UNEXPECTEDLY: America’s New Millionaire Class: Plumbers and HVAC Entrepreneurs. Private equity is pouring money into skilled-trade small businesses; ‘Next thing you know, you’re running an empire.’
Aaron Rice has two logos tattooed on his left leg: one from the plumbing business he co-founded more than a decade ago, and another from the private-equity-backed company that recently bought it.
Few businesses are as vital to their customers as local plumbing, heating or air-conditioning companies—especially in places like Tucson, Ariz., where Rice works and residents sweltered in 100-degree heat most days this summer.
For years, Rice, 43 years old, was skeptical when out-of-state investors offered to buy his company. He assumed most of them knew little about skilled-trade work or his customers. They were just looking to make a buck. But in 2022, when approached by a local HVAC company backed by private equity, he changed his mind, figuring that they knew the business.
“The trades are hard work. A lot of today’s society, picking up a shovel is foreign to them,” he says.
Private equity, however, is no foreign player in the skilled trades these days. PE firms across the country have been scooping up home services like HVAC—that is, heating, ventilation and air conditioning—as well as plumbing and electrical companies. They hope to profit by running larger, more profitable operations.
Their growth marks a major shift, taking home-services firms away from family operators by offering mom-and-pop shops seven-figure and eight-figure paydays. It is a contrast from previous generations, when more owners handed companies down to their children or employees.
The wave of investment is minting a new class of millionaires across the country, one that small-business owners say is helping add more shine to working with a tool belt.
“You don’t need to go to Silicon Valley to have a successful career and entrepreneurial opportunities,” says Brian Rassel, a partner at the Detroit-based Huron Capital, which focuses on investments in service companies.
As Glenn wrote in the New York Post in January: The white-collar class derided mass layoffs among the blue-collar workers. It’s about to feel their pain.
People losing their jobs to AI is just the tip of the iceberg.
In the next decade, lots more people — possibly (gulp) including professors like me — will be facing potential replacement by machines.
It turns out that using your brain and not your hands isn’t as good a move as it may have once seemed.
People who work with their hands have some advantages.
If you want something done in the material world, you still need people.
(I replaced a toilet seat some time back while pondering these issues and reflected that neither an AI nor a worker in Bangalore could have taken that job.)
A lot of young Americans, especially males, are forgoing traditional college to enter the trades, as welders, plumbers, HVAC technicians and the like.
That’s probably smart. AI won’t be able to replace those jobs.
As Brian Wang notes, robots probably will, one day — but that day is nowhere near as close.
Elon Musk’s new Optimus robots may speed its arrival up, but likely not for at least several years into the future.