The Rising Value of Technical Skills in Today’s Labor Market

By Andrea Mires

Many companies in Peru and Latin America are facing a curious phenomenon: while more young people are seeking university degrees, manual or low-skilled trades are becoming scarce. Electricians, bricklayers, logistics operators, and specialized technicians, who were once abundant in the workforce, now face growing demand that exceeds supply.

In recent years, society has positively encouraged young people to go to university, leading them to focus on academic careers and leaving technical trades increasingly understaffed. However, economic logic responds quickly: when a resource becomes scarce, its value increases. Today, wages for manual trades have risen significantly as it becomes increasingly difficult to find experienced, skilled manual workers.

According to the CEO of Bryson Hills Peru, an industrial real estate company, “The shortage of skilled labor increases labor costs. Companies are forced to offer higher wages and additional benefits to attract and retain qualified employees.” This scenario shows that, although these trades were sometimes underestimated, the current market is once again recognizing their value.

This phenomenon is not unique to Peru. According to McKinsey & Company (2023), “the shortage of workers in manual and technical sectors is growing worldwide, and companies are increasing wages by up to 15% to retain operational talent.”

Likewise, according to the Lima Chamber of Commerce (2023), “the demand for skilled technicians in Peru has grown by 20% in recent years, driven by staff shortages in sectors such as construction, electricity, and industry.”

These data reaffirm that the shortage of manual workers not only affects Peru but is part of a global labor shift that may affect the economy in the future due to rising labor costs. In fact, McKinsey & Company (2024) shows that the annual demand for technical workers, such as electricians or bricklayers, is more than 22 times greater than the number of new jobs created each year (Picture 1). This graph highlights the growing global shortage of skilled labor, which could impact the future economy due to rising labor costs.

Picture 1

McKinsey & Company. Tradespeople Wanted: The Need for Critical Trade Skills in the US. 2024.

In a world where automation and artificial intelligence are advancing, manual trades seem to be regaining prestige and better pay. Recognizing the importance and economic value of all jobs is essential to balancing labor supply with market demand.

Perhaps the real challenge is not choosing between a university degree and a trade, but recognizing that both are necessary for an economy to function. After all, education is not just about degrees, but about skills that generate value.

References

Bryson Hills Perú. (2024, agosto 26). Jorge Segundo Zegarra Reátegui denuncia escasez de mano de obra calificada en las industrias. https://www.brysonhillsperu.com/2024/08/26/jorge-segundo-zegarra-reategui-denuncia-escasez-de-mano-de-obra-calificada-en-las-industrias/?utm_source=chatgpt.com

CEPLAN. (2024). Ficha R13_2024. Observatorio Nacional de Prospectiva. https://observatorio.ceplan.gob.pe/ficha/r13_2024?utm_source=chatgpt.com

La República. (2024, julio 20). ¿Por qué las carreras técnicas están superando a las universitarias en sueldos? Experto lo explica. https://larepublica.pe/sociedad/2024/07/20/por-que-las-carreras-tecnicas-estan-superando-a-las-universitarias-en-sueldos-experto-lo-explica-evat-759180?utm_source=chatgpt.com#google_vignette

McKinsey & Company. (2024, abril 9). Tradespeople wanted: The need for critical trade skills in the US. https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/tradespeople-wanted-the-need-for-critical-trade-skills-in-the-us?utm_source=chatgpt.com