[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Mail]  [Sign-in]  [Setup]  [Help]  [Register] 

Utopian Visionaries Who Won’t Leave People Alone

No - no - no Ain'T going To get away with iT

Pete Buttplug's Butt Plugger Trying to Turn Kids into Faggots

Mark Levin: I'm sick and tired of these attacks

Questioning the Big Bang

James Webb Data Contradicts the Big Bang

Pssst! Don't tell the creationists, but scientists don't have a clue how life began

A fine romance: how humans and chimps just couldn't let go

Early humans had sex with chimps

O’Keefe dons bulletproof vest to extract undercover journalist from NGO camp.

Biblical Contradictions (Alleged)

Catholic Church Praising Lucifer

Raising the Knife

One Of The HARDEST Videos I Had To Make..

Houthi rebels' attack severely damages a Belize-flagged ship in key strait leading to the Red Sea (British Ship)

Chinese Illegal Alien. I'm here for the moneuy

Red Tides Plague Gulf Beaches

Tucker Carlson calls out Nikki Haley, Ben Shapiro, and every other person calling for war:

{Are there 7 Deadly Sins?} I’ve heard people refer to the “7 Deadly Sins,” but I haven’t been able to find that sort of list in Scripture.

Abomination of Desolation | THEORY, BIBLE STUDY

Bible Help

Libertysflame Database Updated

Crush EVERYONE with the Alien Gambit!

Vladimir Putin tells Tucker Carlson US should stop arming Ukraine to end war

Putin hints Moscow and Washington in back-channel talks in revealing Tucker Carlson interview

Trump accuses Fulton County DA Fani Willis of lying in court response to Roman's motion

Mandatory anti-white racism at Disney.

Iceland Volcano Erupts For Third Time In 2 Months, State Of Emergency Declared

Tucker Carlson Interview with Vladamir Putin

How will Ar Mageddon / WW III End?

What on EARTH is going on in Acts 16:11? New Discovery!

2023 Hottest in over 120 Million Years

2024 and beyond in prophecy

Questions

This Speech Just Broke the Internet

This AMAZING Math Formula Will Teach You About God!

The GOSPEL of the ALIENS | Fallen Angels | Giants | Anunnaki

The IMAGE of the BEAST Revealed (REV 13) - WARNING: Not for Everyone

WEF Calls for AI to Replace Voters: ‘Why Do We Need Elections?’

The OCCULT Burger king EXPOSED

PANERA BREAD Antichrist message EXPOSED

The OCCULT Cheesecake Factory EXPOSED

Satanist And Witches Encounter The Cross

History and Beliefs of the Waldensians

Rome’s Persecution of the Bible

Evolutionists, You’ve Been Caught Lying About Fossils

Raw Streets of NYC Migrant Crisis that they don't show on Tv

Meet DarkBERT - AI Model Trained On DARK WEB

[NEW!] Jaw-dropping 666 Discovery Utterly Proves the King James Bible is God's Preserved Word

ALERT!!! THE MOST IMPORTANT INFORMATION WILL SOON BE POSTED HERE


Status: Not Logged In; Sign In

Economy
See other Economy Articles

Title: History lessons: Understanding the decline in manufacturing
Source: soso
URL Source: https://www.minnpost.com/macro-micr ... standing-decline-manufacturing
Published: Feb 19, 2016
Author: Louis D. Johnston, MinnPost
Post Date: 2016-02-19 13:01:40 by SOSO
Keywords: None
Views: 1896
Comments: 28

History lessons: Understanding the decline in manufacturing

Email logo Email Share logo Share Tweet logo Tweet Print logo Print

By Louis D. Johnston | 02/22/12 .

American factory

REUTERS/Adam Fenster

U.S. industrial decline is a long-run phenomenon and will not be reversed by short-term fixes.

New ideas for reviving American manufacturing seem to appear every day. Many of these notions have merit, but most are built on a flawed premise: that the decline in U.S. factory jobs is a recent occurrence, one that can be reversed through tax cuts or trade policy.

Unfortunately, U.S. industrial decline is a long-run phenomenon and will not be reversed by short-term fixes. Let’s take a look at the trends and their implications.

The really long run

Economists traditionally classify economic activity into three sectors: agriculture (including forestry and fishing), industry (including mining, construction, and manufacturing) and services (all activities not included in either agriculture or industry.)

You probably have a story in mind about what these data will tell us. The United States was primarily an agricultural economy through the 19th century; then, industry swept the landscape in the late-19th and early 20th century — with America standing as the industrial powerhouse of the world by the 1950s. Things stayed this way until the late-1970s and 1980s, when we first lost our edge to the Japanese, then to the Chinese, and have now become a service economy that doesn’t produce stuff.

