The aliens come. They're here. They're curious. They walk into Home Depot. Which aisle do you show them?
I really appreciate you doing this.
Absolutely. Great to be with you, Mike.
Great to be with you, Ted. Sometimes my schedule is so bad no one could possibly understand it. And then I, you know, I meet guys like you and I can't even imagine on a day-to-day basis. How many employees now at Home Depot?
[laughter] There's so many cities with so fewer people in them. How do you... Let's just start with how do you manage you?
Well, I mean, we're all about the stores. I mean, it's not about me. Our whole leadership principle is...
Well, for the next half hour, it's pretty much about you.
No, [laughter] no, no, no. The great thing about our company is we are truly all about the associates in the store. So, we don't have a headquarters. We have a store support center. And our leadership principle is literally the inverted pyramid. So you think of most organizations, you have a pyramid with, you know, the ground troops, if you will, on the bottom and work your way up to the executive staff.
Is that what I've seen on like...
That's on the aprons in our founders, you know, Bernie and Arthur and Ken, they literally inverted that pyramid.
And on top's the customer. Everything's for the customer. We're customer-backed and then the frontline associates are underneath the customer then staff and then at the very very bottom is the executive staff and we exist to support the associates so they can take care of the customers.
So I mean that it's not just lip service. You're as the guy who's running the entire operation. You see yourself at the very bottom of an upside down pyramid.
No, that's truly how we operate. So you don't when you ask a question like you know how do you think about you or what do you do about you? I mean that's not what we think about. We think about the associates and we think about the customer. Bernie Marcus always said if you take care of the associates the associates will take care of the customer and everything else will take care of itself. And that's what we focus on. We focus on our associates so they can take care of the customer.
Well the reason I wanted to talk to you honestly is there's so many big brains here and there's so many people. Nobody's got a crystal ball, but a lot of smart minds are taking a very long view and they're trying to make sense of the issues of our time. And it just strikes me that because of the company you run and because of the products that by and large you're known for, you probably learn more from the consumer and consumer behavior, I'm guessing, than most economists do in real time. Am I?
Well, yeah. Well, we see what people are doing every day. You know, why are they coming to the store? They're coming to a store for a reason. They're fixing something. They're improving something. They're dreaming how to improve their lives. I mean, this is truly home and hearth, the American home. And if you're coming to a Home Depot, you're generally coming for a purpose. Sure, some hobbyists are, you know, they're going to look for the new tool. But generally, people are coming. Something's broken, something needs to be fixed, something needs to be repaired, or I'm improving. I'm improving hearth and home. So, we're blessed. Our founders created one of the great business models of all time.
One of the great brands of all time.
One of the great brands of all time. So, when you think of the business model when we started in retail in 1979, open the first two stores in Atlanta, the whole model was we're going to put selection of product, amazing selection of product. We're going to put service and we're going to put value all under one roof. Now, even today, most retailers, you can get assortment, you can get a value, but you're not necessarily going to get service. Or you're going to get great product and service, but you're going to pay for it. The beauty of Home Depot was they put amazing product assortment at everyday low price, great value with that service from the Orange Apron, as we call them, Orange Apron Associates. So, they create this incredible business model. And then they created it in an amazing space, US housing. I mean it is one of the biggest markets in the world. US housing.
You said this morning on a panel tell me if I got it right but the housing sector alone is probably the biggest chunk of our GDP.
So housing alone as an asset class is $50 trillion. I mean I don't I think government debt is something like 38 trillion. Yeah. So I mean I don't know maybe global equities would be bigger. There are very few asset classes that are bigger than US housing. Then as a contribution to GDP every year depending on how broadly you define housing. So if you include rents and utility payments etc associated with that house it's 15 to 18% of GDP. It's an incredibly important part of the US economy.
And how important is it? I guess maybe the turnover is what I mean to talk about like the I know you're concerned about an overall lack of housing in the country and I want to talk about how that goes hand-in-hand with the current labor shortage but the business of selling a house and buying a house. It seems like so much of what you guys do is hand-in-hand with that cuz people are going to fix up the thing they sell and then they're going to mess with the thing they buy. It never stops.
