Government has grown while manufacturing has not.......

[FinanceDude]

Interesting article:

CARPE DIEM: Two Americas: Public vs. Private Employees

 

[MasterBlaster]

This shouldn't be news to anyone that's paying attention.

Nonetheless the trend is disturbing on many levels.

 

[Bimmerbill]

Well, we are fighting two wars. That takes a lot of logistics and support.

 

[eytonxav]

Although the gap may not be as large as represented, I'll bet the compensation/benefits follow similarly. I find that very disturbing.

 

[MasterBlaster]

Well, we are fighting two wars. That takes a lot of logistics and support.

Are you referring to the War on Poverty and the War on Drugs ?

 

[Bimmerbill]

Don't forget the war on illegal immigration!

 

[Westernskies]

Don't forget the war on illegal immigration!

Or the war on the idle rich, the war on poverty, or the war on the middle class.

 

[FIREd]

Or the war on the idle rich, the war on poverty, or the war on the middle class.

We should have a war on wars...

 

[Westernskies]

We should have a war on wars...

with it's own theme song...


YouTube - "War" by Edwin Starr (Original Video - 1969)

 

[pimpmyretirement]

Blame the robots.

 

[ronin]

I've always liked this quote (forgot who wrote it, as probably did the President to whom it is attributed):

Government is like a baby: An alimentary canal with a big appetite at one end and no sense of responsibility at the other.

 

[clifp]

Blame the robots.

Exactly manufacturing jobs have been disappearing world wide for close to 50 years. Just like 100 years before that farm jobs disappeared.

The country that lost the most manufacturing jobs in 2000s was China, at one point in 2009, China was on track to lose more manufacturing jobs in than the US had >10 million. Now some of these Chinese jobs were lost to places with even cheaper labor like Malaysia or Vietnam. But most were lost to automation. Blame it on SkyNet.

Most of the job loss in manufacturing were made up with an increase in service jobs. Now if you want complain that Government doesn't provide a whole lot of service for the dollars we spend, you'll get no argument from me.

 

[Independent]

The OP links to an article in the WSJ which begins

By STEPHEN MOORE

If you want to understand better why so many states—from New York to Wisconsin to California—are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.

IF that's a problem, what might we do about it? The first thing that comes to my mind is that it's hard to have "free trade" when one side is manipulating its currency, so maybe we should have put a small tariff on Chinese goods, just enough to offset the currency peg. I'll bet the WSJ and this author would be up in arms against any such suggestion.

 

[Independent]

I thought the graph would have been more informative if it has shown employment as a percent of total. So I went to the source and did my own math. This is the result:


Year : PGd : Man : PSv : HCr : Fed : St : Lcl

1940 : 7% : 31% : 49% : _% : 3% : 2% : 7%
1950 : 7% : 31% : 48% : _% : 4% : 2% : 7%
1960 : 7% : 28% : 49% : _% : 4% : 3% : 8%
1970 : 6% : 25% : 51% : _% : 4% : 4% : 10%
1980 : 6% : 21% : 55% : _% : 3% : 4% : 11%
1990 : 6% : 16% : 54% : 7% : 3% : 4% : 10%
2000 : 6% : 13% : 57% : 8% : 2% : 4% : 10%
2010 : 5% : 9% : 58% : 11% : 2% : 4% : 11%


Headings are:
PGd - Private Goods other than Manufacturing
Man - Manufacturing
Psv - Private Services other than Health Care
HCr - Health Care
Fed - Federal Government
St. - State Governments
Lcl - Local Governments

The BLS didn't split out Health Care until 1990 (at least in the file I found).
The BLS didn't split state vs. local until 1955, so I used the 1955 split for prior years.

At any rate, the message is that:
Private Goods went from 38% to 14%.
Private Services went from 49% to 69%.
Government went from 10% to 15%.

Most of the lost manufacturing jobs were replaced by private sector service workers, not by government workers.

Table B-1. Employees on nonfarm payrolls by industry sector and selected industry detail [In thousands]

 

[MasterBlaster]

So if I read the tables correctly, manufacturing dropped off a cliff. State and local government, as well as government health care really took off.

 

[Purron]

Looks like we'll have a big dip after midnight....at least for a while. DH and I are planning to take advantage of the lack of traffic next week and see some sites. The cherry blossoms are beautiful even if the monuments are closed.

