We don't hear a peep from the Trump Administration when a major service employer such as Sears or Toys R Us shuts down hundreds of stores, kicking hundreds of thousands out the door, but he's willing to disrupt global trade and supply chains to create maybe 5,000 new jobs in mostly automated factories.
The day after I graduated from High School my father had me working in an auto factory in Detroit. I was unsure about college at that point but one mind numbing week into it my head turned 180 degrees. While I was making probably 5 times what my friends were making I still could not imagine spending my life doing what I was.
In fact many of my older coworkers would even say don't get addicted to the money go to school and do something more interesting. I would hazard a guess that most of what I did is now done by robots and not a factory worker in Mexico or elsewhere.
1
The service economy is not a plot. We manufacture as much product as we ever have. It is 36% of the total economy. We just don’t need many people doing it, a little over 10% of workers. Unless we wanted the other 89% to make minimum wage as 1950’s cleaners and waiters, we had to upgrade the products in services to generate more revenue and pay higher wages. The service economy is also just as dominant, in terms of labor, in other countries in Europe and Asia. The idea that Germany is somehow a nation of factories, a la the movie Metropolis, is wrong.
President Trump and his advisers are well aware of the situation. They may be aware that the labor shift, at least resulting from other countries’ actions, is pretty much done, as explained in another recent NYT op ed. You could make a case that inter-nation fights are done and the real focus for labor is how a nation adopts AI. Still the President does not roll that way. He wants to get back for “wrongs” done 10-15 years ago. He is Vito/Michael Corleone remembering what another Don did 10 years ago. Maybe Wharton has stopped teaching the concept of sunk cost, at least in Real Estate.
1
Trump knows the size and importance of the service sector in the USA. His actions show he's playing up to his constituents, miners, steelworkers, autoworkers, etc. I find it remarkable that the US allows auto imports into the country under a low tariff environment while those same countries place high tariffs on our auto exports. Trump's making a mistake by focusing on miners and steelworkers. Coal mining has been replaced by cleaner burning or alternative energy sources. The management of steel companies didn't adopt new technology after WW2. New plants contructed in Europe for instance, used electric arc furnaces while it took many years for US steel plants to switch over from open hearth furnaces. Unions should have seen the handwriting on the wall but didn't. Production of various items may come back to the USA. However, the associated jobs may not follow. The installation of robotized production lines will continue the downward trend in manufacturing employment. Nike and Reebok are testing a robotized production line on sneakers manufacturing. Low wage countries will eventually lose these jobs. The production line will return less the jobs that used to be associated with them. I recently watched a video of a brick laying machine in competition with teams of bricklayers. The teams of bricklayers won. However, the bricklaying machine can work round the clock, won't call in sick, doesn't belong to a union. Read into it what you want but the handwriting in on the wall.
1
Now, before some of you say stuff like "this and this will not be possible without manufacturing/farming/mining", the article is not saying that we should be 100% services. That's not possible for any country anyway. Besides, that kind of argument is basically the classic "who is more important, the engineer or the salesman?"" question.
Like every developed nation, the US economy is in the tertiary sector: services. That doesn't mean we don't do manufacturing or mining anymore, it's just no longer the focus nor the impetus of our economic strategy. Moreover, as a developed nation, it is only normal that its citizens consume more than they produce, thus explaining the trade deficit in goods.
So as a developed nation, while having a certain level of farming/mining/manufacturing is fine, it should not distract us from what we really need to do in order to further advance our economy: education. Even the aforementioned are supplanting human labor with automation, and workers need to be trained in order to operate those machines. We also have to upgrade the skills of those who have lost their jobs through said automation so that they'll remain relevant in a modern economy. Wanting to bring mining jobs back is like wanting to discard the computer for the typewriter.
3
Change is L-I-F-E, and any attempt to slow change of move backwards generally leads to stagnation, and eventual death.
2
I think most educated people figured-out long ago that President Trump is a loose cannon. The sooner he is removed from office, the sooner the global economy would be able to resolve changes affecting working class people whose jobs that depend on global competion will be resolved through smart policies. Some policy ideas involve compensation for those losing their financial support through plant closures and extended layoffs. Since the manufacturing sector is most at risk of job loss through global competition it would account for 16% or ~ 20 million jobs, most being secure but many still at risk.
Consider the size of the US GDP at nearly $20 Trillion and per capital GDP hovering about $57,500 (2016).
Insteading of giving about 80% of the $1.4 Trillion tax break to Americans who don't need a tax break (using the deficit number), why not put money aside toward a fund that compensates wrokers that lose their jobs through automation and global trade competitiveness?
The fund could be a supplement to either a training/compensation exit package to retrain younger workers or a supplemental social security benefit for workers over 50 years old, and not expect to find suitable full-time work to replace their lost job,
Funding can involve a 50/50 contribution between industry and federal governments.
American is a land of opportunity. But all too often, those opportunities are clustered in very few cities and states - like SanFranciso, SanJose, Seatle; few can afford.
4
We have more service jobs than stuff-making or -obtaining jobs because of decisions this country has made about trade, labor, and environmental protections over the last thirty to fifty years. It was not like we all woke up one day and said, "Oh hey, let's all ditch our union-pay-scale manufacturing jobs in favor of minimum-wage fast-food work." That choice was made for us a long time ago. Technology MAY have also played a role, but I'd like to see an honest assessment with lots of citations as to how it compares to free-trade agreements as an overall influence on job availability in the U.S.
'Services' will not feed the population nor build structures or aircraft carriers.
Many people feed themselves from working in services industries. 85%, if you read the article--it includes doctors, lawyers, dentists, engineers, etc.
People in services DO build structures and other things, including aircraft carriers (I didn't know we had a lack of them...). Some of this hinges on definitions: Is a plumber, electrician, or civil engineer--the people that build structures-- or road worker in the services industry, or the manufacturing industry? I'd say people that build things are in the services industry.
Canadians have been (politely) yelling from the rafters about this Trumpian distortion for a year. Thank you for finally pointing it out to Americans.
American services and consumer goods dominate Canada (the goods deficit is small, and really only due to lumber and oil). Any claim that Canada somehow is unfair to US trade is absolutely ludicrous.
11
The service economy was a deliberate move begun in the early seventies when Milton Friedman’s voodoo economics became popular, in particular with those interested in keeping all of the profits for themselves. Friedman and his Acolytes envisioned the service economy and the exportation of labor to China and other low wage Mecca’s whereby vast new areas to sell their products would be opened up and the people living there would be given the money or more likely the “credit” to purchase the goods they created. This was clearly a game of numbers their thinking being they would have three billion new customers in Asia, who needs two hundred million Americans, they were happy to throw Americans under the bus. It’s not working out that way and in the long run it will work out even less so. Does anyone really believe the Chinese and Indians are going to set on their hands forever and let American companie suck up all the profits, hardly, they are already hammering away at Apple. They are smart, well educated now, thanks to our allowing them access to our finest Universities, and very, very hungry for success and It should be noted that the “credit” part has been thwarted temporarily as the Chinese and Indians in particular are intelligent enough to fend off the attempts by our vulture capitalists to enter their markets. If their citizens are going to endure a life of servitude to banks it will be to Asian Banks. Let’s hope their “Communist” ethos won’t allow this development.
5
My point was further confirmed with the appointment of the New American Educated head of Chinas Central Bank in an article in today’s Times. The Chinese will not prove to be the buyers of American goods American CEOs envisioned when they created the Chinese middle class by tossing the Anerican working class under a bus, as they develop the knowhow and buy or steal our technologies they will throw those companies and manufacturers under a bus, of course by then the Liberal elites who began this will all be comfortablebly retired, th3 rest of us will be waiting for that professed “ universal basic income”, or revolting.
2
For the record, there have always been well-educated Asians and no, they did not all get their educations here. In fact it was our immigration policy for a long time that we would mostly accept college graduates from Asian countries, which is why it looks like Asian people are naturally smarter and better-educated when in fact they attend university at about the same rates we do.
1
But most crucially, what percentage of Trump supporters do or did "make stuff?" He doesn't give one flip about anyone but his core and never pretended he does.
4
Show me a wealthy country where the jobs are mostly service jobs and where making stuff is no longer a priority.
Germany and now China make stuff. We do not. The service jobs are not adequate to generate wealth for the masses and have created a new anemic middle class ripe for demagogues. Although I am most definitely not a Trump fan, revitalization of manufacturing would go a long way to create economic and political stability.
8
Canada.
Japan. Singapore. The United Kingdom.
China is currently moving away from manufacturing, although you are right in the sense that they still do have considerable manufacturing prowess.
1
Canada is still rich in land resources.
In 1961, America was still an industrial power. 30% of American workers were employed in manufacturing. Now it's less than 10%. American leaders put their faith in the invisible hand of the market, opened our markets to exploitation by Pacific export economies and oversaw America's economic decline. Now 70% of America's GDP is in retail consumption. This low wage model is not sustainable.
Most export economies value and protect manufacturing. Germany trains its young people to work in high tech manufacturing environments. Despite the emergence of robotics, there is an important future for manufacturing. America needs develop a comprehensive plan to protect and foster a new 21st Century manufacturing base in our economy.
8
It was my understanding that Trump wanted to make America great again. How can that happen without manufacturing and textile jobs? Those type jobs have to return to give the boost our economy needs. I think he has more up his sleeve than you give him credit for.
1
@Ken Mercks
You work for the same wages they pay in China, you can have all the "manufacturing" jobs you want....but you won't do that; it won't pay your bills.
5
Trump is also talking a great deal about immigration. That is what keeping wages down in many traditional service realms, as well as construction.
The real problem with tariffs is that they don't deal with the outsourcing of jobs like answering the telephone from India or editing in India.
3
So what ARE the figures for the US trade deficit with China once services are included? The closest the article will say is we are "somewhat" closer to balance. Which means we are still imbalanced.
And about all those IP license fees -- how do you address the Chinese government requirement that tech be transferred to majority-Chinese-owned businesses in China? If we are giving our services / IP away, how does that help?
