mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
American Service Sector Now Outpacing Manufacturing

A Commerce Department study reports that growth in the service sector has outpaced manufacturing growth. The Wall Street Journal reports:

Businesses in the service sector, including things like accounting, legal services and payroll management, accounted for 12.2% of the U.S. economy last year, adjusting for inflation, according to new figures from the Commerce Department released Tuesday. By contrast, manufacturing fueled just 11.9% of the nation’s gross domestic product

That represents a shift from 2010, when manufacturing and professional services were roughly neck and neck in their contributions to the economy, with the factory sector accounting for 11.8% of the economy — just a whisker shy of services’ contribution. The figures suggest that while America’s factories are whirring again after decades of stagnation, the U.S. economy’s dependence on professional services is growing at a faster pace.

Prophets of American decline are likely to see this as more evidence that the U.S. is doomed, but they’re wrong: These changes have been coming for some time and have little to do with the recession or poor policy. The percentage of Americans employed in manufacturing has been dropping steadily for decades as automation and mechanization has increased. America will always have a manufacturing base, but it will become a less important piece of our employment puzzle relative to the service sector.

While we will never see the high manufacturing employment of the 1950s again, there’s a lot to like about a world where people are free to pursue mentally stimulating careers that they can do from home offices in lieu of performing manual labor on an assembly line.

Features Icon
© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service