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Politics : Formerly About Advanced Micro Devices
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To: Road Walker who wrote (349754)9/5/2007 5:28:07 PM
From: TimF  Read Replies (1) of 1574092
 
Service jobs aren't all low paying. Some of them are very high paying. And over time the higher productivity in manufacturing jobs will tend to life real compensation in non-manufacturing jobs. You get more value in manufacturing from fewer people, you also require less of the work force to produce manufactured goods, freeing them up to produce additional services. In other words you get more production. Earlier in our history the same thing happened with farming jobs.

There is some downside to this. Such creating destruction involves disruption that some people don't cope with well. In the very long run, even the poor will be much better off in absolute terms than they are today, but the adjustments aren't always so easy.

A longer run side effect is that the sectors where productivity doesn't grow as fast tend to get very expensive in terms of the amount of manufactured goods or agricultural goods, or services where productivity has increased faster. When this labor is highly skilled or educated and esp. when their are some barriers to entry the costs get very high when measured in such terms. That's one of the reasons doctors and lawyers earn/cost so much.

But all these side effects or short run negative effects are still worth it. Without the productivity improvements you get economic stagnation (at least in per capita terms).

How does manufacturing growth compare to GDP growth?

I'm not 100% sure I understand the question, and even less sure that I understand the point behind it.

According to BLS data ( bls.gov )

Manufacturing output increased by an average of 2.9% per year from 1979 to 2005.

I can't find specific average GDP growth per year from that same period (at least I can't find it quickly). But that number seem similar to real GDP growth per year.

Lets assume that real GDP growth was 3% per year, compared to only 2.9% in manufacturing. Would that .1% difference mean something to you?
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