Color me skeptical about the argument. More data please.
1
Complexity: choosing the years 1970 to 2015 for service to rise from 50% to 80% reveals more than occupational shift; it reveals the growth of soaring income inequality, the disappearance of the Middle Class as it was and the replacement of production with finance as the dominate economic sector all of which is sometimes collected as the rise of ‘Neoliberalism’ as the prevailing mode of thought for intellectuals and politicians alike; not a uniquely American phenomenon.
In 1970 the differential in income between the average worker and the average CEO was 20:1 in 2015 it was 335:1, but the top 25 hedge fund managers earned more than all the CEOs of the S&P 500 combined. https://aflcio.org/paywatch
The most common work category in America today is truck driver, and they may have heard of the driverless vehicle; but some poorly paid hands will still be needed for delivery.
Neither Trump nor anyone else seems to be planning for what may follow in coming years; tariffs will not resolve the discontent that made a Trump possible.
5
That GS and JPM now control assets of one trillion dollars each after 2008 financial crash shows there are winners on a scale previously unknown to man. Others fell by the wayside but instantly restored like AIG by the grace of God and US taxpayer a friend Wall Street never quite appreciates enough. President Obama doubled US national debt and he is still smiling....after all its not his money.
1
In the 70's we had manufacture and textile jobs. let Trump help those type of jobs come back. Here in Southern Illinois a steel mill is reopening with 3000 jobs. If he can do that in Allen town and chicago and bring back the carpet and tile industries on the east coast, we wont need China.
2
@Ken Merks
They are *not* "opening a steel mill with three thousand jobs. Not now, Not Ever.
Distortions, plain and obvious, show how pathetic the argument is to support trump and his foolishness.
Ignoring the obvious point that a single manufacturing job supports multiple service jobs - current estimates place it at about 10 or 12 to 1.
7
The one nice thing about having Donny Doofus as president is that you don't even have to check his facts. He can be counted on to lie, lie, lie...
2
The downfall of American manufacturing is a result of liberal economic policy to dimenish the significance of men in society in favor of more less masculine work. I oppose it. Yhank you.
1
Nice satire, but the spelling errors were overdone.
4
@Realist,
I will do better.
Service industries exchange wealth. The doctor and black jack dealer get richer you get poorer. In manufacturing wealth is created by workers and suppliers.
With a $21 trillion national debt we better create a little wealth.
2
This would require Trump to learn and assimilate new information. Not gonna happen.
2
Trump, in addition to being guilty of sedition, is also a fool.
The columnists for The Times should stop trying to convince their readers that this can change. It's been stated often enough that he surrounds himself with sycophants that pander to him.
If there's one thing that his disastrous Secretary of State will be remembered for, it is his correct observation that he's a "moron."
4
I love these “good old days of” Mining stories and other extracting industries is positively comical.
The roster of dead relatives from accidents that I have fills a cemetery, the best of those good old days lasted maybe 20 years.
We can see from the rollback of oil regulation on drilling rigs the the rich want their money and they don’t want to pay for it with safety improvements they don’t care about. Their friends aren’t dying.
8
Trump is a fool; every minute of every day we are bombarded with examples of how he distorts data to fit his myths. He has zero understanding about the economy (this cannot be doubted given his elevation of Kudlow who, according to reputable economists, has been dead wrong on every single issue his entire career) and on the rare occasion when he makes a policy pronouncement, it is done with no analysis as to impact, simply because he does not understand even the basics. Wow! How on earth did we get here?
5
It's hard to know whether Trump just doesn't get the point made here (difficult to fathom, since he's in the hospitality business) or whether he simply finds the imbalance of goods a convenient political punching bag. Indeed, it's hard to tell what goes on in Trump's mind altogether, if he hasn't lost it entirely.
1
Years ago I used to say, "If you eat out (vs. cooking your own meals) you lose control of your diet." Yeah yeah.I know it's not a 100% true, it's just something to consider. And .....That's the whole problem ..... Most Americans don't make stuff. Other countries are doing it for us. We are "eating out." On a variation of some type of economic bubble, "We're floating down a river, towards the falls." Little by not so little this country has shipped jobs that make stuff you can actually touch beyond our (wall less [haha]) borders. So many of us no longer get our hands dirty. However, so many of these current service jobs are crappyier (sp) than those lost manufacturing jobs. On an infuriating (to me) side note, in 1998, Hasbro (or Mattel?) shipped making the Scrabble tiles outta here. Really? Scrabble Tiles? It's been twenty years and I wonder how much extra profits were gained, never mind the actually quality of the tiles. "I'm just looking out for our shareholders, Wilber." No big deal. Next, let's move on to auto parts ...... Talk to people in that industry about quality and worse, compatibility. And on and on. Ya gotta make stuff to have a healthy country. I turn to Martha Stewart for hope. She makes stuff. ..... Hmmm I got a toilet paper roll, a jar of paste for 1960, a clothes pin and a shoe horn....... "Bringing manufacturing jobs back to America" That's me.
4
Doctors ... rings a bell somehow ... oh yeah: there is an infinite tariff on foreign educated doctors. They are not allowed to practice in the US, despite that fact that US doctors are in short supply and this market exclusion provides US doctors with double the income of, say, Canadian or German doctors. I am looking forward to the Times condemning this major trade protection racket.
"One could chalk this up to a verbal tic that allows the president to exaggerate the scale of the trade deficit. But it could matter in crucial negotiations." I am going to call this "verbal tic" exactly what it is, a lie. Stop soft soaping trump's words, they are lies.
1
Not sure to understand the math in this article ...
you are saying 20.5 M jobs are in goods out of 148 M jobs .. this shall be 86% and not 84% as you stated in the 1st paragraph of the article ?
Agriculture
1
The author conveniently leaves out what American's spend in other countries on their services like in Canada when an American buys a bowl of soup at a restaurant.
If you look at the balance of trade between America and other countries, our service related exports are listed - mostly business related services. Also much of our 'exports' are actually manufactured in other countries and much of it probably never touched American soil.
To give you a real-world example: I worked for a company who pretty much owns the market for Video On Demand (VOD). Anyone who has ordered VOD are more likely than not using their video servers. Out of 1023 employees, 13 actually work in manufacturing assembling servers. Everything, from the case to all it's components was imported. There may be a few chips actually made in America but they are few and far between. There is one component that is actually designed by the company which is a custom video card, but it's manufactured in SE Asia. Everything else is off the shelf.
Economists seem to live in a different universe than the rest of us. They cherry pick examples and only stress one side of the issue. Like illegal aliens for instance. They will point out the 39 billion in taxes they pay while leaving out that they cost taxpayers 350 billion.
1
This article does a great disservice (no pun intended) to readers because it largely equates "service industry" with low paying jobs like blackjack dealers and hamburger flippers.
This could not be further from the truth. Yes, some service industry jobs are low paying, but the vast majority of us work in the mid- to high-wage service industry. If you work for any company that discovers, invents, improves, creates, sells, delivers, programs, teaches, etc, then you are a service industry worker. Even the majority of Ford's workforce is "service". Only the people physically bolting seats to the chassis on the assembly line are "manufacturer". The rest - designers, programmers, architects, R&D, executives, marketers, engineers, consultants, sales, finance, secretaries, etc - they are all "service" employees. So are doctors, lawyers, architects, engineers, entrepreneurs, small business owners, basically anyone who works in any kind of office, big or small, whether that office is in a tall building or even on a manufacturing floor. And that doesn't even include the traditional service industries: waiters, hair dressers, gardeners, teachers, dry cleaner, etc...
Get it? It's practically everyone! And it's not just in terms of number of jobs. The economic output of the manufacturing sector is less than 15% of total US GDP, more than 5x smaller than the service sector output. Ignoring, or worse, endangering 80 % of our value creators AND our economy is irresponsible and stupid.
2
Max very correct. The newer name for the economy is rentier capitalism in Guy Standing’s work, The Corruption of Capitalism: Why rentiers thrive and work does not pay, and The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality, in Brink Lindsey recently released publication.
The income shift that has occurred since basically 1980’s on is a shaft to the service sector with the big chips going to owners, rather that producers; solutions complex if they ever are attempted.
2
I doubt he really knows or cares about what he talks about. He's selling a retrograde vision to retrograde people. You know, way back in the 50's it was all (so the vision goes) white families behind white picket fences. Factories filled with white men eating from lunch pails their wives filled while wearing cocktail dresses and pearls good; offices with EEO and annoying stuff like nonwhite professionals, bad. All he really wants is to assert dominance as long as he can. He found his base, he caters to their ignorant views. The rest is window dressing.
4
It’s fascinating to read some of the comments here. Apparently some contributors have never heard of King Canute, who presumed to reverse the tides by royal decree.
3
Trump is not the only poorly educated government leader in the USA. Look at all of the governors and their silly sales tax systems where only selected products are taxed based upon a belief that physical products make up 99% of that for which consumers spend their money which was accurate 75 years ago when their sales tax laws were set up. Today most of us spend more on services than physical products. So who is dumber here?
1
Trump is a con man.
Trump has no interest in anything but pulling off his con.
It has nothing to do with what is actually going on.
That’s the definition of a con.
So, basically we're the service clerks for the Chinese. Great economic model.
1
Trump has never let the facts get in the way of a good story.
Irwin states 84 percent of jobs are now in the service sector. As we approach a total post-industrial economy, American becomes increasingly a bifurcated society of mostly white elites (the “winners”) supported by a vast multi-cultural / multi-ethnic service class, with the remnants of middle America relegated to be a quaint curiosity. Eventually national wealth dissipates, the service class revolts and a societal collapse. No thanks – this is wrong!
1
In an age of syntels & virtuality, global economy by century's end will likely be 99% servicial, 1% handicrafts.
The fact that Trump wants to end illegal immigration speaks to his desire to help American service workers.
That Trump would also like to help the 20.5 million Americans that you just cast off as people who "make stuff" is certainly laudable.
1
Trump makes stuff! He makes stuff up.
