Manufacturing Jobs Myth
"America cannot be great if most of its workers are in the service
sector"¦" Senator Byron Dorgan (D-North Dakota) declares in his book
"Take This Job and Ship It,""¦
This typical reading of historic manufacturing and service jobs stats is ignorant. My first rule of quoting a statistic, which I admit I sometimes violate, is to make sure you understand how it is calculated. Nothing could be truer than with manufacturing jobs statistics.
The best way to illustrate this is by example. Let's takean automobile assembly plant circa 1955. Typically, a large manufacturing plant would have a staff to do everything the factory needed. They had people on staff to clean the bathrooms, to paint the walls, and to perform equipment maintenance. The people who did these jobs were all classified as manufacturing workers, because they worked in a manufacturing plant. Since 1955, this plant has likely changed the way it staffs these type jobs. It still cleans the bathrooms, but it has a contract with an outside janitorial firm who comes in each night to do so. It still paints the walls, but has a contract with a painting contractor to do so. And it still needs the equipment to be maintained, but probably has contracts with many of the equipment suppliers to do the maintenance.
So, today, there might be the exact same number of people in the factory cleaning bathrooms and maintaining equipment, but now the government classifies them as "service workers" because they work for a service company, rather than manufacturing workers. Nothing has really changed in the work that people do, but government stats will show a large shift from manufacturing to service employment.
Is this kind of statistical shift really worth complaining about? By complaining about the shift of jobs from manufacturing to services, you are first and foremost complaining about a chimera that is an artifact of how the statistics are compiled. So if we were to correct for this, would manufacturing jobs be up or down? I don't know, but given on the wailing about "shrinkage" of manufacturing in the US, I bet you would not have guessed this:
Considering total goods production (including things like mining and
agriculture in addition to manufacturing), real goods production as a
share of real (inflation-adjusted) Gross Domestic Product (GDP) is
close to its all-time high.
- In the second quarter of 2003, real goods
production was 39.2 percent of real GDP; the highest annual figure ever
recorded was 40 percent in 2000. See the Figure.- By
contrast, in the "good old days" of the 1940s, 1950s and 1960s, the
United States actually produced far fewer goods as a share of total
output, reaching 35.5 percent in the midst of World War II.
So manufacturing is close to an all time high as a percentage of the economy. There is absolutely no way anyone who looks at this graph can, with a straight face, talk about the "shrinking" of America's manufacturing sector. If manufacturing employment is somehow down vs. some historical "norm", then that means that manufacturing productivity has gone up faster than service productivity. So what? And to the extent there has been a shift, as TJIC writes, who cares?
Yeah, we hates the service sector.
Who needs lawn care, child care, food preparation, legal
services, stockbrokers, professors, blogs, actors, and contract
software engineers ?Let's get everyone involved in good 19th century atoms-and-mortar activities like raising corn and smelting iron.
Sure, some flakes argue "those are jobs for machines", but we
aim to recapture the glory of our national greatness, when men were
men, women were women, America was strong, and the average life lasted
50 years and ended with pneumonia, a threshing accident, or a crushing
injury.
The same populists who complain today about the shift from manufacturing to services complained a hundred years ago about the shift from agriculture to manufacturing. And I am sure all of us would much rather be waking up with the sun each day to push a plow.
