Phil Gramm and Don Boudreaux, in today’s WSJ:
Yet workers aren’t eager to do that (work in manufacturing plants), and for the past 60 years Americans have educated their children to enable them to work in the services industries where wages are higher and opportunities greater.
I wonder what Gramm and Boudreaux visualize when they use the term “service industries.” It is a very, very broad category, ranging from Uber Eats delivery drivers to shelf stockers at Home Depot to plumbers and handymen to trash collectors to warehouse workers at Amazon to local CPAs and high-level management consultants. Also rock bands, software development companies, and used-car salesmen.
True also of jobs in manufacturing, ranging from assembly worker to skilled machinist or toolmaker to shelf-stocker to dispatcher/expeditor to industrial engineer to PLC programmer to plant manager and VP of manufacturing.
Note that both the factory and the service business will employ janitors doing very similar work, and he will be categorized as a manufacturing or service employee accordingly…unless the job of ‘janitor’ is outsource to another firm, in which case he will fall under ‘services’.
Note also that the work of a distribution warehouse worker and the work of a stocker/picker in a factory will likely be very similar, despite the fact that the latter is considered ‘manufacturing’ and the former is considered ‘services.’ It would appear that Gramm and Boudreaux would regard the job of the warehouse worker as somehow higher-value and more in tune with technological progress.
Also, that part about Americans having educated their children to enable them to work in the services industries where wages are higher and opportunities greater…are they really unaware with the problems with so much American education over past decades, resulting in a lot of people who having limited written communication and even more limited basic math abilities? A lot of people are in dead-end service jobs specifically because of their lack of these skills, and indeed in many cases can function in those jobs at all only because of the computer-based deskilling that has been applied to the work.
Your thoughts?
I spent my career working in R&D for major chemical companies. I was surprised to find out that I was considered part of a service industry, even though my work contributed significantly to the efficiency of our manufacturing operations.
Funny you post this, I was working on something similar but from a different direction.
What Gramm is talking about is two things.
The first is the acknowledgment that interests of service workers (however you define it) are in competition with those in manufacturing. To use the Scooby Doo metaphor, it seems he is saying we could could have free trade if it wasn’t for those meddling manufacturing-wanting, MAGA voters
The second is status. Top welders make in excess of $100,000+. Then again welders don’t get into the cool kids club. So if I was advising a high schooler, it might be reasonable to encourage them to pursue the more virtuous path by going into trades and do their own self-education program as opposed to going to college where they will poorer, dumber, and with less career prospects
Mr Bill..in terms of the economic statistics, I’m pretty sure you would have been counted in manufacturing. Grok says:
“In economic statistics, an employee’s classification depends on the primary activity of the company, not their specific role. If the company is a manufacturing firm (e.g., producing goods), all employees, including those in service roles like janitorial or R&D, are typically categorized under manufacturing in datasets like the Bureau of Labor Statistics (BLS) or NAICS codes. The company’s industry classification (e.g., NAICS sector 31-33 for manufacturing) drives the categorization, as economic data prioritizes the firm’s output over individual job functions.
For example, a janitor or R&D worker at a car manufacturing plant would be counted in the manufacturing sector, as their work supports the production of goods. However, if the same roles were at a firm primarily providing services (e.g., a cleaning company or research consultancy), they’d be classified under services.”
So if you ‘d been working for a contractor doing R&D for the company, you’d have been counted in the Service numbers, but if you were a direct employee, you’d be counted under Manufacturing.
Think about the classic “service” job — a barber. What he does is essential, and it cannot be offshored. I have a suspicion that barbering was not what Gram & Boudreaux were thinking about when they praised “services” as the place where Americans ought to work.
What does a barber need to do that essential “service” job”? Start with a suitable building, created by the construction trades. Then a highly engineered barber’s chair, which requires brawny workers to dig up iron ore, coal, other minerals, build steel mills, and eventually provide that chair. Next there are those very sharp metal blades in scissors & razors, produced by manufacturing workers using the products from steel mills. Towels, mirrors, brooms, antiseptics, and many more — all of them produced by manufacturing workers. Without the tools provided by manufacturing industries and their workers, “service” industries would die.
I suspect the “service” industries Gram & Boudreaux think Americans should aspire to are their industries — politics, law, bureaucracy. Things that should mostly be classified as unproductive (or even destructive) overhead.
Yet workers aren’t eager to do that (work in manufacturing plants), and for the past 60 years Americans have educated their children to enable them to work in the services industries where wages are higher and opportunities greater.
Is this some sort of a joke?
People including Americans want to work jobs that pay relatively well for their area and are also willing to work lower paying jobs with the goal of getting a higher paying one later.
When most higher paying manufacturing jobs are sent to China or elsewhere, the willingness of people to work the lower paying industrial jobs with no likely future also vanishes.
Que up the lecture about how lazy Americans are these days.
Former Michigan resident here. Pre-NAFTA, I worked a service job in a store. It did not pay better than a good manufacturing job, which I wanted. It did pay much better than the second job I got for experience at a plant that paid rock-bottom minimum wage to new hires. Eventually I got a good job in industry and most of my coworkers at the store did too.
Then came NAFTA. I got to watch the slow-motion disembowelment of the US economy for decades. I can only presume as GL notes that Gramm is referencing “service” jobs in politics, law, or bureaucracy when he imagines they pay better than industrial jobs.
But then again Gramm is an elderly man and if I had to guess I would have assumed he was dead. Presumably he crawled out from under a rock buried underneath a retirement home because he was worried about his stock portfolio, noting that the Trump administration hasn’t been prioritizing Wall Street as much as he’d like.
He can go straight square to h*ll.