Trump’s absurd steel tariffs will hurt U.S jobs and industry. It's been referred to as his very own brand of economic illiteracy. As well as willful, relentlessly stubborn ignorance.
Described as "unglued" and angered by the scandals surrounding him, he made a fully impulsive decision on tariffs---considered ruinous to our economy.
Then started bragging/laughing about lying to Canada's prime minister. The sad situation is he made up fake stats and talked falsehoods. As such, he outed himself as a buffoon on the global stage.
How could he not know we have a trade surplus with our nearest neighbor Canada? It was also reported he made a threat to unilaterally pull out U.S. troops across the globe unless he got what he demanded on trade.
Can you imagine if Obama said that? And on the other side, can you imagine Trump ever getting us out of the severe recession that Obama faced when he got in office?
No wonder economic adviser Gary Cohn left Trump in protest.
2
"Most Americans produce services not products". The author is totally disingenuous and grossly ignorant.
The reason Americans are engaged in services and not designing and building new products and factories to make those products in, is because, simply, our factories and manufacturing industrial capability was literally dismantled and shipped overseas.
The problem is not that Americans are engaged in services. That is part of the economy. The problem is the shipping of manufacturing offshore and then claiming, irresponsibility and greatly wrong, that in effect we are no longer a manufacturing and post industrial economy.
Service jobs and even some service exports should never be the mainstay of the American economy. Manufacturing, industry, research and development of new technologies and new industrialization should and must be the foundation of the American economy. We do not have service jobs because manufacturing is dying. We have service jobs because American was sold out and the manufacturing base was dismantled. Service sector jobs are important but not critical to national survival. Manufacturing is the backbone of American security.
This article is false and misleading and has no basis in fact. It is a great lie. Our economic fate and future remains in our ability to be a great manufacturing and industrial nation. Services cannot protect and defend our nation. Only industrial capacity can do that.
4
The problem is that now in the ‘Globalized world’ profit seekers are free to go where the labor is cheapest so that even China is loosing industries to low cost neighbors. China wisely has moved to assemble of parts produced elsewhere; America could do that if it had a business class as wise.
2
President Trump Saturday a day or 2 ago that “I just make it up”. He’s nuts guys. Shocking news?
1
In defense of Trump's trade policy position.
How long does the US can maintain its military superpower position in the absence of a robust industrial base?
What is the alternative? outsorcing war materiel production to price competitive China?
5
Did Mr. Irwin stop to consider why there are so few jobs in manufacturing? Could it possibly be because most of the physical goods we purchase are made in China?
An interesting analysis would be to measure how many manufacturing jobs are supported by American purchases. How many Chinese workers are employed in manufacturing goods destined for the US? That is a better measure of the impact of the manufacturing segment on US employment.
2
All the trumpites I know flock to Walmart at least once a week to fill their buggies with made-in-China goods.
Oddly it's the progressives I know, me included, who shop locally, go out of our way to buy regionally produced goods even if they cost more, and maintain awareness of how our spending impacts the economy and the environment.
6
40% of the Chinese labor force are manufacturing,or more recently assembling goods, destined for the US.
products produced locally cost more. walmart sells products at the lowest unit cost possible. walmart vendors must have cheapest manufacturers and that is not found in the USA
1
Since early in the 20th century most of the jobs in the U.S. have been in the service industries as technology reduced labor in both manufacturing and agriculture. U.S. manufacturing output and the subsequent number of manufacturing jobs in the post-WWII era was distorted in the world's economy because of destruction of most of the industrial base in Europe and Asia. As these areas recovered and expanded their industrial base it only makes sense that some of the manufacturing jobs would relocate outside of the U.S. Coupled with further advances in technology, the good old days in the manufacturing sector are not returning.
1
Trump's emphasis on manufacturing is misguided! His lifetime experience in selling from empty wagons should have taught him that promotion, not production, is the key to prosperity.
The value of widgets and trifles is not in the manufacture but in the shipping, handling, packaging, promoting, and selling. A bolt of cloth made in Bangladesh is hardly worth the cost of shipping until it is fashioned, cut, sewn, and promoted by Givenchy in Paris. Then, one of the Trump women in New York will pay a small fortune for it.
Low-end manufacturing is dead-end economics. Handling and hype are the jobs of the future.
5
US number one in mobile phones and information technology. GM and Ford along with Germany and Japan dominating world auto markets. Even in Germany there less reliance on volume manufacturing because it makes more sense to assemble autos everywhere; like MINIS made in Britain. As for tourism this depends on exchange rates. US dollar drifting downwards with looming trade war with China with negative consequences. IMO: anti-Chinese tone seems a bit rich coming after many US corporations made a fortune in China with their miracle economy raising living standards. TESLA upset with 25 percent Chinese import tariffs however consider the Chinese point of view. China protects itself from waves of imported luxury foreign cars. US should do the same...or devalue US dollar making imports too expensive. Sudden changes will hurt everyone. Be careful what you wish for; as the saying goes?
2
All correct but it is time for the dollar to devalue.
We are losing jobs in the service sector to low-wage nations. We should impose tariffs on call centers and other off-shored services.
1
This President has NEVER been interested in actually learning about the nature of his job and what information he needs to do it properly, he just responds from his gut and, to him, that is good enough. When it comes to services, tourism in America is a multi-billion industry which as a result of Trump's actions in his first year as Presidenct has resulted in 4% drop in tourism at the cost of 40,000 American jobs.
The Governor of Florida recently visited looking for more Canadian tourists since in the last year, of the 800,000 that normally visit annually, there was a 25% drop from the year before at the cost of well over 1 BILLION dollars in revenue and a significant loss of jobs.
What else has Florida really got other than tourism? Clearly, they think services are important.
6
It has rising seas--think scuba.
1
Orange juice...occasional space missions to the Moon or Mars. And voting machines that got GWB in the White House...a step backwards perhaps?
But for that great majority of people who work in service industries, it might be reassuring if the president himself acknowledged more readily that there’s more to a modern economy than making physical stuff."....
Neil conveniently leaves out of his list of "big ones" in the service sector those jobs in health, medicine, education, research, transportation, environmental clean-up, to name a few, all areas the Trump and the GOP budgets want to cut. I suspect many in the service sector are leery of just an acknowledgment.
3
Not a zero-sum game. Services AND "making stuff" are important. If service work were enough for our nation, why aren't there enough well-paying jobs for everyone? Service jobs are more numerous today because that's mostly what's left after we gave away the manufacturing jobs to other nations. While we were at it, we failed to help abandoned workers transition to new ways to support themselves. Expand your thinking instead of parroting the PC view, for crying out loud.
3
Hillary Clinton had big plans for retraining unemployed workers. Trump has nothing. For crying out loud.
2
Paul Krugman hits the nail on the head: "What we need .. universal health care, .. investment in infrastructure, policies to help families and .. empower[ed] unions.. . .. [T]rade.. problem .. a way to duck real solutions."
See https://www.nytimes.com/2018/03/15/opinion/paul-krugman-aluminum-steel-t...
We produce about 19,360 BILLION - a even taking the deficit as 800 Billion represents about 4% of our economy. That is to say we spent money to make money, do what we could not otherwise do, or obtain discretionary pleasures.
I look at it this way. Let's say you are a lumber mill on the border of Canada. You Import $100 of logs from them; then produce product from those logs worth $300; you sell that product to the local ABC Construction; ABC then builds a local Garage for $600; that Garage is worth $1000 in rental property value. The Trade Deficit here is definitely NEGATIVE! but where is the problem?
OK you say those Canadian Logs took away a profit opportunity from a Local Logger and the Local Farmer who was hoping to sell Timber Rights. Fair point but why didn't that Local Logger bid and win under that Local scenario?
You say because the the Canadians dumped the logs for $100 unfairly - the real cost for those logs is $250! Fair point... but.......
Local Mill buys logs for $250; must sell lumber for $450 to make it worthwhile; ABC can only charge at most $625. Too low not feasible .. economy suffers!
Problems INTERNAL - mostly caused by GOP!
3
Why do I feel this article on remedial international business is dumbed down for an audience of one. One with little hands and a penchant for pornstars. What have our country become where we have to publish cliff notes for a president. The entire world is laughing at US.
3
That's the point! Trump wants America to produce more stuff. Continue producing services, and really, really increase producing more stuff. Stuff is good. We like stuff.
2
Mr. Trump uses whatever "facts" fit his own narrative. That has never changed, so we would be foolish to expect him to change now. The irony is that most of his businesses, like Trump hotels, are service businesses.
3
To all those commenters who say that the manufacturing sector is more valuable (or pays better, or is stronger) than the service sector; who say that we absolutely need to protect the manufacturing sector at the expense of the service sector to keep our preeminence in the world, I have one question for you:
If the US was a person, and if you were that person, and assuming that your goal is to be healthy and robust, who would you rather be?
The person who invents the iPhone...
or
... the person sitting at the assembly line building 100 of them a day?
Trump's misguided trade policies endanger most of the job creators - inventors, entrepreneurs, small and large businesses owners - and just about everyone they employ in order to "protect" less than 20% of the workforce and the economy. I put "protect" in quotes because the number of people actually protected is actually smaller. Remember, for every person that makes steel being protected, there are plenty of other people that make things with steel. Things that are now 15%-25% more expensive to make and more expensive to sell. When those washing machines and cars don't sell so well because they are more expensive, who's jobs do you think is at risk?
Trump is a fool. But his supporters, the ones who are most likely to get hurt in the rust belt and in Michigan, are the bigger fools for following him.
3
Except the option did not seem too bright, especially with Bill pushing foreign trade moving jobs with NAFTA and China to the WTO.
And figures I've read this year indicate there's been a double-digit percentage drop in tourism to the United States from other countries because of Trump's policies. One widely-reported example being the Canadian Girl Guides cancelling a trip last year because of fears some Canadian Muslim girls wouldn't be allowed in; another when an older white Australian children's book author was subjected to such an ordeal on her 100th+ visit to the US she vowed never to return. So those "service exports" related to tourism are down. Good job, Trump!
