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Do You Want Fries, or the Extended Warranty, With That?
Here, from Business Insider, are where the jobs are:
I’m surprised here by two things: The first, that retail is such a big deal, and that the average salary is higher than I expected. It’s not broken down into part- and full-time categories, but still: for the average, it’s higher than I expected in an environment where consumer spending seems to be slack. My guess is that it’s a (messy) combination, but still interesting.
The second thing that surprises me is the relative resilience of manufacturing, which is probably another vague category that includes construction, but it suggests that all is not totally lost.
So, two questions:
- Assuming that it’s a good thing, how do we get manufacturing jobs inching up higher than food/hospitality/retail?
- Can we really be a nation of primarily shopkeepers/food service workers/hospitality workers? Does this graph confirm the evidence of your eyes and ears? I’m not sure it does for me, but maybe that’s a case of my not wanting to see what I don’t want to see.
Note sure, but I agree that categorization of firms, goods and services (such as SIC codes) are hopelessly (a) outdated and (b) misleading. This has to make economic and other analysis less clear and reliable.
It took *years* for the SIC codes to catch up to the difference between computer manufacturing and/repair and software development. I mean I think it finally acknowledged that giant industry in 2001 or something. Previously companies like Google were lumped in with HP which is totally misleading. Macro analysis on Wall street wasn’t much better. While I’m sure that the fine folks at Morgan Stanley understood the difference, CNBC would talk about these large sectors as if they were monolithic. I shudder to think about the decisions made at the IRS and the rest of the government that are predicated on such blunt and poor tools.
It would be neat if a private company could create and maintain more informative categorizations on an ongoing basis and get paid of the quality and timeliness of same. Perhaps on a couple of dimensions such as what industry a company serves (agriculture, transportation), what it produces (raw materials, finished goods, products or services) and where it is the value chain (sells to the trade, sells to consumers, analyzes the industry, consults to the industry, invests in the industry) Comparison over time could be accommodated with a release date for the categories (e.g. Industry category Set 1990, Industry category set 2010) to accommodate both new categories and changing business.
This has to scare the Education Industry to hell. We have hundreds of colleges, all getting more and more expensive, but what kind of job market are they (supposedly) preparing for? It’s a job market that is moving away from high skills and high education.
I thought Obama was going to bring good, high paying jobs. He diss’d “W” for only creating “burger flipper” jobs. Now look.
Agreed. There are really at least 2 stratum and of degrees within schools. Hint: tell your kids to avoid gender studies and race studies as majors unless they want to work for the NY Times, the Federal government or Starbucks.
Wait- are you saying SIC codes have caught up? :)
I’ve spent the past 10 years in the data analytics business and the categorization issues are profound. I see your point about new data, but most folks are significantly attached to the trend lines, and are afraid to switch. As a result I’m suspicious of most analysis for all but the most consistent categories (e.g. housing starts) because I know the flaws the actuaries have “smoothed.”
The trade deficit has always been a pet peeve for me since it fails to properly account for the service industry, where far more Americans are employed than manufacturing.
So when we outsource the manufacturing jobs, we can tell those workers they can find work in the robust retail and food services industries for half the pay. And we wonder why people are angry and becoming resistant to free trade arguments.
:) SIC may not have caught up. I seem to remember a time when it was *slightly* less difficult to explain to an accountant, a bank or (gulp) the IRS what I do for a living than it was to explain to elderly relatives. :)
I think that historical trend lines could be accommodated by keeping existing codes and augmenting with new additional codes released on a 5 year basis. Codes could be retired when no longer necessary or edifying. I wonder if such a thing could be copyrighted and or sold by a private company.
Have a world war that destroys the manufacturing capacity of competing countries. That’s usually good for a couple of decades of robust growth.
(As if being Charlie Chaplin in Modern Times was better than being a Michelin-starred chef.)
I appreciate Rob’s efforts to keep Ricochet from being all-Trump-all-the-time. I think he’s been making an effort to find other things to post about. It’s probably good for us to talk about whether to hug our dogs and such rather the election now and then.
Rob, my business grew 18% last year. I am a manufacturer. I added a net of 1 job in 2015, going from 14 people to 15, and that 1 was an additional assembler. Everything else was picked up through improvements in automation and efficiency.
Those jobs wouldn’t exist if there wasn’t a need for them. Clearly people are spending like its 2006 (I.e. pre crash). I am always shocked at how many restaurants are able to thrive selling $8 bloodies and $12 hamburgers. If everyone in America is a minimum wage slave driving Uber on weekends, then who the heck are all these people eating out 5 nights per week?
Heh. Try workers’ comp codes. I still can’t convince Ohio
MAKING ELECTRONICS ≠ MAKING ALTERNATORS AND SPARK PLUGS!
