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Where are the Jobs?
As the economy slowly recovers as indicated by a slight growth in the GNP, corporate profits and stock market, no one knows why the jobs aren't roaring back.
There is no simple answer, but maybe part of the problem is that the largest economy in the world, built on producing goods and items of value, cannot sustain itself with only a growth in services and electronic gadgets purchased from foreign countries.
Automation and improved technology has permanently reduced the number of jobs required to produce all durable and consumer goods.
However, high compensation costs, including healthcare & pensions, regulation through the EPA, OSHA and other government agencies and the lack of a coherent energy policy all add to the decline of goods producing jobs.
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Economic Activities
As complicated as our economy seems, it can be separated into three basic activities.
1) Production, which encompasses mining, manufacturing, construction, utilities, transportation and the sales and distribution of this production.
2) Services, which include professional, financial, personal and leisure activities performed for businesses and individuals.
3) Tax Supported, which includes government, education and health care.
For over 200 years the foundation of our economy was the production of goods needed by our country and exported to others. Over the last 50 years that has significantly changed. The following shows the total nonfarm employment in the U.S. and the number of those jobs in the production activity:
numbers in thousands (000)
Year Total Production
1960 54,105 29,687
1970 71,006 36,323
1980 90,528 42,677
1990 109,487 46,389
2000 131,785 50,874
2007 137,598 48,863
2010 129,818 42,360
Gain +140% +43%
Even in the peak employment year of 2007, production jobs were decreasing.
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Production versus Services
Another way to look at the changes ill our economy is to compare nonfarm employment in the basic activities of
Production, Services and Tax Supported.
Following is the percentage of the U.S. workforce in each of these activities:
| Year |
Prod |
Serv |
Tax |
| 1960 |
55% |
23% |
22% |
| 1980 |
47% |
27% |
26% |
| 2000 |
39% |
34% |
27% |
| 2010 |
33% |
35% |
32% |
The problem is obvious: we need to produce more goods with value. We need to graduate more doers who can make things and not excess MBA'S who talk and advise.
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