In my previous post, I took on the general claim that America is manufacturing.
Not only is employment growing, but employment growth outweighs population growth. That is, the increase in the number of people available to fill Thue’s jobs – and this has been the case for most of the past 40 years.
Is there a fact that more people are making good news for the economy? It depends, as it deviates from the economics case. If real wages are rising and people want to work more to improve their ES living standards, certainly celebrate productivity, production and revenue growth. If wages are stagnant and subs rather want to pursue a profession other than labon, but feel they need to earn a paycheck to keep up with their living expenses, then job growth will be at best mixed bags.
Anyway, roughly speaking, there’s a lot of work out there. I like to remind my students, so the most important skill required to get and maintain a good job is obedient, and Pro Valley can teach them in the classroom: a strong work ethic and willingness to learn. If you know how to show up, listen, learn, apply yourself and contribute to the production process, you will not only be OK, but you will also climb to employment success and increased wages as you gain skills and experience.
But the demagogue, a job figure that is more upward than ever, would argue that we have replaced our well-paid manufacturing jobs with those in the poor service sector. The widely defined service sector is essentially growing our employment, accounting for 90% of new jobs created since the 1979 benchmark, as shown in Figure 4. Comparing the revenues of different sectors of the economy, we can see that the majority of jobs in the new services sector are superior to those in the manufacturing industry. Most service department jobs are found to be safer and more comfortable than factory work.
As of Table 1, there is data from the Bureau of Labor Statistics on the 15 largest sectors and subselectors of the US economy. These increased during the period of essentially all total net income for post-peak manufacturing employment (1979-2025). This may be a surprise to the anti-globalization crowd. Although seven million people lost manufacturing jobs, submining, logging and utility jobs, there was a net increase in employment totaling nearly 69 million. Of these net employment, more than half (53.5%) are characterized by average hourly revenues, which is greater than the current average hourly production revenue. An additional 20% of new employment are revamping hourly income within 10% of current manufacturing. In other words, most of the 69 million new jobs pay the same wage or the same wages than “good” manufacturing jobs. So we lost 7 million good jobs, but we got about 37 million better paying jobs, about 14 million in-depth employment, about 18 million low paying jobs.
We have established that there are no job orders in the manufacturing sector, and we have acquired more jobs than has been lost in the last 45 years, and that most of these new jobs are paying better. Economic change is painful in the short term, but it has gained production and employment not only in the US but also in other parts of the world. Overall, this is good news for the US and the global economy.
But even if they could make protectionists realize that jobs in the well-paid service sector are more than replacing jobs in the lost factory, they would still whine “we’re not making things here.” This complaint, along with Inger on America’s “industrialization,” means that industrialization simply has been passed by scholars. This frequently listened refrain is patently fake. We are creating specific things like clothing, toys, electronics, global-based free trade, and technological advances, and shifting American production to the industry with the largest comparative advantage. But Americans certainly make things and remove the precious things. This is not an easier and obviously demonstrative version of the Industrial Production Index. This is a total measure of US manufacturing production. As Figure 5 shows, after a sudden decline in the experience after the Great Recession of 2008-2009, US manufacturing gradually recovered, with murals reappearing again during and after Covid’s closure. Still, this index, made up of manufacturing, recovers pre-Covid highs and overall has grown almost exactly 100% since the 1979 manufacturing peak.
From a financial standpoint, nothing is better news. US manufacturing creates 100% more value with 35% less workers. Creating more value with fewer workers is more efficient than ever and more productive than ever. These incredible productivity gains have many sources in the form of technological advances, especially in the fields of software, robotics and more, and are now the next major source of creative disruption. Globalization and outsourcing have also played a role. This is because Ulrah in America allows more specialization in sectors where our productive edge is at its biggest. The broader points still stand on the relative importance of technology and the relative importance of outsourcing in driving before change. The US economy is more productive and has more employment opportunities than ever before.
Economists know it’s useless at best, and it’s a groan to talk about other countries that “beat us” in trade, or other countries that have “unfair” advantages. I love playing soccer, but let’s face it. Jalen Hearts is a better player than me (and 99.999% of the population). It’s not “unfair.” But “Okay – I’m good at writing economics and the 98% chance of population. So each of us finds we entertain millions by throwing niche touchdown passes. Write lectures and articles to teach hundreds of people about the benefits of specialization, comparisons, and the benefits of trade that are always there. If each of us focuses on the benefits of his or her comparisons and stop whining about being unfair, the whole economic system has more. I want to teach students, so “fairness” is a word that you don’t see in the lexicons of economics, but I like to use words like “wealth”, “growth”, “prosperity” and other words. The first lesson in market economics is that trade is a highly positive summation game based on specialization. This applies to individuals and remains true when you aggregate profits on a national scale. Things require a decentralized market process that provides information and incentives to us, as other most productive specialisations cannot be known from prior or above. One of the main tasks of economists, we, in particular, teach the subject matter, is to impress students that not only does the system work, but that the free market is being affirmed by arbitration and restrictive policies like tariffs.
They didn’t do “our” work. As long as it is even in a semi-functional market economy, there is always work to do. The real problem today is creating workers, not creating jobs. So let’s stop whining about “unfair” trade practices and other countries of our friends and allies. Count our blessings and make the most of the good situation. Teach people to have a good work ethic, and the rest takes care of themselves.
Tyler Watts is a professor of economics and management at Ferris State University.