4
Trump's invariably brilliant at specifically targeting manufacturing workers in the Rust Belt with his ever move. Yet this seems like a palpably insane approach to winning in both 2018 and 2020, since so narrowly appealing to these workers and coal miners so radically alienates almost all the rest of the electorate, except for the Shel Adelsons and Kochs who bankroll Trump.
2
Our free-trade-taliban politicians i US and EU seem to be paralyzed by the eastern companies' onslaught and the feeding frenzy which takes place around our all-you-can-eat technology company smorgasbord.
East Asian companies have, in close collaboration with their own governments, been plucking US and EU like feathers from a live goose, buying our companies seemingly without any noteworthy opposition. Our politicians are just standing idly by, in silence, while they're buying one Western company after the other, like this somehow doesn't concern our politicians, or that it somehow would be impolite to express any reservation, much less taking any concrete actions stopping it.
Our politicians should know they represent us and our children, and our children's children, because failure to act in a coordinated way will have multigenerational consequences.
They don't seem to understand that you can't have a liberal trade policy if the other side, east Asian countries, have a mercantile one. They have a long-term plan where their countries' long-term needs supersede their corporations' short-term interests. Here, in the west, the adoption of uncompromising lib/con views on individualism and the dogmatic views on private ownership, have led to the exact opposite world view. We allow our companies' short-term whims to supersede our countries' long-term interests.
US and EU must act together, because China is already too strong for us to act on our own.
3
It’s complicated, FDI is a plus for the GDP, and it is an Export, the resulting profit when it overcomes the investment expenditure, is an Import. And Chinese owned firms are very likely to be looking at the growing Asian market as customers, again beneficial for the EU and US and both need employment even if working for a foreigner.
Have we modernized past products manufactured by heavy industry? What about electronic? Service economies aren’t modern economies; whatever that means. Changes resulted from trade agreement designed to mitigate the geopolitical financial risk of overseas manufacturing. It’s a labor hedge, not progress, and certainly not organic.
Most services exports are back office support to American companies. The IP we export can be – and is - replicated through education and theft. China plays this game. Their manufacturing infrastructure is build up now so they’re hungry for raw material. In fact, China imports American steel and copper while subsidizing domestic fabricators to drive down our export prices.
The EU plays a variation of the China game through international trade bodies and climate agreements. Trade regulations are designed to discourage US imports and protect EU industry from their comparatively higher manufacturing costs. That’s why they threw a fit when Paris died.
Seem like all our trade partners are whining. You’d think they’d be happy those dumb Americans are attempting to revive plebian manufacturing. Less competition for them in the modern, progressive service economy. They’ll make tons of money and leave us in the dust.
But there’re not. Interesting, no?
1
I'm looking at the headline: "Trump Ignores That in Talking About Trade".
I don't think that's a good way of characterizing this problem. Either "is ignorant of" or "lies about" or "spins politically targeted drivel about" would be more to the point.
1
Trump tells "stories". He mischaracterizes people, national and international situations on a daily basis.
One has only to look at the firings of Comey and McGahn, two highly respected FBI directors; the nearly hysterical frenzy about tariffs on aluminum and steel imports, when U.S. foundries are in no way capable of supplying American needs; and the belief that Kim Jong-un can be successfully negotiated with, when he already operates under everyone's radar, and like the slickest pirate ever, obtains sanctioned goods from around the world regularly.
So Trump's blindness to, or ignorance of, the nation's service sector is to be completely expected.
The problem is, with his fictitious stories, he creates pandemonium and stress. There are people frenetically lobbying in D.C. now for an exemption from his recent tariffs -- a completely unnecessary dog and pony show, when Trump knows he'll have to cave... he doesn't want to pay for new U.S. foundries.
Unfortunately for Americans, Trump is doesn't see his constituents, or reality, clearly. We can joke about the nearly invisible mob at his inauguration, but he saw millions.
This blindness, and creative story-telling, to himself and others, harms people, through slander and libel, to promising the return of industrial jobs, an impossility, instead of jobs re-training in technology or service industries, and endangers the world with his cavalier attitide toward Kim Jong-un.
This blind man must go.
1
What you say is true but the bottom line we cannot compete with blue collar jobs farmed out to slave labor countries.
We should have a fair shot at them with fair, non onerous tariffs put on these countries to even up the playing field.
We want to bring them up to our level, not go down to their level.
2
The foreign workers are not 'slave labor', China has more labor laws than what has survived in the US, and wages are rising putting pressure on Foxconn for example to locate elsewhere e.g. the US. But the wages are generally below EU/US levels yet.
Thank you for your reply wsmrer. What you say may be technically true, the wages in China are rising and not as poor as Vietnam, India, Mexico or others countries.
Again, the bottom line is to get these working conditions up to our standards. They don't even have to be equal, just competitive.
Again, we cannot compete with de facto slave labor.
The slave masters will tell people that $2 an hour is the standard of living in Mexico.
I don't see a army of US migrants jumping the wall to get into Mexico but the reverse is true.
You can't make a living taking in each other's washing. Third world nations don't have industries so they send their raw materials to other countries and buy back manufactured foods at the highest prices. The United States has so degenerated that it no longer manufacturers it's own aspirin, it other drugs, it doesn't manufacturer it's own steel or weapons, it doesn't manufacture a myriad of thing. At any time it's trading partners could withhold critical shipments and cause great suffering in the population.
3
"Most Americans Produce Services, Not Stuff."
Maybe that is the problem.
1
Since the U. S. still has the largest economy in the world and employment is at notably high levels maybe there isn’t really a problem.
1
But using P.P.P. index China has pass it already and plans to move into number one spot by 2049, the 100 anniversary of Mao's revolution. Many estimate earlier; is that important? And then there is India.
Finally, a report bringing us the well known fact, or should I say "eternally well known fact", that it is manufacturing making countries economically strong.
Why went Rome down: it was only militarily strong.
2
Retail workers in St. Louis and Detroit would be FAR better served by thriving factories in their communities than by an occasional Canadian tourist wandering in to the shops where they work. A strong "stuff producing" economy would enhance the job opportunities and increase the wages of service workers, just as it used to do.
But our "stuff producers" would rather produce their stuff with slave labor in unsafe sweatshops overseas, and big finance, big pharma, and big software want access to foreign markets, even if it means the gutting of our own "stuff producing" towns and cities.
We are engaged in a war between investors and the people they employ. Mr. Irwin has never made any secret of which flag he follows.
1
There are only 20 million workers who produce stuff because we traded those jobs away. We could have at least tied some environmental regulations to them so the Chinese would not have to clean up there countries air and water pollution.
1
There are over 100 million workers in the U. S. private service sector. What do you have against those good people who are working so hard to keep the U. S. economy #1 in the world?
Manufacturing has always sought to minimize the cost of making things, through technology (think 19th century cotton mills putting hand-sewn producers out of business) or using cheaper raw materials (cotton’s cheaper when it’s picked by slaves) or finding a cheaper labor force (companies left New England for North and South Carolina, then left there for Mexico and then moved to China when workers began to get “too greedy”).
Manufacturing jobs that everyone thinks are so wonderful are mind-numbing, back-breaking work. Not only did companies evolve, but WORKERS evolved.
My grandfather left a small farm to earn money (and kill himself via black lung) to work in the coal mines. My father was determined not to do that and got a “clean industry” job in a paper mill. My brother and I were determined not to be a slave to an 8-hour day, 6 days a week, 50 weeks a year of drudgery and went to college to become teachers.
The manufacturing jobs ain’t coming back folks. And unless the salaries and benefits go up and up, people aren’t going to do that...stuff.
Wishful thinking.
16
Not only does Trump ignore it, I don't think he knows it! Although, he has probably made more money on his name than on physical efforts in his named buildings. What amazes me is the number of blue collar workers, who he has abused throughout his career, are the very people who put him into office and continue to support him.
3
The amazing thing to me is that Trump, himself, has never produced any goods. He has developed real estate, run an airline, run casinos, appeared on a reality TV show, and licensed his name to others to put on various products and real estate developments.
A significant portion of his net worth is in intangible assets, principally his name, his likeness and his trademarks, which are not related to the production of any goods.
Why he would think that producing widgets is the most important thing an economy can do is beyond my comprehension
4
I think this it Trump's point. We have a "stuff" imbalance because other countries are not playing fair - they put up barriers to US "stuff" while we let their goods come in freely. By Trump's simplistic reasoning, if you have an $800 billion trade deficit then cutting off all trade will result in a net gain of $800 billion for US manufacturers. A lot of the things we import are no longer made here, but again that is another of Trump's gripes. He wants to recreate the US economy of the 60 years ago. He wants to make America great again - like it was in the the 1950s. To his mind that was America at it's best. Trade was an insignificant part of the economy back then. We made what we needed in huge smoke-belching factories that littered the countryside. It was an economy powered by coal and oil, and run by white males. This is Trump's "vision" for the country. He sees things through a rose-tinted rear view mirror.
2
This change has been coming for years. It's too bad that our business models haven't changed with it. What has changed hasn't benefited most workers. Service workers are often underpaid and undervalued.
But the most serious problem working Americans face has nothing to do with Trump and everything to do with how businesses treat employees, hire employees, train or don't train employees, and pay them. This country has made it too easy for corporations of all sizes to shirk their part of the social contract: employees do the work and employees receive decent pay and benefits in return. Instead of that we're discriminated against for our age and experience, our gender, our race, or whatever the employer can find as a reason not to hire us or pay us according to our skills.
A country comprised of businesses that refuse to treat their workers even half decently is going to experience some or all of the problems we're currently seeing: long term unemployment, lower participation in the workplace, more poverty, more social distress, less productivity, etc. And the advice given by professionals who do not have to worry about their jobs is useless. Telling someone in their late 50s or early 60s to start over again is idiotic. Perhaps we should start to allow people who cannot find jobs in any sector to retire with full benefits at the expense of the businesses that refuse to hire them on the basis of their age.
