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The Loss of Manufacturing Jobs

In the early 19405, about one in three American workers worked in manufacturing. Today, that figure is about one in ten. According to former Secretary of Labor Robert Reich, the loss of manufacturing jobs is not a reason to worry. But it is a reason to study hard.

Nice Work If  You Can Get It

It’s hard to listen to a politician or pundit these days without hearing that America is losing jobs to poorer nations-manufacturing jobs to China, back-office work to India, just about every job to Latin America. This lament distracts our attention from the larger challenge of preparing more Americans for better jobs .

It’s true that U.S. manufacturing employment has been dropping for many years, but that’s not primarily due to foreigners taking these jobs. Factory jobs arc vanishing all over the world . I recently toured a VIS factory containing two employees and 400 computerized robots. The two live people sat in front of computer screens and instructed the robots. In a few years this factory won’t have a single employee on site, except for an occasional visiting technician who repairs and upgrades the robots, like the gas man changing your meter .

.Manufacturing is following the same trend as agriculture. As productivity rises, employment falls because fewer people are needed. In 1910, a third of Americans worked on farms. Now, fewer than 3 percent do. Since 1995, even as manufacturing employment has dropped around the world, global industrial output has risen more than 30 percent.

Want to blame something? Blame new knowledge. Knowledge created the electronic gadgets and software that can now do almost any routine task. This g()~ well beyond the factory floor. America also used to have lots of elevator operators, telephone operators, bank tellers, and service- ration attendants. have been replaced by technology .Any job that’s even slightly routine is disappointing from the United, rates. But the don’t mean we arc left with fewer jobs. It means only that we have fewer routine jobs.

Look closely at the economy today and you find growing categories of work-but only the first is commanding better pay and benefits. This category involves identifying and solving new problems. Here, workers do R&D, design, and engineering. Or they arc responsible for high-level sales, marketing, and advertising. They’re composers, writers, and producers. They’re lawyers, bankers, financiers, journalists, doctors, and management consultants. I call this “symbolic analysis” work because most of it has to do with analyzing, manipulating, and communicating through numbers, shapes, words, ideas. This kind of work usually requires a college degree.

A second growing category of work in America involves personal services. Computers and robots can’t do these jobs because they require care and attentiveness. Workers in other nations can’t do them because they must be done in person. Some personal-service workers need education beyond high school-nurses, physical therapists, and medical technicians. But most don’t, such as restaurant workers, cabbies, retail workers, security guards, and hospital attendants. In contrast to that of symbolic analysts, the pay of most personal-service workers in the United States is stagnant or declining. That’s because the supply of personal-service workers is growing quickly. as more and more people who’d otherwise have factory or rout in service jobs join their ranks. Legal and undocumented immigrants are also pouring into this sector.

But America’s long-term problem isn’t too few jobs. It’s the widening income gap between personal-service workers and symbolic analysts. The long-term solution is to help spur upward mobility by getting more Americans a good education, including access to college.

Economists have found it difficult to gauge the vapidity of these two hypotheses. 1 .C possible, of course, that both are true: Increasing international trade and technological change may share responsibility for the increasing inequality we have observed in recent decades.

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