Trades, degrees, straight into work: where are the best employment prospects?

Economist Craig Renney counts himself lucky that he has known what job he wanted to do since he was 12.

"I saw my first [government] Budget when I was nine. When I was 12 I knew what I wanted to do for a living, which was to write a Budget.

"I've been very lucky and written three … but for a lot of people, they don't know what to do and are attracted by whatever dollars [are] available."

Renney said for many young people, that meant choosing whether they would head to university, go into a trade, or straight into work - with relatively little information to guide their decision.

The best career path is a perennial point of conversation for New Zealanders - but what does the data tell us about might be the best outcome over a person's working life?

Pay rises

Stats NZ data showed health professionals had the fastest wage growth between 2019 and 2024 - probably as a result new collective pay deals and pay equity agreements.

That increase was followed by the pay rises received by sales assistants, who would probably have had their pay boosted by large increases in the minimum wage, and personal service workers - again potentially affected by pay equity deals.

Road and rail drivers were next, with more than 20 percent salary growth over the period, followed by factory process workers.

Labourers also had more than 20 percent salary growth. The construction trades had more than 19 percent, compared to general clerical workers at 17 percent, professionals at 17 percent and "managers" at 12 percent.

"For the past few years the biggest growth has been in trades wages," Renney said.

"The reason for that is we have had a construction boom - there was a shortage of trades-qualified people because we didn't do workforce planning. Anyone with a trade during the low period post-GFC could get better wages elsewhere."

Changes afoot

A problem for many trades is that the work can be cyclical. The current weakness in the construction market meant those pay rises were unlikely to continue, and it could be harder to get an apprenticeship.

Seek data showed that in the past year, demand for workers in trade-heavy sectors had declined to a greater degree than the professional services and public sector. Construction job ads were down 40 percent, compared to a drop of 35.4 percent in professional services.

But within the sectors there was variation. Banking was down 19 percent, but consulting dropped 28 percent.

Mike Lough, of Cambridge Homes, said there were barely any jobs being advertised. "That's just the fact the construction industry is struggling at the moment."

But Renney said when construction demand did pick up, there was less chance it would be met with automated skills, compared with other sectors such as retail - where staff members might be replaced with automated checkouts, for example.

"For many people in service industries, the risk is not just that demand goes away, but the thing you do is not valued in the same way any more."

He said tradespeople's pay was sometimes a function of how many were available at any one time.

"We've had a structural shortage of plumbers and electricians and - as someone who recently paid a plumber - I can tell you they're still making three times more than me, who went to university for eight years. Best of luck to them, that's supply and demand."

Training adds a premium

Renney said young people in particular who followed dollars into a role would need to think about how sustainable that was. "A lot of people trade off education for earning, particularly when they're younger."

That was visible in the employment market in recent years when employers clamoured for workers. People in the "golden window" of 15 to 21 went into the workforce in large numbers.

"They may well become the first to become unemployed and they've lost that magic window for training," Renney said.

"My main concern is not that those people shouldn't be in work - that's up to them.

"They may well have been in work when they otherwise might have been in training or education, and that can have lifetime consequences for them."

Data from Education Counts shows that higher-level qualifications tend to provide significant income and earnings benefits over a person's working life, particularly compared to those who left school without any further education.

In its most recent update, Education Councils reported median weekly incomes for degree-qualified adults were about 40 percent higher than for those whose highest qualification was a school one, over the past decade.

"When looking just at employed adults, the hourly earnings of those with a degree have been around 35 percent more than for those with school qualifications only.

It said wages would generally as people gained work experience, but higher levels of education seemed to mean that people's income grew at a faster rate. Getting a degree gave more of a wage benefit to European workers than it did for other groups.

"For those with a Level 4-6 tertiary qualification, they've been around 10 percent more. Adults with no qualifications, on average, have received around 20 percent less in weekly income, and 12 percent less in hourly earnings, when compared to those with school qualifications only."

Renney said there should be more workforce planning and careers advice for people.