4
Stuff (manufacturing, agriculture, mining and logging) creates far more national wealth than do services such as services (stock brokers, waiters, taxi drivers, doctors and nurses, travel agents, lawyers, architects, economists.)
Apple, the world’s richest corporation, produces stuff — though mostly in China and India.
Making stuff also creates the need for services such as transportation and insurance.
Stuff matters. The ability to make more stuff than Germany and Japan is what helped us win World War II and it helped us beat the Soviet Union in the Cold War.
Stuff pays the core of its work force more than the big employers in the service industry, such as fast food workers.
Again, stuff really matters to the U.S. economy and our nation.
1
“80% of global spending went toward services in 2015”
“84% of private sector jobs in the U.S. are in services”
A single employee in manufacturing may be paid more than a single service-employee, but a larger share of salaries paid are in services.
BTW: I doubt any manufacturer pays a manufacturing employee more than a Hedge Fund pays. Hedge fund management is a service industry.
I see your point that such a change in economic thinking is surprising - but then maybe mercantilism seemed revolutionary in its day.
5
Actually, no.
That "stuff" drives only about 15% of the US economy.
In contrast, the service industry economic output is more than 5X greater.
Don't fall into the trap that assumes "service industry" is just low paid services. It includes more than 80% of the US workforce, spanning everyone from the walmart greeter to Bill Gates and every doctor, lawyer, consultant, small business owner, receptionist, professor, architect, programmer, designer, secretary, engineer, banker and entrepreneur between them.
5
Irwin overlooks the big picture, which is how trade in total has impacted US employment. Taking into account all trade from both services and manufacturing, the US has lost millions and million of decent-paying middle class jobs. Too many of the jobs that remain just don't pay enough to support a family.
Now we're left with some choices. We can restrict trade through tariffs to restore good-paying jobs, but of course inflation would rise. We could strengthen our social safety net and raise the minimum wage, but taxes would go up. Or we could leave things as they are until so many have it so bad that the foundation of our society is deeply shaken.
What's your choice?
1
Whatever we do there will be consequences. One further consequence of tariffs is that more jobs will be lost than gained.
1
The US is now at or approaching a trade deficit in goods of $800 billion. Is that negligible? The overall deficit is somewhat smaller because we do maintain a surplus in services but the net number is still huge. This amount represents a considerable loss of jobs. There is also no reason to think that many more service jobs could not be outsourced as the developing countries ramp up their training and computer usage. The reason that jobs are leaving the country is not because of robots (does China have smarter robots?) - automation has been going on since the beginning of the industrial revolution and productivity growth has actually been slow lately. American workers are being thrown into competition with very low-wage workers in developing countries in order to reduce overall wage costs and increase profits. In other words, globalization is being done for the benefit of corporate profits and not the welfare of American workers. American workers would like to see those in other countries get ahead, but not at their own expense and in order to increase inequality in this country.
The arguments of Irwin and other globalization apologists assume that the process has led to improved overall performance for the US but this is obviously not the case - economists would not be talking about "secular stagnation" if it were. Why should American workers support the status quo in international trade when there are no benefits to the US except for high-income people?
8
Then tell Americans to stop going to Walmart and insist on buying the absolute cheapest version of a product available...that is what drives use of low cost overseas manufacturing. If Walmart didn’t find that 10 cents lower cost didn’t drive sales, they wouldn’t buy from China.
7
The benefits of industrialization have always gone to those with capital. Perhaps the after effects of WWI, The Great Depression, and WWII, gave us the wrong idea about how capitalism really works.
2
Then perhaps confront those in charge of Republican controlled states whom under the guise of "freedom of choice" have implemented "right to work" legislation which, in reality, is designed to weaken unions and drive down wages. This is done to increase profits for the politicians rich benefactors and has nothing to do with globalization.
You may also be interested to know that contrary to perceived popular opinion, poll after poll confirms when Americans were asked, "would you be willing to pay significantly more for the same product currently made overseas, if it meant employing American workers"?
The majority stated the they would not or could not afford the more expensive American made product and would prefer the coniderably cheaper import.
Clearly, its complicated.
1
The good news is our president seems to have an accurate understanding of how 16% of the economy functions relative to the trade deficit.
The bad news is that by bringing Larry Kudlow into the administration, that percentage is likely to drop.
5
The data are straightforward, 13.5% of jobs are in manufacturing or extraction in the US and it is not going to get any better. Those jobs are not coming back no matter what a politician tells you. The US is not competitive with the rest of the world and tariffs won't change that economics. Further just look at the inroads of technology and automation on the manufacturing and extraction sector. That, too, is not going to change and will displace even more manufacturing workers no matter what happens with tariffs or trade. It is happening across the sector and agriculture.
6
Oh yes, all those great service sector jobs like those at WALMART, which is the largest private sector employer. And how much do those jobs pay? Not much, and they provide little in the way of benefits. Most of the well paid manufacturing jobs that were lost were replaced by low wage service sector jobs.
2
Manufacturing jobs were not replaced by service jobs, the economy now requires more new service workers and many with education do very well. The days of going from high school to lifetime manufacturing career are long gone, just as happen to all the agricultural workers last century.
Do you really believe that every job at Walmart is for stock clerk or cashier? Did you know there are more medical and nursing workers than Walmart employees? They just don't all work for the same company so you can lump them all into your rhetoric.
8
Most of the jobs at Walmart are low wage jobs. The preponderance of low wage jobs is one of the causes of stagnant wages. Manufacturing jobs aren’t there in significant enough numbers to help push wages higher. This is a direct result of our failed trade policies.
With time, wages, which is factor omitted in this story, will tend to equalize around the world. They are rising in China while stagnant in the west. At the same time with technological development less is spent in wages relative to the amount of goods produced. That is related to the famous Chinese steel overcapacity, which apparently is a target of the trump administration.
The important question is how value is produced and transferred from place to place. That is not addressed here. The more human labor invested in production the more valuable the product (be that a service or a physical good). Where is human labor producing more value (capital) when one can operate a factory in China or in the west with fewer workers in relation to machinery, technology, etc?
2
Suppose, just for illustration, it costs $10 to produce a widget domestically using traditional manufacturing methods, or $8 by applying automated methods, or $6 overseas and importing the stuff. Obviously manufacturing will move overseas, and those jobs are lost. Bar them from doing that, and what will happen? They will automate, and the jobs are still lost. This pretty much sums up what has been going on in manufacturing. Those 50's jobs are not coming back no matter what the government tries to do about it. Disruption is a fact of economic life and has been since the dawn of the industrial age. Those who short-sightedly thought their Dad's connections at the local widget plant would guarantee them a "good-paying" job for life (so why bother with college) made a serious miscalculation, and now they're stuck. Nothing Trump does is going to bail them out.
31
Trade includes agriculture. Why isn’t this mentioned in this article. The EU issued a list of products that will get tariffed if Trump pushes his plan. Corn and rice are at the top of this list. My area grows rice. We don’t have manufacturing jobs. We have cows, goats, and fields full of fruits and vegetables. Why no mention of this sector?
16
Agriculture is irrelevant for a country's prosperity. Only technological know-how counts. Trump is wrong when he talks about jobs. We need to bring back manufacturing, even if robots do all the jobs.
See the second paragraph.
Consider logging as a form of agriculture.
On top of that, all of these service workers are also consumers of manufactured goods. When imported goods have tariffs slapped on them, importers will pass those tariffs along to their customers, particularly since domestic manufacturers will also be charging higher prices because they have a protected U.S. market. The result will be that EVERY consumer -- including all of those service workers -- will be stuck with higher prices. Did I hear the word "inflation" mentioned anywhere?
15
As noted in the article, there are indeed two TYPES of industry in which people work, according to economists. They are manufacturing and service industries. However, things are not always that simple.
What is NOT mentioned in the article that MANY of the jobs EVEN in a manufacturing company are service oriented. VERY few in such a company actually TOUCH a product being manufactured.
Take for example the office workers - the receptionist, the accountants, the Information Technology personnel, the Human Resources personnel, the Quality Control employees, the Sales personnel, the Warehouse personnel, etc., etc. Even Plant Maintenance personnel who ensure that all machines needed to manufacture work properly.
The proportion of service people in a manufacturing company depends on the industry. For example, in a "process manufacturing" where a "product" is manufactured in bulk, such as chemicals, food, primary metal (steel and aluminum, for example) typically have a higher percentage of plant maintenance personnel.
They are ALL providing a service EVEN within a manufacturing company.
Economists do NOT consider the above. However, in a trade imbalance, such service personnel in manufacturing companies will be impacted just as badly as those who actually touch a product being manufactured.
7
Exactly!
It is apparently very valuable to have core manufacturing technologies, because countries like Japan, Taiwan, and Korea have strived to get them, and have gotten very rich doing so. They make all sorts of electronic components that are at the center of every digital device, and they are building on their manufacturing technology and developing the next generation of electronic devices.
The US may produce the core computing chips, but memory, switches, and screens are made overseas. If we want to be at the forefront of technology, we should be making these components ourselves. These are high-value-added industries using the latest technology - why don't we have them?
14
It is generally believed that the replacement of manufacturing jobs with service jobs is the wave of the future, but there are many factors including unfair trade practices which are allowed to go on. China has no iron ore reserves of its own, so it needs to import iron in order to make steel. Despite this additional cost China is still able to be the world's leading steel producer because its steel companies are subsidized by the Chinese government. In addition its steel workers are paid slave wages and the steel companies are spared the costs of pollution control. Unfortunately the pollution is exported to the rest of the world along with the steel. The Paris Accord allows China and India, who along with China is the world's greatest polluter, to continue to pollute until 2030, but the US would be subject to greater pollution controls immediately. Where do we think our steel and coal mining jobs would go if we had signed the agreement? Our past policies under Obama were so stacked against our own interests that one has to wonder what he was thinking.
8
Yes China and India have until 2030 to begin reducing emissions, but that doesn't mean they are sitting on their hands now and doing nothing about climate change for the next 12 years.
Both countries are putting in a huge amount of solar and wind renewables today so they can meet those 2030 obligations.