So usually how there's like 135 million housing units and historically about four and a half percent of that turns every year. You know, it goes up and down, but like clockwork, you're turning about 4 and a half percent of the housing stock. And just like you said, when someone's going to sell their house, they're going to fix it up. All those nagging things you lived with for years, your realtor says, 'Hey, you got to fix that up.' And you sell the house and then the new owner buys it. They want to change the paint color. They want to change flooring. They redo a bathroom. Maybe redo the kitchen. So it's an incredible multiplier of activity when there's housing turnover. Right now housing turnover unfortunately is at a 40-year low. So that 4 and a half percent average we're at like three just at 3% right now. So that's a million and a half 2 million houses not turning every year. And that suppresses GDP because you're just not getting all that activity.
So, as a single issue guy, not that I'm running for anything, but I mean I always try and come back to how is workforce impacting that? How is it impacting anything macroeconomic that you would want to talk about? But most importantly, what is Home Depot doing internally to try and close what feels like an ever widening skills gap?
So we understand that there is a skilled trades gap in the country. I mean there are different figures out there that right today we're short 300,000 maybe as much as 400,000 skilled trades. So think of plumbers and electricians and carpenters and HVAC technicians. So we're short. We see that. And obviously in our industry trades is vital for new home construction but also repairing an HVAC unit, putting on a new roof. I mean we distribute roofing material. We distribute, you know, drywall. You need tradesmen to put up the drywall, etc. So, we're investing at Home Depot. Our foundation is principally committed to veterans causes, and we can talk about that.
Bernie was very passionate about that.
We first started off with $50 million commitment 12 odd years ago, and then we went to 100 and we went to 250. We're now at $750 million commitment to support veteran causes. And we're 600 plus million on our way to satisfy that goal.
What do you do like like hiring?
Well, most of it is homeless vets. So on any given night there are 35,000 veterans without a roof over their head. And we just think that's, you know, we got to take care of our veterans, people that preserve, just call it what it is, preserve our freedom.
It's not good. So we stepped in and we work with loads of agencies. When you think of, you know, Team Rubicon and Tunnel to Towers. So, we partner with these people to provide housing, catastrophic housing for catastrophic wounded vets so they can live independently. So, that's our principal focus on veteran causes. But then a number of years ago, we said this trade shortage needs to be addressed as well. So, we pledged an incremental $50 million that we were going to complete by 2028. We've already blown by the $50 million. And there we're working with third parties like the Homebuilder Institute to train folks to get their certificates and licenses for you know again electricians, plumbers etc.
Do you think the licensure and the certification protocols that are currently in place are overwrought? Is it taking us too long to train an electrician or a plumber? And if so, are you guys doing something internally to fast-track it?
I'm not sure of what the curriculum would be from the independent certification boards, but what we're doing internally. We have a whole program that's on our website. It's native to us. We call Path to Pro. And what we do is two things. We work with candidates who want to become pros and we help them get a resume together, you know, take a picture. They publish this on our website. We've had 170,000 I think pros come through our website. They take preliminary. It's not a full certification, but they can take courses to get just the basics to see what might I be interested in.
That's all on our website. So, you can go into Home Depot Path to Pro, right? And you can be a, you know, high school graduate, someone trying to change career and you can start taking coursework, learning about the trades, put a resume together, get, you know, your profile loaded on homedepot.com, Path to Pro, and then our pro customers have access to that and they, you know, read the bios and then direct, you know, reach out to these candidates and hire them. So that's what we're doing internally.
Yeah, internally. So is it like a pre-apprenticeship thing or...
Yeah, it's kind of more a pre-apprenticeship thing. And then you asked about the outside certifications. I mean, again, we've blown by $50 million that we've already provided for the training. We do that in a number of ways. Again, we give to outside partners who actually do the work. We're on a number of military bases. So, I think we're up to like nine military bases where we work with a Homebuilder Institute and they actually set up active functioning classrooms on the military base. So, as servicemen are transitioning out of the military, they can go take carpentry, plumbing, electrical work, and get certifications. So, when they transition out of the military, they can go and have an able job.
It's so great. Ted, have you seen or heard of Workshop for Warriors down in San Diego?
I've not heard of that, but one of our biggest installments is in San Diego.
