkedIn.
46:10 But that strategy may have come with some serious side effects.
46:13 One of the less serious impacts of a system that has
46:16 too many people qualified for too few elite jobs is title inflation.
46:19 If you can't find a senior role for everybody
46:21 with an MBA from the University of Phoenix,
46:24 then you have to give them a fancy sounding title.
46:27 Salesmen are now account executives.
46:28 Receptionists are now directors of first impressions.
46:31 And marketers are brand presidents.
46:34 Job title inflation like this sounds extremely
46:37 dumb until you realize that it works.
46:40 A UK study found that 70% of workers would give up
46:42 a pay raise to get a job with a better sounding title,
46:45 with some forgoing as much as $10,000 to take a role that sounds more senior.
46:50 This study is very old now,
46:52 but one look at LinkedIn will show you that it hasn't gotten much better.
46:56 Now, while it's fun to laugh at goobers on LinkedIn,
46:59 the problems of elite overproduction as outlined
47:01 by Turin manifests in other areas as well.
47:04 As more people become qualified and expect to fill glamorous corporate roles,
47:08 it creates a political pressure to make sure that people get those roles.
47:12 The anthropologist David Greyber spoke about his role
47:15 of the box tickers in his infamous book,[ __] Jobs.
47:18 These were rules that only existed
47:20 to satisfy some arbitrary requirements overseen by other box tickers to give
47:24 the appearance that something useful was being done.
47:26 The best way to create these jobs
47:28 is through laws and programs that mandate them.
47:30 I made a video last year about the homelessness crisis
47:33 in America and why despite spending billions of dollars on it,
47:36 we are only making it worse.
47:38 One of the problems is that there were
47:40 thousands of jobs being created in various local,
47:42 state, and federal government departments alongside
47:45 nonprofits that paid workers very well.
47:47 With so many elite jobs on offer, there is no real incentive to fix the problem.
47:51 Because for the individuals running the programs,
47:53 they would have to find a new job.
47:56 And for the politicians approving the budget,
47:57 they would have to explain why thousands
47:59 of professional jobs went missing under their administration.
48:02 Now, I just wanted to shamelessly mention my old video,
48:05 but it's by no means limited to this one problem.
48:09 Millions of people across America are employed in some
48:11 kind of compliance role with a private company.
48:14 Some of these roles are incredibly important, some less so.
48:17 But if compliance standards are dropped,
48:19 then the politician who passed that law would have a lot
48:23 of potential voters angry that they made their job irrelevant.
48:26 Now, so far it all sounds like the blame
48:28 of elite overproduction ultimately falls on the people who thought they
48:31 were too good for a real job and felt entitled
48:33 to an elite position just because they got a communications degree.
48:36 That is not entirely unfair and there does need to be
48:40 a level of personal accountability for your own personal decisions.
48:43 But we have made it incredibly easy to follow
48:46 the path of least resistance into the pile of college graduates.
48:49 Striving for an elite job has also become
48:51 a necessity in many parts of the country.
48:53 If you want to live a comfortable version of the American
48:56 dream in most cities across the country these days,
48:58 you need to have an extremely good job.
49:00 More than a third of Americans earning
49:03 $250,000 per year are still living paycheck
49:05 to paycheck because the places where they
49:08 can access these elite jobs are ludicrously expensive.
49:11 The study unsurprisingly found that budget stress was
49:14 far higher amongst younger earners because the only consistent
49:16 way for them to earn that much money was to get an elite job in an elite city.
49:21 Blueco collar work can make a lot more than entry-level corporate roles.
49:25 But unless you can successfully start your own business,
49:27 the ceiling on how much you can earn in these roles is much lower.
49:30 In areas away from expensive cities, that's okay.
49:33 But if you grew up in a major city and you want to keep living there,
49:37 then you kind of have to play the game of fighting for an elite
49:40 job by working your way up the corporate
49:43 ladder or fighting through ultra competitive internships.
49:45 If you are successful, congratulations.
49:47 You can buy a Tesla Model 3 and rent a one-bedroom apartment in Seattle.
49:51 But if you are not, then you can contribute
49:53 to the biggest problem that Turin discusses in his writing.
49:56 People who have invested a significant amount of money,
49:59 not to mention years of their life into pursuing a role that they were
50:03 told they were entitled to, breeds a lot
50:05 of discontent when they end up undermployed.
50:07 These people who fairly rightfully feel scammed out of what they
50:11 were told was a guarantee are now a significant voting block.
50:14 That's created political pressure to not only maintain
50:16 as many of these nonsense jobs as possible,
50:18 but also to pursue student debt relief,
50:21 advance education subsidies, and retraining initiatives.
50:24 It might fix a lot of problems,
50:25 but there is no getting around the fact that it's
50:27 not exactly fair to people who have already paid
50:29 off their debt or never took them on in the first
50:31 place because they didn't pursue an elite career path.
50:34 Now, this is not to say that these are good or bad ideas.
50:37 It's only to say that they wouldn't even be considered if there
50:40 weren't so many people that have become trapped as an overproduced elite.
50:43 Enough people to make this politically viable.
50:46 Unfortunately, as the great DJ Calli would say,
50:49 we have played ourselves to get here in the first place.
50:52 Beyond the expense and tensions caused by having so
50:54 many people qualified to do rules that are inherently rare,
50:57 we have forgotten how to do the foundational stuff.
51:00 America's housing crisis is in part being
51:02 accelerated by the cost to build new homes.
51:05 Because we don't have enough tradesmen to keep
51:07 up with the demand for new housing.
51:09 The fact that housing is so expensive only makes this problem
51:11 worse because people see that the only way they will
51:14 ever be able to afford a home of their own is
51:17 to compete for an elite role with every other hopeful graduate.
51:20 We have also become more reliant on skilled
51:22 migration to fill the gaps in our workforce
51:24 which also drive more demand for housing and more
51:27 desire to be elite just to stay afloat.
51:29 Now Turin makes the argument that this is the single unifying
51:32 issue that has led to the collapse of all great civilizations.
51:35 That might be a bit of hyperbole to move some books,
51:38 but it does make it a little bit worrying when you
51:41 see the symptoms that he first warned about several decades ago.
51:44 But go and watch this video next to see why everyone is just
51:47 kicking the can down the road for someone else to deal with later.
51:50 And don't forget to like and subscribe to keep on learning how money works.