A new study argues that American workers in the manufacturing industry do better after attending trade school rather than college.
Josh Aizenman, the chair of economics at the University of Southern California, conducted research with academics from New Zealand to find out whether four-year college degrees are effective, CNBC reported.
In the past, the idea that people who attended college would go on to earn better wages was referred to as the college premium.
"There are serious questions about the future trends of the college premium," Aizenman told CNBC. "Providing cheaper and better vocational education and re-training will provide the marginal workers with useful options."
For many, the college premium no longer exists, and some even wind up losing money if the debt they build up while studying proves unsustainable.
"There are too many full-time colleges serving too many students, and too few institutions with greater focus on vocational education and training," added Aizenman.
After reviewing data from the World Wealth and Income Database, the OECD and Eurostat, the researchers found that the amount of vocational college places available relative to the size of a country's manufacturing industry may cut down on income inequality.
The researchers discovered that the availability of vocational courses could help cut the pay gap between unskilled and skilled workers.
They gave an example of this by carrying out a case study that compared the education systems in Germany and the U.S. The team noted that there were more workers in Germany with upper-secondary and vocational qualifications than in the U.S. Even though the number of people employed in manufacturing has declined in both countries, output in Germany has continued to remain high. The researchers concluded that Germany's education system is more suited to modern manufacturing.
"Chances are that better vocational education access and its quality in the U.S. would increase the income of the workers that are in manufacturing, and probably would reduce the overall income inequality in the U.S.," added Aizenman.
In September 1977, around 18.3 million workers were employed in the manufacturing sector, equating to about 18 percent of the population. As of September 2017, the figure has dropped to 12.4 million, approximately 8 percent of the population.
President Donald Trump pledged during the 2016 election campaign to reverse the decline in manufacturing jobs. He focused in particular on imposing stricter trade rules to make producers manufacture their products in the U.S. rather than overseas.
However, Scott Paul of the Alliance for American Manufacturing was not impressed by Trump's efforts in office, particularly during his trip to China in early November.
"We are bitterly disappointed with the president's failure to demand systemic reforms in our economic relationship with China," Paul said, according to Bloomberg. "This trip was all for show."