 

[plex]

Nothing to surprising from the data, manufacturing dropped off a cliff, healthcare skyrocketed in the last 10 years (but wasn't increasing much before then the, 0%'s are very misleading and should be blanks since there was no data), government grew slightly, private services went up a good bit.

I would not be surprised if a good chunk of the private services growth is from colleges, which have sky-rocketed in numbers AND tuition.

The big take away is that manufacturing will be gone completely in 20 years and colleges+health care will be sucking in 30% of the economy quite soon in manufacturings place.

 

[eridanus]

So if I read the tables correctly, manufacturing dropped off a cliff. State and local government, as well as government health care really took off.

Math skooling dropped off a cliff too.

 

[Independent]

, 0%'s are very misleading and should be blanks since there was no data),

Good suggestion. I fixed it.

 

[Independent]

The big take away is that manufacturing will be gone completely in 20 years and colleges+health care will be sucking in 30% of the economy quite soon in manufacturings place.

I checked higher ed teachers and administrators in the Occupational Outlook Catalog. They had about 1.7 million (that includes all post-secondary, not just four year colleges) which works out to 1.3% of the total. They expect "faster than average growth".

 

[kyounge1956]

So if I read the tables correctly, manufacturing dropped off a cliff. State and local government, as well as government health care really took off.

Why do you say specifically government health care? The fact that the category immediately before "health care" is "Private services except health care" suggests to me that this category refers to private employment in health care, and that "government health care", is included in the Local, State and Federal percentages. Either that, or the health care percentage includes both government and private employment.

 

[kyounge1956]

The OP links to an article in the WSJ which begins

By STEPHEN MOORE

If you want to understand better why so many states—from New York to Wisconsin to California—are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.

IF that's a problem, what might we do about it? The first thing that comes to my mind is that it's hard to have "free trade" when one side is manipulating its currency, so maybe we should have put a small tariff on Chinese goods, just enough to offset the currency peg. I'll bet the WSJ and this author would be up in arms against any such suggestion.

But the Chinese are holding oodles of U.S. debt. If they didn't like the tariff couldn't they retaliate by refusing to lend us any more money? I sometimes wonder if the economic situation between the US and China is analogous to the past military situation with the US and USSR, with Mutual Assured Destruction if either side attacks the other—the only way to avoid catastrophe is for neither side to strike first.

An interesting thought from a book I read last year is that as the price of oil goes up, the potential profit from moving manufacturing to low-wage countries will eventually be outweighed by the transportation costs. It will no longer be less expensive to ship raw materials halfway around the world and then ship the finished products to the US than to manufacture the products here. So eventually, given high enough oil prices, manufacturing jobs will come back to the US—at least the ones that are left after the robots do their thing.

 

[samclem]

But the Chinese are holding oodles of U.S. debt. If they didn't like the tariff couldn't they retaliate by refusing to lend us any more money?

There's the old saying: " “If you loan a man a dollar, he's your servant… loan him a million dollars and you're his slave.” The Chinese have loaned us enough that they won't want to do anything that would adversely affect our ability to repay them.

 

[kyounge1956]

There's the old saying: " “If you loan a man a dollar, he's your servant… loan him a million dollars and you're his slave.” The Chinese have loaned us enough that they won't want to do anything that would adversely affect our ability to repay them.

That's what I meant by "Mutual Assured Destruction". If we do something the Chinese don't like and they attack us economically they would at the same time be destroying their biggest customer—or vice versa. However it might start, it's a fight that China and the US would both lose, and I suspect it would trash other countries economically at the same time, just as a nuclear war between the US and the USSR would have destroyed the rest of the world along with us.

 

[Independent]

But the Chinese are holding oodles of U.S. debt. If they didn't like the tariff couldn't they retaliate by refusing to lend us any more money? I sometimes wonder if the economic situation between the US and China is analogous to the past military situation with the US and USSR, with Mutual Assured Destruction if either side attacks the other—the only way to avoid catastrophe is for neither side to strike first.
.

I go somewhat with the MAD analogy. The Chinese have a lot to lose, too. The accumulation of US debt is a mathematical necessity from their decisions to peg their currency and run a trade surplus. If they don't want to hold US debt, then they have to give up on the peg, and they will eventually lose the trade surplus. (... which might be a good thing for the average Chinese citizen, but apparently not for the people making the decisions).

At any rate, the post was really meant to be looking backwards. Lots of people complained about losing manufacturing back when the jobs were moving, but the establishment said we shouldn't try to do anything about it. Now the jobs are gone and we're dealing with the after effects.