"We create these skills shortages and all of a sudden we have lots of people doing this job and then there's not… If anyone has any skills we export them to Australia. It's very much a case of we are very dependent on the economy of the time and what's happening in Australia."

He said it was hard to pick which roles or sectors were likely to be more resilient over time.

"Everyone's career at every point in time has been both written off and suddenly resurrected. People who worked in banks had the safest jobs in the world until they didn't… the only thing you can do to help yourself if make sure your skills are up to date."

New Zealand did not have a good track record of helping people retrain mid-career, Renney said.

Here is how some of the roles compare.

Farming

Federated Farmers says salaries have increased in recent years. Its 2024 farming salaries report showed the average salary for a farm worker lifted $7480 to $71,4112 between 2022 and 2024.

"For some more senior roles, the increases have been significantly higher," Federated Farmers national board member and employment spokesperson Richard McIntyre said.

"For example, the average salary for a dairy herd manager is up 19 percent to $74,185. A sheep/beef farm manager is earning an average 22 percent more than two years ago ($88,381) and the average income for an arable farm manager is up 28 percent to $101,264."

Federated Farmers said the total salary package that a dairy farm assistant was getting on average in 2024 was $61,994. A dairy farm assistant manager might be on just over $97,000 and a dairy farm operations manage $112,497. A sheep and beef farm general hand might earn $62,858 and a sheep and beef farm manager $105,74.

Generally, these are roles that are learnt on the job rather than via a specific training course. Primary ITO, which offers training for agriculture, horticulture, apiculture and seafood roles as well as some food processing industries, said people who were training through its courses were earning on the job and would not be taking student loans.

Professions

A solicitor might start on $62,000 and move to about $130,000 a year within five years, according to careers.govt.nz. This would require a law degree, which might cost about $30,000.

The Law Society recently conducted a cost of practice survey, which showed legal practices were facing significant staffing challenges in attracting and retaining suitably qualified and experienced staff.

Hays' salary survey showed a graduate in a mid-tier private legal practice was typically on $58,000.

An accountant would start on about $70,000, careers.govt.nz said, and move to $165,000 when experienced. Accounting normally requires a degree - Otago's bachelor of accounting is $22,000 - but sometimes there are options to train on the job.

Hays said a financial controller in Auckland in a company with turnover up to $100 million might typically be on $155,000 a year.

A systems administrator, who would normally need a diploma or a degree in computing or information systems, would be paid $85,000 to $120,000 a year, according to the careers website.

Trades

According to careers.govt.nz , a carpenter might earn $23 to $25 starting out, and $29 to $41 an hour when more experienced. A plumber might get $23 to $52 an hour, depending on their level of experience.

Electricians might earn $34 an hour initially, and up to $43 an hour after eight years' experience. In all cases, people who own their own businesses could earn more.

Many trades are learnt via apprenticeships, although Unitec said it recommended studying a certificate in electrical pretrade, which costs $6900, before beginning as an apprentice electrician.

BCITO director Greg Durkin said apprentice builders would have the benefit of being paid while they learned.

"The cost of training to become a builder can vary... In BCITO's case, the fees for a carpentry apprenticeship are $1802 for the first year and $875 for each of the subsequent two to three years.

"Additionally, BCITO currently has a fees support incentive in place where the first year is free if you sign up by the end of August 2024.

"We understand the cost of living can be a challenge and we are doing our bit to support apprentices in their first year. This support is making a difference with the rate of new apprentices entering the trades very high at present."

Research in 2022 showed the median salary for a graduating apprentice under 25 was $60,000 per annum, he said.

"That's $20,000 more than the national median for that age group. For school leavers jumping straight into an apprenticeship, by age 24, apprentices have earned over $150,000 more in total than their schoolmates who went to university."

Service

Careers says retail managers earn between $48,000 and $60,000 a year and the chance of getting a job is "average". Bartenders would earn $23 to $25 an hour, it said, and bar managers could earn an average of $29. A motel manager might earn $60,000 to $80,000 a year and hotel managers up to $100,000.