This story isn’t quite right. Let’s start with where people worked. The graph below shows the distribution of the labor force in agriculture, industry and services from 1840 to the present. The part of the story about agriculture is clearly true: Beginning in 1840 at roughly 70 percent of the labor force, agricultural employment fell to about 40 percent in 1900, 10 percent in 1950, and remains at about 2 percent today.

chart of distribution of labor force by sector from 1840-2010 Source

Next, let’s examine the service sector. Here’s where the surprises begin. In terms of employment, the second largest sector was services, not industry. In fact, service employment exceeded industrial employment throughout American history. Looking at industry, the closest that sector got to services was in 1880!

A similar story emerges when we look at output produced in agriculture, industry and services. Again, the agricultural sector originally accounted for the largest share of output, but services caught up and exceeded agriculture by the 1880s.

chart of distribution of output by sector from 1840-2010

Industrial production kept pace until 1910, but after that services pulled ahead and never looked back. Since 1950, the share of output produced in industry has steadily declined, falling from about 40 percent of output to about 25 percent today.

The story since World War II

Let’s zero in on the period since World War II. To keep things focused, I’ll make three changes to our perspective. First, some might argue that the rise in service employment and output shown above is caused by the growth of government. I’ll focus on private-sector employment and output to see if increasing service employment and output is a product of expanded government or is the result of private-sector changes. Second, I’ll combine agriculture and industry into one goods-producing sector, and then compare that with services.

Here’s what we get in terms of employment:

Chart of private sector employment as % of total employment 1948-2010 Source: Bureau of Economic Analysis, National Income and Product Accounts

Since World War II, the share of private employment in goods production (including manufacturing) has steadily declined from just short of 50 percent to just fewer than 20 percent.

The output data look much like the employment data. Just like employment, the share of goods production (including manufacturing) in GDP has steadily declined while the share of services in GDP has steadily risen.

Chart of private sector output as % of GDP 1948-2010 Source: Bureau of Economic Analysis, National Income and Product Accounts

A tale of two causes

To understand the long-run decline in industry, we need to look at the periods before and after World War II separately.

Before World War II, the service sector grew because we got richer. Think about it: From domestic servants to waiters, blacksmiths to cobblers, and barbers to bankers, Americans have always been engaged in a variety of service activities. And, as the American economy grew and average incomes increase, Americans increased their demand for meals, repairs, grooming and financial services. Thus, more and more workers were pulled into the service sector by this increasing demand.

When we look at the post-World War II data, a different story emerges. First, productivity grew rapidly in industry, faster than the demand for industrial products, while productivity grew relatively slowly in the service sector. This meant that we needed fewer industrial workers and thus many workers were pushed out of industry. At the same time, we were still getting wealthier and demanding more services, and slow productivity growth in this sector meant that to provide these services it had to pull in the workers shed by industry.

Both push and pull forces were present in both periods. But, pull factors (i.e., the increased demand for services) was the predominant cause of decreasing industrial output and employment before World War II while push factors (i.e., rapid productivity growth in industry and slow productivity growth in services) dominated after the war.

Implications for policy

The decline in manufacturing output and employment is a long-run phenomenon, not just a short-run problem. This means that policies designed to boost manufacturing need to be designed with this long-run trend in mind, and not just react to problems of the last 10 to 20 years.

Neither tax cuts nor tougher trade policy address the demand for more and varied services, nor will they address the relatively slow productivity growth in the service sector.


Poster Comment:

A somewhat dated article but worth revisiting if no other reason to invite informed updated discourse.(4 images)

Post Comment   Private Reply   Ignore Thread  


TopPage UpFull ThreadPage DownBottom/Latest

Begin Trace Mode for Comment # 23.

#20. To: SOSO (#0)

This article, and the posts supporting it, is one of the most superficial and evasive pieces of tripe I've ever read.

rlk  posted on  2016-02-19   20:30:36 ET  Reply   Untrace   Trace   Private Reply  


#23. To: rlk (#20)

This article, and the posts supporting it, is one of the most superficial and evasive pieces of tripe I've ever read.

Please enlighten us all as to the truth, as you see it. Tell us exactly why the U.S. transformed from an agrarian economy to a manufacturing economy to a service economy. But perhaps you believe that this evolution too are superficial and evasive pieces of tripe that never really happened?

SOSO  posted on  2016-02-19   22:24:25 ET  Reply   Untrace   Trace   Private Reply  


Replies to Comment # 23.

        There are no replies to Comment # 23.


End Trace Mode for Comment # 23.

TopPage UpFull ThreadPage DownBottom/Latest

[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Mail]  [Sign-in]  [Setup]  [Help]  [Register] 

Please report web page problems, questions and comments to webmaster@libertysflame.com