For example, India plans to get 40 percent of its energy from renewable sources by 2030, which means they are installing huge amounts of solar and wind over the coming 12 years.
Both countries have active plans to reduce fossil fuel use that are far more advanced than the climate deniers in the Trump administration.
You refer to China as the world's greatest polluter. So surprise since they are the world's biggest country, their factories burning heaps of coal make cheap products because Americans demand cheap prices at Walmart.
Americans, with their overly large houses and driveways of SUVs, are putting out eight times the amount of greenhouse gasses as the average Indian and twice that of the average Chinese. So it is hypocritical to complain about the 2030 deadline.
We can only hope that as China and India become more developed their citizens don't produce emissions as great as the average American. Then the planet would be in serious trouble.
The Paris Accord does not limit US pollution.
1
If the $800 billion trade deficit in goods is only partially offset by a trade surplus in services, wouldn’t it be reasonable to place a heavy focus on gaining advantages for goods-producing industries?
4
We don't produced the same goods as China does; we produce a lot of high end manufactured goods where there is more profit and use the steel as an input. In fact, only one percent of steel we let is from China. China's steel is mostly sold an input to higher grade steel we then but from Korea or Germany.
But even the deficit in goods is misleading: fourty eight percent of the goods the U.S. imports are used as inputs into other made or manufactured goods. The wood from Canada counts as an import but then it Is used to build houses which are sold as at a profit by a U.S. company at a profit. So it is not really part of a deficit but part of a profit.
7
There are a lot of people without jobs that would love goods-producing jobs. Let's put Americans back to work. China has all these jobs & it's just wrong. America first!
5
The jobs aren't coming back. Period. The companies will automate before they will spend more money to hire back expensive (compared to foreign) US employees. That is the reason the jobs are gone in the first place.
1
“is whether the Trump administration cares about your economic fate.”
The answer to this question is apparently not. The Trump administration seems to only care about Trump, the big donors and Putin.
14
May be the the problem is we don’t make nearly enough stuff hear in the US and are far to reliant of our enemies like China for good we need just a thought
3
Maybe the problem is people like you Rob K, who can't tell the difference between hear and here, to, two, and too. If you cannot compose a coherent sentence how do you expect to find a decent job?
2
Do you think the chinese workers who assembled your Iphone know how to spell? Rob K is right, our western economies are hollowed out shells.
Haha yeah. Selling burgers to each other. That just speaks to what this country has lost since "globalization." It's making things that produces a healthy economy and good-paying jobs.
5
Doctors, lawyers, bankers are all part of the service industry, as described this article. Trump's hotels and casinos? Service industry. Reducing "service" to flipping burgers ignores the scope of the modern service economy.
24
People who made minimum wage used to be able to support themselves and their families. Now they cannot. Minimum wage jobs do not cover the cost of living anywhere in the United States. There is also extreme age discrimination in America. As soon as you are over 45 or 50, have more than a decade of experience, or whatever the criteria is for being too old, you can count on being unemployed for a long, long time once you lose your job. And it doesn't matter how well qualified you were or are. All HR departments and interviewers see is your age.
We've created an entire group of people who cannot find decent jobs despite their experience, dependability, and knowledge. I know because I'm one of them. Even when we apply for minimum wage jobs we don't get them. Some of them we can't do. It's the attitude that businesses have towards employees, training and paying. They don't want to unless you're a star. Most of us aren't starts. We're hard workers.
2
Ab That may be true but the Doctors lawyers bankers and Indian Chiefs comprise maybe 10% of the population the other 90% of service workers are in extreme low paid service jobs like retail , waiters, baristas, etc. the lost manufacturing jobs that apparently many commenters are to young to remember at one time did pay well, had full benefits, and pensions. Good luck with your Uber, Starbucks and Amazon society which produced a handful of billionaires and millions trying to cobble together a living in the new “gig” economy. Sorry you can’t put lipstick on this pig.
It's beginning to seem like President Trump is living an far different world in his mind than most of the rest of us. It seems that his perception of the world he is living in stopped when the world was in the 20th Century, sometime in the 1950s. Time has stopped for him while the rest of us continued living on in the real world. Is this delusion or not?
17
Amazing. The Trump Organization is a service business. The Apprentice was a TV show. Another service business. In our president's delusional mind it seems he doesn't matter?
9
Dobler's Law: I don't want to buy anything, sell anything or process anything or buy anything sold or processed or process anything sold or bought.
4
It's fitting that the accompanying picture depicts casino work. I've met two in the past 4 years and they both tell the same story: opppressive work conditions, forced to work at least two part-time jobs because the owners avoid the need for providing benefits.
This is the story of the "new" economy.
20
Manufacturing jobs in the US have been higher paying with better benefits because of employee unions. I don’t see Trump or other Republicans backing an increase in union membership.
16
Evidently you don't know how unions work nowadays. Typically, there are two classes of employees in a company. One is full-time and gets good pay and benefits. The other is part-time, gets paid less, usually minimum wage, works only seasonally, and receives no benefits. This class is much more numerous than the full-timers. Both classes are forced to pay union dues which are completely worthless for those in the part-time category. Not surprisingly the full-timers hire their own friends and relatives for full-time but the part-timers are overlooked. The union leadership is in cahoots with the company in making this type of arrangement because the company gets away with paying less to the part-time help.
6
Just a note that I met a casino worker from Connecticut who received outstanding support from her employer when she suddenly went blind - they helped her with retraining and found a new job for her at the casino, helped pay for childcare while she went away for training with a guide dog - she said they were wonderful. The casino is run by a Native American tribe, but she is not a tribe member.
1
This article talks about 16% of jobs producing goods as of its perfectly normal.
But a country can't survive on services alone.
(It may make more sense to classify films and food for tourists as goods, but that wouldn't make much difference.)
A country that doesn't make anything is a hollowed out economy waiting for external forces to crush its shell.
What if some other country starts an international trade war, and trade comes to a halt. Our economy would be completely out of balance. What if the fickle tastes of the world turn away from American films and hotels? If people don't want our services, we will have no goods.
Trump is a walking constitutional crisis, and I have no confidence in his "analysis" (lol) of trade or his solutions.
But he got elected because he talks about some obvious structural problems that the "establishment" thinks it can ignore forever.
The employment numbers hide the fact that goods jobs are being lost, and replaced with lousy jobs for less pay.
Eight now we are expiring raw materials and importing finished goods. That is s disastrous combination.
Democrats need to setup focusing on "free trade" and start focusing on making our own economy strong, if you don't want to cede elections to the Trump types forever.
5
Not necessarily. Software (code) is counted as a service and that's taking over more and more of the world.
10
Trump's new $30 billion in tariffs against China are directly aimed at theft of service-sector intellectual property such as films and software. Service-sector workers will also benefit from evening the scales of China trade.
Where did you find the details of the proposed tariffs against China?
8
It was reported in the Times as well as most of the business media. Use the Google, Luke.
How is American intellectual property assigned to offshore shell companies accounted for? Is the money earned by that property add to our trade surplus or to our trade deficit (if it is being paid by Americans)?
6
I live in Boston home to 185 colleges and universities with over 250,000 students attending annually. A significant portion of our students here in Boston are foreign students who pay full tuition plus full room and board with no help from the schools or the US government. Foreign students are a massive cash cow to the U.S. economy. The U.S. is by far the greatest exporter of higher education in the world. In fact the U.S. exports more higher education than all other countries combined.
73
Many people don't understand that when we "export" educated persons, we are seeding the whole world with reasonable minds who could actually lead us toward preservation of our planet and world peace.
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Foreign students are why there are no slots for our kids. They pay more so it is in the interest of the colleges to admit them over US students.
2
Mountain you are also exporting people equipped with the knowledge to directly compete with you sometimes with a much less expensive labor force
The manufacturers in the US that still use human labor have turned to the prison system for their job base. The cost of doing business there is lower even than the third world countries they used to exploit, plus they can slap a “made in the USA” label on their products.
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Please provide a link supporting your claim. In most states it is illegal to employ inmates in for-profit sector activities.
This is a much hidden exploitation and despicable practice. The manufacturers should pay for the labor and the incarcerated men and women deserve compensation. This us another inhuman aspect that continues in the American “justice” system. Most other countries in the same economic bracket do much better and return more productive citizens to the community after incarceration with much lower recidivism. American exceptionalism!?
1
DJT is the greatest president of the 19th century
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Don’t demean the 19th century! Lincoln was president in that century...
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So was Buchanan. I thought he was supposed to be the 19th century’s greatest President.
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Anyway, Trump would never have been accepted as a president in the 19th or 18th century -- they were too close to the Revolution by which we had freed ourselves from the tyranny of a monarch.
Trump is more like a dark ages president -- if they had had any.
But the Americans who make stuff turned every swing state red last election. Democrats just don’t get the message no matter how humiliating the defeat.
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Blackjack dealer? There’s a 21st century job. No robots coming for that, nope. Why not shoe-shiner or burger flipper? According to BLS manufacturing workers make on average $27 per hour compared to $18 for retail and $16 for leisure and hospitality. Caesars pays its dealers about $8.25.
We don’t make stuff because the good jobs got exported. And the ceo’s who shipped them out swept up the cost savings into their own salaries. Trump may be confused about economics, but it’s nothing compared to the neoliberal nonsense foisted on us by academic scribblers and their journalistic hangers-on.
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Also mentioned in the article are service workers such as lawyers, architects, bankers, doctors, creators of music and other entertainment content, financial and insurance professionals.... Why just cherry pick the lowest paid examples?
Most people think that these are the "good jobs", along with the the high skill manufacturing jobs needed to run modern automated factories and extraction industries. The manual assembly line jobs that were exported to China are back-breaking and are not coming back to US--even China is working to eliminate them.
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We actually make a lot. 2/3 of the jobs lost in manufacturing were on account of productivity and automation, not outsourcing.
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Paul '52, the problem with that analysis is you are assuming the baseline is no growth, but in reality manufacturing output has grown rapidly in China, etc. and that growth could have partially at least been in the US.