I’ve said for years, there’s nothing wrong with the American economy that a sustained 6-year conventional bombing campaign against the rest of the industrialized world can’t fix.
You can engage in protectionism, making all of the products those people buy more expensive, eliminating their higher wages with higher costs. But what good does that actually do?
This is the real point. We haven’t lost many jobs oversees. When you need more output capacity, automation is more cost effective now.
There are many people out of the traditional 9-5 market, namely retirees, job shoppers, and unmarried Millennials with spendable cash but no big obligations (house, new car, babies) so going out is about all they can do for now.
Manufacturing is never going to be as large as a % of employment as it was in, say, 1955, but it could be a lot bigger than it is now. There have been a lot of policy decisions which are not very friendly to domestic manufacturing, and there has also been a certain cultural hostility toward the industry. I discussed this at length in my post faux manufacturing nostalgia. Excerpt:
Generalized hostility toward industry, or at least a complete lack of appreciation for same, has certainly driven many public-policy decisions. For example, here is a story about people in the towboat industry in Seattle who have had to wait between four and five years to get permits for minor facilities improvements. This is not just about bureaucratic delay and inefficiency–there is something else going on.
“It’s all cultural,” says Eugene Wasserman, executive director of the Neighborhood Business Council. If it were biotech, it would get the green light.
“Biotech is cool. Propellers and pilings are uncool,” is how the government’s attitude is summed up by columnist Bruce Ramsey of the Seattle Times.
Also from my faux manufacturing nostalgia post:
Several years ago, I observed a local example of the cool/uncool phenomenon noted by the columnist above. A county government had an “incubator” program for new, technology-oriented small businesses..free or low-cost office and lab space, that sort of thing. Someone who was starting a metalworking business to make a new product applied…he was turned down, because the county government wanted “cool” computer-related businesses. (There were no environmental issues: this was clean light manufacturing.) Government officials, who most likely knew very little about any technology whatsoever, chose the currently-fashionable technology, which was web sites, not lathes and milling machines. (Wonder how many of the companies that they did sponsor are still around?)
Look in the kitchen of 99 percent of high-end restaurants in the city of Chicago and the entire kitchen staff is from Mexico.
As someone who has had office jobs in a couple of good-sized manufacturing companies, and who got to spend some time wandering around the factory floor, I’ve always believed that the people who are nostalgic for all those “good manufacturing jobs” never worked in a factory.
As Jason Rudert noted in the PIT – metal splinters in your hands or ears are never fun.
It’s still hot, noisy and dirty.
The melt shop at the steel mill I work for now is unpleasantly warm in January. In August it’s hell on earth.
I worked one summer in a fabricating plant. Sandblasting the scale of of welded joints, running a brake press, forktruck operator, general purpose strong back with a weak mind. Honest work that paid well, but it was hot, dirty, and every so often the monotony was broken by danger. (Foreman: “Don’t get any body parts caught in that, kid. It’s not the blood that upsets me so much, it’s all the screaming and crying that go with it.”)
It served as an excellent motivator when engineering lab work wasn’t going my way.
As mentioned, I snicker at people with office jobs who lament the loss of factory jobs.
It reminds me of the Bill Cosby routine about how he joined the Army because he didn’t know what he wanted to do with his life. Then they woke him up every day at 4 AM, and that’s when he realized what he wanted to do with his life – he wanted to go to college.
My father’s experience: son of a mechanic, put himself through school as a mechanic, and tried to never ever again have to work on cars, once he was an engineer.
Unless you’re cutting the cost of goods by half, it doesn’t really matter that goods are cheaper when people are out of work or making half what they used to.
Obama dropped that at about the time his buddy Steve Jobs told him good paying factory jobs were never coming back, and to drop it. Obama shut his yap and took Apple’s money.
It doesn’t scare them at all. If anything, it makes them more powerful. Hope sells, and colleges are selling “We’re your only way out of that barista job”. Look at all the law schools. There are more law students than jobs available. There’s no way in hell all those people will have good paying jobs. They’ll be stuck with big loans, and they’ll still be pouring coffee.
This is what you get with a “service economy”.
It still goes back to the questions of A) What is really causing the original job losses? and B) What (if anything) can or should be done?
We can blame free trade or off-shoring only for so much when it comes to job losses. It’s a convenient bogeyman, but it is far from the only culprit. It just has the virtues of being an easy thing to remember, and shifting blame to “the wealthy”, whom the unemployed will always resent.
What about the us-based Kia plant that employs less than 25% of the workers of a comparable GM plant of the 1980s? There you definitely have the brutal combination of automation, regulation, unions, and trade all coming together.