The shift in jobs and the need to shift job training

The Economist reports on the decline in manmufacturing employment in the U.S.

For the first time since the industrial revolution, fewer than 10% of American workers are now employed in manufacturing. And since perhaps half of the workers in a typical manufacturing firm are involved in service-type jobs, such as design, distribution and financial planning, the true share of workers making things you can drop on your toe may be only 5%. Is this cause for concern?

The Economist answers its own question in this opinion piece:

Shrinking employment in any sector sounds like bad news. It isn’t. Manufacturing jobs disappear because economies are healthy, not sick. The decline of manufacturing in rich countries is a more complex story than the piles of Chinese-made goods in shops suggest. Manufacturing output continues to expand in most developed countries?in America, by almost 4% a year on average since 1991. Despite the rise in Chinese exports, America is still the world’s biggest manufacturer, producing about twice as much, measured by value, as China. The continued growth in manufacturing output shows that the fall in jobs has not been caused by mass substitution of Chinese goods for locally made ones. It has happened because rich-world companies have replaced workers with new technology to boost productivity and shifted production from labour-intensive products such as textiles to higher-tech, higher value-added, sectors such as pharmaceuticals. Within firms, low-skilled jobs have moved offshore. Higher-value R&D, design and marketing have stayed at home…. Yet there is a residual belief that making things you can drop on your toe is superior to working in accounting or hairdressing. Manufacturing jobs, it is often said, are better than the Mcjobs typical in the service sector. Yet working conditions in services are often pleasanter and safer than on an assembly line, and average wages in the fastest-growing sectors, such as finance, professional and business services, education and health, are higher than in manufacturing…. People always resist change, yet sustained growth relies on a continuous shift in resources to more efficient use. In 1820, for example, 70% of American workers were in agriculture; today 2% are. If all those workers had remained tilling the land, America would now be a lot poorer.

Of course, the good service sector jobs do require some training. And this Chicago Tribune story by Barbara Rose highlights the deficit in human capital investment in Chicago:

Chicago’s future economic prosperity will depend in part on the success of programs such as The Employment Project that move more workers into the mainstream of a competitive global economy, a new study reports. The study by the nonprofit Chicago Jobs Council, to be released Wednesday, is intended as a wake-up call to the fact that an estimated 41 percent of the area’s labor force will reach retirement age over the next 15 years, fueling demand for new skilled workers. Yet an increasing number of job seekers have only limited basic skills. The report is part of a broader awakening about the importance of workforce development in an era in which companies need better-educated workers to compete globally, business leaders said. “If you had to look for the single least sexy and most complicated topic out there, this is it,” said Paul O’Connor, executive director of economic development group World Business Chicago.

Here’s a link to the Chicago Jobs Council report discussed by Rose.