It seems that I keep coming back to the subject of jobs; yesterday's post on Las Vegas prompted a reader (thanks "thai") to ask what percentage of the economy is "leisure". Well, 12% of all private sector jobs are now classified as leisure and hospitality - incredibly, the same percentage as manufacturing. By comparison, in 1950 manufacturing jobs accounted for 36% and leisure for 6%. In other words, within a very short time, as history goes, the US gutted its industrial labor force by an astonishing two thirds while doubling "bread and circuses".
Adding healthcare to the jobs picture, employment in what I call the "lifestyle" sector jumped from 12% to 28% in the same period (private education, included in the chart below, is a minor 2%).
The process of "dumbing-down" and reducing the value-added of the economy has been ongoing for a long time, but it accelerated further after 2001. Between 2001 and today the US shed 4 million manufacturing jobs and added 2 million leisure jobs, plus 3 million healthcare and social assistance jobs. This does not make for a vibrant, innovative economy and certainly not one that can quickly rise to the technical challenges posed by resource depletion and environmental degradation.
One of America's most attractive attributes has always been its economic adaptability. It came at the cost of a smaller social safety net versus other developed nations, but its benefits were also plain to see. A skilled and mobile labor force kept moving laterally and vertically to grasp opportunity as it arose. The labor force is still mobile, but how skilled is it?
As I have said before, manufacturing is key because it generates tremendous add-on benefits in technological R&D, education and competitiveness. Many claim that everything is still OK because we have Harvard, Columbia and MIT, to name but a few top-notch colleges. But how long will they remain world-class if we keep creating bartender jobs while China and India staff their factories and R&D departments with local graduates? Note that 60% of all engineering PhD's in the US are awarded to foreign nationals who can and do go back home to further enhance their nations' colleges and technological capabilities.
Until just a few months ago finance (+500,000 jobs since 2001) was also viewed as a sector where America held a comparative advantage and one that could serve as a substitute to manufacturing. How many still think so?
And, finally, what better sign of the decline in the once proud blue-collar sector than the populist pandering of McCain and Clinton, who keep pushing for a summertime repeal of the federal gasoline tax? Clinton mentioned it twice in her Indiana speech last night. How can anyone claim that 18.4 cents will make a difference with pump prices at $3.60? That's $10 per month for the average car, a difference that could be made up in half an hour by someone with even a semi-skilled job in manufacturing vs. a waiter on minimum wage.
If $30 or $40 dollars per year is such an important amount to the average American that it becomes a major campaign issue, then we have far more serious problems.