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Labor, Wages & Unions

Labor, Wages & Unions

American Service Economy

We (the People of the United States) used to be an agrarian economy, meaning that most of what we produced (our gross domestic product or GDP) was farm stuff. Corn. Cotton. Eggs. Dead meat. Then we started inventing stuff. Tractors. Cotton gins. Mills. Hula hoops. A hundred or so years later, we realized that it was cheaper to grow cotton in countries where workers would work for less (China…) and it was better for us to channel American labor into selling food juicers on TV. Or fixing computers. Or being lawyers and suing people. There is more money in service than in manufacturing. At least today. When our economy’s GDP became dominated by service industry revenues (over agrarian or manufacturing), we officially became a "service economy," for better or worse.

The growth of the service sector is clearly the big story within the American economy over the past forty years. The shift of more and more workers from manufacturing and agriculture to service sector jobs has had enormous consequences for the economy. One of the most fundamental of these, is that wages have been reduced.

Why It Matters Today

Big shifts in the broader economy can have a huge impact on your own personal life choices.

Forty years ago, it might have been a great idea for you to drop out of high school to take a job on the assembly line at a Ford factory.  You could have gotten a good blue-collar wage, bought a house in Detroit for your family, and retired on a good pension.  You could have lived the American Dream.

Nowadays, though, you would have to be a bit mad to follow that career path.  The American auto industry is mired in deep long-term crisis, the city of Detroit is half empty, the big car companies can't pay for those generous union pension benefits, and those kinds of high-paying blue-collar jobs don't look to have much of a future.

So you probably want to stay in school... sorry.  And then when you're done with school, you probably want to go on to more school; a college degree looks likely to be increasingly necessary for any kind of high-paid job.

The rise of the service economy changed the whole landscape of work in America.  What big changes do you think are coming next?  Which careers are going to go away, and which are likely to emerge in the future?  The time to start thinking about these things is now.

Microsoft Growth over the Years


Sometimes, a Song Says it Better: Be Our Guest, by Beauty and the Beast

“Be Our Guest” offers the ultimate in service.

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