He's a Navy guy and he came out and he was a medic and he just was so frustrated with the number of people he saw who were just falling through the cracks. He owns like three not owns but has rented out blocks down in San Diego and he's trained thousands of men and women mostly men in the welding trade and his success ratio is extraordinary and he's helping build like I'd call him maybe a vet friendly on-ramp into companies like yours and so my question if there is one I guess is to say do you think the feds can close this gap. I think we personally I think we need them involved, but it feels to me like it's going to be Home Depot and pardon me, it's going to be Lowe's and it's going to be FedEx and UPS and Milwaukee Tools and DeWalt Tools and Black & Decker. It just feels to me like we're this close to some stealthy memo going out to all the CEOs that says, 'Look guys, we need a rising tide.'
Yeah. When it comes to educating their kids in 2026, parents are desperate. They know the public school system is failing and they can't afford a private school and they don't have the time to homeschool. So, you know what they're doing? Well, a lot of them are relying on K12's career and college prep program. This is a tuition-free online public education that prepares kids for lucrative careers in construction and healthcare and so many other fields. It's growing like crazy because every year thousands of students get the industry certifications they need to hit the ground running. This allows them to earn college credits along the way. So if they want to head to a university or jump straight into a high demand trade, K12's career and college prep gives them something a diploma can no longer guarantee a head start. It is practical, it's smart, and it is working. Give your student the opportunity to explore the right fit for them right now with K12's career and college prep. Go to k12.com/rorow and learn more. That's the letter K, the number 12.com/rorow.
We all get the story. If it's 300 400,000 short today, it's going to be 3 million short in a few short years and then it's going to grow even more as the current pros age out and retire. I think one super important thing that the feds are doing is Pell Grants. In the one big beautiful bill, you know, Pell grants was always for, you know, four-year college, two-year associate degree college. They've extended Pell grants to short-term trade schools. So, you can, it has to be administered through the state. So, we've got to get the states on board with this federal money that you can get a Pell grant to, you know, we were chatting the other day about, you know, if it's $2,500, $5,000 to go and take a 12 13 week course to get certified. Not everyone has that, you know, much money up front. So, you can get a Pell Grant now starting July 1st to pay for your trade school. And so that's huge. Funding is huge, but yeah, companies have to be involved. Military transition is a huge avenue for these trades folks. We're doing our, you know, thing on our, you know, own digital properties to get involved. We're also very active now in high schools as shop is coming back. I mean, it's a thing and these schools don't have the tools. So part of our program that 50 million plus in giving that we now are doing, we will gift the school that's setting up a shop class all the tools they need to establish that shop class.
So how do you quantify success and what does it look like through the lens of this Path to Pro?
Well, we need, like I said, we've had 170 odd thousand pros or future pros engage on the site. So, we're looking at engagement levels and we're looking at people that go on and get full training in curriculum to get their certificates. Another group we're working with is both the Boy Scouts and the boys in Boys and Girls Club. So, we have programs similar like to the high school classes I told you about where we are working with the Boy Scouts for Camp Woodruff, which is one of their biggest camps in Atlanta, greater Atlanta, where they're going to put together kind of a DIY badge program that will sponsor and again provide the tools to the camp. We have so much curriculum and know-how on do-it-yourself so that the Boy Scouts can work through a badge program. Now, they won't be a certified pro when they come out, but again, so much more training from the Path to Pro. And then the same thing with the Boys and Girls Clubs where we're working with them. Boys and Girls Clubs are based in Atlanta. We're working very closely with them to do a similar program to provide tools and curriculum so they can start training their kids who are interested in this.
How important do you reckon organizations like the Boy Scouts are to the country? I think of Skills USA. I think of 4-H. I think of a lot of boys and girls clubs, boy scouts.
It's the connect. Absolutely.
Did you have a past with the scouts yourself?
Not I mean I went up to Weeblow. [laughter] So did Mars Taylor got not the Eagle Award for sure. But my wife was super active. She both my daughters did Girl Scouts and she did each of their troops through 12th grade. So this group of girls, you know, 15 odd of them in each troop stayed together through high school. I think she told me she did something like 75 different weekend trips with those two troops. So I was there supporting my wife in her pursuit. I was only a Weeblow.
Well, did I hallucinate this? I thought I saw you on the interwebs at some golden something award that the Boy Scouts had.
Yeah. Their sort of annual luncheon. Yeah. And fundraiser in Atlanta.
They called me for one of those once. His schedules hadn't worked out.
Yeah, they're terrific. Yeah.
The Boy Scout saved my life.
Yeah. So, how far did you go?