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This is very easily explained: generally people with services jobs aren’t Trump’s base. Those who think that low-value manufacturing jobs are more desirable than high-value services jobs have put Trump in control of the bus, destination: 1950. And what a crazy ride it has become.
I don’t think that Trump believes a word of what he says or does. Nor do I think he’s really put much thought into economics, trade, statesmanship or much of anything beyond his own aggrandizement. But he clearly knows what must be done politically to retain power.
Middle-class America wants its Laverne & Shirley jobs back. What on earth do consultants and bankers actually do anyway?
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What on earth do consultants and bankers actually do anyway?
They hire lobbyists to convince the Congress to undo the protections, as inadequate as they were, in Dood-Frank and expose us to the next Republican recession which will be far worse than the 2008 one Obama saved us from.
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More validation that this administration is out of touch with the reality of the country they “lead.”
I am not an economist, have never taken even a partial course in economics, and did not stay at one of those hotels last night. Even *I* know we stopped being producers of manufactured goods long ago; I live near Detroit, so it is clear. We provide services and buy our “stuff” made in other countries.
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@Michael
Despite heroic efforts that spanned decades to try to destroy manufacturing in America, we're still number 2 in the world.
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I don’t like Trump, but I think that the decision to transit towards a service economy is something many western countries will regret more and more in the future for many reasons.
We shall not forget that in human’s history there was something like the “Bronze Age” and the “Iron Age”: clear examples of how the technology leadership deeply shaped history.
The example is especially interesting now that there is a commercial war concerning steel (which is functional to our progress, as Chinese leader quickly understood).
Do we really think that we can survive for long time relying on “services” only ? Services to whom ? And which kind of services ? IT ? Does our competitors not have IT capabilities ? The economy of services is something floating in a substrate if “real, hardware” economy...
Another example: Germany has a flourishing economy, exactly because manufacturing has not is still alive ! Until a few years ago, they were exporting MORE than China (with a population of only 80 millions, compared to around 1 billion of Chinese).
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In 2015 (most recent data) over 70% of German employment was service industry and only 27% was in manufacturing. Germany is not much different from USA in this regard. They are productive because they have invested in training and automation. China is trying to make the same transition with massive investments in AI and robotis. The transition from manufacturing to service economy is a result of increased productivity and technology, just like the transition from agriculture to manufacturing was over the past 100 years--not a policy decision. It may seem illogical that we can all survive on service jobs, but it works.
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It remains a mystery to me whether it is possible that Trump is indeed such a simplistic, out of touch thinker that he believes what he says, or if he is so sophisticated that he has accurately calculated that his base is simplistic and out of touch and therefore responsive to all his indignation. I can't tell.
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Duh. That's the whole point. Good-paying manufacturing jobs have been replaced by minimum-wage service jobs. Trump wants to change that.
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And what happens when Trump’s tariffs backfire, and US manufacturing loses even more jobs? Will that be Obama’s fault? Hillary’s?
Trumpets want to toot their horns at every perceived victory by their idiot Twitter king, and want to blame everyone else when his plans backfire. It’s time to either be all in or all out when it comes to him, and all in means all in, accepting his boneheaded decisions as well and owning your decision to support him.
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I live in Toronto. Most of my daily activities from shopping to browsing revolve around American companies. Walmart, Home Depot, Macdonalds, Subway, Google, PayPal, Apple phones, Microsoft outlook and computers, Amazon, Audible.
Everyday monies from my pocket are sent to the US as revenue.
Most of those revenues show up as service revenue. To ignore service revenue is ridiculous.
The US enjoys huge cultural influence. Combine that with innovation and American products and services dominate.
Canada is so open and trade is so free that US products and services have pushed out Canadian.
In addition, American buying power is so great that commodities and products originating from Canada are cheaper in US then in Canada.
Now it seems the Trump administration has decided that bullying Canada to get more is fair. Canada must push back even to the point of terminating NAFTA if that be so. This may be Canada's opportunity to break this unhealthy dependency.
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It's actually a co- codependent relationship. I lived in Toronto about 17 years ago. Canada is an expensive country. Canadians living in the US even say that. Most Americans I talked to living there had a hard time adjusting to the consumer prices from gas to groceries to clothing. It's a cultural acceptance of nickel and diming from banking "extra fees" to parking meters in city parks. My favorite memory is having a coin meter at a kayak launch at a east-end Toronto waterfront park. It's when over taxation becomes the norm in every aspect of society. It's one thing to visit a nice place, it's can be totally something else to live there.
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The city of Chicago taxes like this. (I live in Chicago.) I'm not joking at all. The taxes on top of taxes, and extra fees, are exactly like this.
The president has little understanding of the service economy even though he's earned almost all of his money providing services to people. Mr. President, once you've built the building (the manufacturing jobs); selling those condos and licensing your name are all service industries. But don't let that stop you from inventing "facts".
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It shouldn't be too hard for Trump to understand the meaning and value of service. Someone could just tell him it's the opposite of disservice.
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What kind of manufacturing do Americans want to work in/at? In the Trumpian dialectic he envisions a return to the factory where work is dirty, dull and dangerous but well paid. The fact is that machines have taken over most of the Three-D's of manufacturing because few people are willing to do them. Those that remain, like working in a meat processing plant, cannot find many native born Americans willing to work high-speed 8 hour shifts in huge refrigerator while risking serious injury. Does anyone really want to work in a coal mine, or do they just want the high wages that mining used to pay?
Yes, this nation has a lot of people who want to work with their hands but many aren't willing to go where the work is and be internal economic migrants. Nor is our federal government willing to fund all the infrastructure projects we need done that could use our unemployed physical labor.
No, it isn't simple and the world economy is changing despite our desire to go back to the way we never were.
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Thank God someone is finally writing about our IP exports that are NOT included on trade of tangible goods. Our intellectual property exports are HUGE. Bigger than Saudi oil exports. I've been saying this to Fox viewers for the last 6 years.
The GOP and right wing pundits leave out what is convenient, creating ignorant voters-- just how they like them
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Maybe he's afraid if he acknowledges the importance of service sector jobs he might have to consider supporting unionization in that sector!
Naaah!
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It's complicated:
"...it’s true the United States runs a trade deficit with Canada as long as you don’t include service industries — the industries that account for the vast majority of jobs."
From the US Trade Representative web site:
"According to the Department of Commerce, U.S. exports of goods and services to Canada supported an estimated 1.6 million jobs in 2015 (latest data available) (1.2 million supported by goods exports and 360 thousand supported by services exports)."
Also, the point about all "goods" or products becoming a service is crucial. The distinction between production and services is rapidly disappearing.
Any trade agreement that doesn't address this is not worth the paper it's printed on. And most free trade agreements are negotiated by dinosaur boomers from the economy of the 20th century.
So I suspect TPP didn't address Artificial Intelligence ecosystem issues, which will become a problem for CPTPP rather quickly. Should be fun to watch that one blow up.
That's why Trump has the smartest trade policy, by far, of the post-WW2 era. Not even close.
Not surprisingly, he's butchering the implementation, but he's done more to level the trading playing field in the past month than anyone in the past 70 years. And I dislike him as much as anybody. Facts are facts.
And it's fascinating to watch the people who have sat and watched America spiral downward as we were taken advantage of for decades now with their hair on fire about "TRUMP'S TRADE WAR!"
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TB: You claim America has spiraled downward. What a ridiculous statement. The US is the richest and most powerful country in the world. Why do you think all those immigrants keep trying to come here, instead of the other way around?
If you want to see a country that has spiraled downward, try Venezuela, where people are literally dying to get out.
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In addition to Mr. Irwin's example of manufacturing soup vs. serving soup, there's also the distinction between the soup manufacturer employing service providers vs. outsourcing needed services. Its legal department's lawyers manufacture, while its law firm's lawyers serve.
This has to do with how things are made. Productivity has risen with specialization, and specialization means separating inputs into distinct firms, so that the sector of the final product accounts for less of the total value added.
The total value of farmers' crops includes increasing shares of manufactured inputs and service inputs.
The total value of manufacturing output including an increasing share of service inputs (bought increasingly from firms in the service sector).
The U.S. economy appears to be less engaged in manufacturing (as well as in agriculture) than it really is because it supplies inputs to manufactured goods (and agricultural goods) that are accounted as services. That's because of U.S. comparative advantage in expertise.
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This is what I’ve been saying for some time; America is a country of client service providers. How many people can talk about the iPhone? How many people can actually make one?
2
Gormley and others apparently yearn for the ‘good old days’ when the majority of ‘middle class’ Americans were consigned to dangerous, mind numbing, soul and body crushing non-union jobs, in dangerous factories, mines, slaughterhouses, sweat shops, without benefits, without safety regulations, without environmental controls to prevent those factories from poisoning the air, water and soil where the workers could afford to live.
Why, that was a far rosier picture than today, when fewer of us need to risk life, limb and mind to eke out a living. We’ve allowed much of that grunt work to go overseas - and much of what remains here is being done by immigrants who are still hungry enough to happily perform hard physical labor if it will give their kids a leg up to a ‘better life’ - as bankers, health care professionals, software engineers, pilots, lawyers, and other service professionals.
So if our trade policy kills the service sector, what’s the fate of the overwhelming majority of us firmly planted in the middle class, working in the service sector - perhaps load us all on buses and ship us to ‘re-education camps’ where we can pick lettuce, sew shirts, operate drill presses, and salute?
Balderdash. If our federal tax policy were designed to rebuild infrastructure, instead of fattening already fat wallets, many of those displaced by the shift to a service economy would have plenty work, and all of us would benefit.
Trade war will not improve the quality of life for anyone.
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Excellent analysis, Mr. Irwin. Please work up a simpler version, with shorter words and some nice pictures, so that our Chief Trade Negotiator might be able to understand.
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And mention Trump in every sentence, otherwise he can't be bothered to look at it.
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JUst one point. No Canadian that I know would stay at a Trump Hotel.
