>The idea that service jobs are completely separate from manufacturing jobs
>is just misguided. Many business and professional services are related to
>manufacturing jobs-- that is who is being serviced in many cases. If you
>lose big manufacturing firms or have to scale back, you also cut back on
>janitors, accountants, design services, and all the other folks who make
>firms work.
So why is retail shrinking, with all those Chinese goods to sell? Design, accountancy, and other services are necessary even if the dirty work is done halfway around the world. And you're not responding to the point that Chinese imports have largely replaced imports from elsewhere in Asia, so there should be no difference in the secondary effects.
The import share of GDP is lower today than it was in 2000 - 14.1% in the last quarter of 2003, vs. 14.6% in the first quarter of 2000. Service imports (which would include "offshored" services) are up 0.1 point, from 2.3% to 2.4%, while goods are off 0.5 point, fom 12.2% to 11.7%. You'd have a hard time making the case that an import surge is at the root of our employment problem in light of these numbers.
>In a large sense, the decline in manufacturing jobs as a percentage of the
>workforce is very overstated in the last few decades. Many more services
>that used to be done in-house were counted as manufacturing jobs and are now
>counted as service jobs. But just because they are now counted as service
>jobs doesn't mean that they won't decline when manufacturing takes a hit.
>Don't mistake the outsourcing of manufacturing services for the lack of
>importance of manufacturing in sustaining those outsourced jobs.
>
>>From the Philly Fed Reserve Board's Q$ BUSINESS REVIEW:
>"contributing to the decline of measured employment in the manufacturing
>sector has been the increased outsourcing of manufacturing firms' ancillary
>nonproduction functions. Workers in areas such as accounting, marketing, and
>shipping would have been counted in manufacturing employment if they were
>employees of manufacturing firms. If they are employed by accounting firms,
>advertising agencies, and transportation companies - as many now are - they
>are counted in service-producing employment. Similarly, a large increase in
>the use of temporary workers in the manufacturing sector increased the
>number of workers counted in the services industry (where temporary
>employment is counted) and decreased the number counted in manufacturing."
That trend started in the 1980s, and has little bearing on the present.
What is it with the recurrent urge to blame Asians for our economic problems? In the 1980s, it was Japan; now it's China and India. Why the aversion to looking at our own structural problems?
Doug