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We have mostly service jobs because global corporations have successfully shipped most of our manufacturing jobs overseas. This is not all about labor costs, much of it is a means to avoid environmental and labor restrictions in the US and Europe. Besides every global corporation is eager to do whatever it takes to gain access to the huge Chinese market. Global corporations have no national affiliation and will write American workers off in a heartbeat. Trump is correct to worry about China, but clueless as to what we should do.
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Quite true, and that needs to change in a very massive way. Just what services do we net provide other countries that they have options for? Most of our customer service is by foreign people.
Trump lives in the past;trying to bring everything back from 1950.America is a service economy now; not a production economy. Wishing to bring the past back is foolish and dangerous. Exactly the same as Trump;FOOLISH AND DANGEROUS Ray Sipe
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Right on, Ray. People forget that alot of those jobs, particularly those based on the mining and burning of coal, were dangerous to the point of deadly, and so was the pollution. I fail to understand the nostalgia for black lung and acid rain.
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There is another aspect that needs to be taken into acccount as well. US owned multinationals operate around the globe. Their capital and revenue flows overwhelmingly favour the US. Plus they now have integrated logistics chains that would suffer badly in a trade war.
2
I think the author misses the point. The only reason America produces more services than goods is precisely because of our bad trade deals. It's amazing how a problem the president is trying to fix now becomes "the way things are" to some Trump critics. Remember when the liberals used to support the middle class and manufacturing jobs?
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Liberals still support workers. It's called unions, which expressly support worker's needs. Republicans always side with corporations against workers, rich against poor, and prioritize profits over human safety.
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disagree. we produce more services because so many pieces of manufacturing jobs are now automated, taking the need for humans out of the picture. we have sent manufacturing jobs overseas because we like having our waterways clean and our air breathable. if you want to bring in political parties then saying republicans are a friend to middle class, low-income people is laughable....if it didn't hurt so many people.
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The gains in efficiency from manufacturing are far superior (order of magnitude) to gig work in service. In addition, gig workers have difficulty accessing scale from service work. State enterprises with zero cost of capital are monopolies. Pubic debt in China is 2.5x GDP. Long overdue. America first.
1
Right, that’s the only jobs pretty much left - serve. Serve the rich, that’s about it. Hopefully Trump brings us some other way to make the rent because I for one am sick of what I do for a living.
9
Well, that is part of the problem, though we import stuff because of this obsession with "stimulating growth" it creates a nasty feedback loop of capital flows that increases demand for services and diminishes demand for goods production. That is why the trade deficit is a necessary and destructive evil of capital flows. Without it, the US can't generate enough credit to fund the economy and with it, the US is gutted of production for services via debt. Donald Trump, like to many Democrats think the modern system is great, it is just that pesky trade deficit that shouldn't exist...........uh because we are being taken advantage of. That is beyond dumb free lunch thinking. The trade deficit spurs consumer credit markets. Period. It also spurs asset inflation which leads toward bubbles.
That is why another Volcker moment is coming. At some point rates must rise, taxes must rise..........together. Government must increase its investment share of GDP back to pre-Reagan levels. This sounds like a contradiction, but it makes much sense. Savings will rise, investment will rise and consumption as a part of GDP will fall destroying trade deficits. Markets won't be whipping capital around everywhere thinking crassly like they do now. They will need to invest on actual production. Demand will drive the economy.
1983, a shot of meth after the demand excess of the post-Vietnam era and constricted central planning New Deal era. But it has run its course. Back to building again.
Just more traditional thinking, that says we are stuck. Worthless!!!
2
Is a blackjack croupier the best example the Times could find of a service worker? Or was it chosen because it was one of the few service positions that Trump would even be aware of?
4
Service to others is a boon
Wooden hands , wooden brain leads to ruin,
Americans who are handy
Make for life less sandy
Which is precisely what the Don is doin'.
3
Sandy Don! The clueless!
2
When we trade with a country whose economy is smaller than ours there will be a "trade deficit" in which we buy more from them than we can sell them. We are the largest market in the world of course we buy more than we sell, it can hardly be any other way. This applies to goods and services. We benefit by being able to buy things far below the cost of producing them ourselves. It's far cheaper for me to buy my electricity than to produce it myself even with solar which requires some upfront capital outlay. The whole argument is absurd.
13
Sure it is, why trade with them at all. Cheap stuff for jobs? Now for very small and poor countries running a deficit is charity, no charity for China.
2
Part of Trump's base consists of elderly Americans who want to return to the 'good ole days' they recall of the post-war years when American manufacturing was dominant. That nostalgia for their old jobs (or their parents' old jobs) is part of what underscores the "Make America Great Again" mantra. Such a mindset views service jobs as beneath the dignity of manufacturing jobs. So it's not surprising that Trump focuses on manufactured goods and ignores services in discussions of international trade.
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Yes, and Trump is showing his age, I am afraid. He will be 72 in three months.
We do not exist in a vacuum. In the 25 years after World War II, European economies were picking up the pieces from the rubble, the Soviet Union, China, and Eastern Europe had closed economies, Africa was just throwing off the yoke of imperialism, and Latin America was see-sawing between weak governments and dictatorships. The U.S., blessed by geography and resources, dominated economically in a smaller world. That world was drawing to a close by 1970. Our manufacturing took a big hit in the Oil shock of the mid 1970s, and it has taken us all this time to come to grips with it. New markets have opened up in Asia and Africa, and in our hemisphere, Brazil and Mexico are now industrialized. China finally has emerged from a 150-year anomalous slump. We have been blessed, but we now need to compete in a larger world and tariffs will have the opposite effect of making us more isolated. We need to move forward, not back.
9
I am a senior citizen, but definitely not part of Mr. Trump's base. I am well aware that my occupation for many years was in service to others, from my teen years in retail to my mature years as an addictions and mental health counselor. Please don't group us all together as though we were not individuals. I have many friends who also worked in service occupations and are much opposed to Mr. Trump's policies, while some young men I know are very enthusiastic about them.
2
You, my good woman, are what's known as an anomaly !
In your quest for support for your view, you are inaccurate in your examples of services versus production of goods. Specifically: "the audio technician on a movie set" may be performing a service but it is one that aids in the production of a movie -- one that will be "exported" for real income to our economy. Similarly, "the engineer who advises companies worldwide on the best way to extract oil" is working, in that industry, to improve production and lower cost of a raw material -- hardly a "service industry."
Determining exactly what jobs are merely (!) "services" and what contribute to the production of goods is not nearly as simplistic as you would have us believe.
Less than half of professional engineers are not contributing to the creation of tangible products. That even government statisticians may lump all engineers as performing a service, that does not mean they are all not part of the production of goods.
4
You are missing the point. The "service industry" makes intangibles. As a computer programmer I was surprised when I first learned that I was categorized as a service worker. But I was not writing code by the pound or the yard, so there you are; it's intangible. And it is not a value judgement; it's a characterization. See here,
http://highered.mheducation.com/sites/0070700893/student_view0/ebook2/ch...
9
You may misunderstand the point of this discussion: Trump looks at "trade" in terms of buying and selling factory and mining output. He looks at "jobs" in terms of people engaged in manufacturing or mining work where the end of their shift results in a tangible thing. These are the only numbers he looks at, and these are inaccurate numbers (actually he doesn't even look at these numbers). He is either simplistic or cynical, meaning either he doesn't know/understand the difference, or he sure does and he knows his base doesn't. Either way, electrical engineers and audio technicians perform a service rather than make a tangible good.
8
You misunderstand. For example, when an American petroleum engineer goes overseas and advises a client, his fee is a service export. Afterwords, when perhaps some of the oil is shipped to the US, that is a goods import. The fact that the service fee eventually gets bundled into the good does not change how those transactions are classified; independent for-fee engineering is a service, and when done overseas is a service export. Much for-fee service supports production of goods, lawyering, banking, and accounting for example, but they remain services and the US exports lots of them. The audio technician's domestic work, whether as an employee or a consultant, is bundled into the movie which is itself a service not a good, and when shown overseas is a service export.
2
As a "jobs creator" in the "goods-producing" segment of worker bees I will tell you there are not any American's out there willing to perform hard labor. It's just too much to ask for these days.
The writing is now on the wall, Trump will continue with these tariffs and trade wars hoping to bring back manufacturing. Not going to happen. In the meantime the economy is going to tank, because the cost of construction materials is skyrocketing. Wages will stay stagnant or recede to make up for high material costs and then we will have a small implosion in the building industry.
After that we can start looking for jobs at the local quickie mart. I can't wait.
37
plenty of young Americans would love a 16-20$/hr job working in a factory.
9
Not enough of them want to work that hard, not in factories, not in agriculture,and most certainly not in Perdue's chicken processing plants. That's why the jobs requiring little education but demanding really hard work are being filled by immigrants.
What an interesting and informative article--I had no idea that doctors (and some other highly educated professionals) would be considered as service workers. This information certainly expands one's notion that the service "industry," as it's sometimes referred to, is an integral and valued area of our American economy, including its role in trade. I would argue that with this in mind, there should not be such a vast difference between the taxes, benefits, and salaries earned by higher-paid and lower-paid service providers.
23
The competition that service workers face from abroad, not to mention increased efficiency from continued automation, will only intensify.
28
Mr. Trump has never let facts and the truth affect his personal beliefs. At his age, why should he change now?
Hopefully the 86% of Americans whose jobs are negatively affected by Mr. Trump actions wake up to the real world during this November's elections.
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Don’t count on it.
How could Trump ignore the valuable services of the American businesswoman Stormy Daniels?
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Oh God Blackmamba, you deserve the most recommends at 93!! you made my day re this post! The Times is too er how can we say this diplomatically, PC and stiff re these posts.to give you a plug.....but apparently the readers are not....more power to them.
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Was "The Apprentice" ever viewed outside the US and would it have been considered a service? If not, maybe our allies could educate President Trump by buying the rights to play the shows (at 2 a.m. maybe) so he'd have some real experience with that side of the economy.
2
Or just watch it play out in real time in DC.
18