I read this article in the WSJ last week takers not makers and it got me interested enough that I did some research to verify the facts. The Bureau of Labor Statistics offers the employment data and I retrieved it going back to 1960. Many of us were probably entering the work force around this period, so we probably still remember the employment situation.
Looking at what has developed since 1960, I’ll give a few snapshots.
In 1960, the employment situation looked like this:
Manufacturing: 15,438,000 employees;
Logging, Mining and Construction: 3,744,000
Total: 19,182,000
Government (Federal, State and Local): 8,464,000
By 1980, it looked like this:
Manufacturing: 18,732,000;
Logging, Mining and Construction: 5,530,000
Total: 24,262,000
Government: 16,374,000
Fast forward to 2010:
Manufacturing: 11,523,000;
Logging, Mining and Construction: 6,231,000
Total: 17,754,000
Government: 22,481,000
During this 50 year period, Government have become much larger than the “making” industries cited; it has grown by more than 2.5 times! You can see that we are manufacturing, mining, logging and constructing. much less today than we were in the 1960 – 1980 era. Granted, productivity improvements in these industries has reduced the required labor. These are all profit oriented organizations. They get to stay in business because they generate the cash to stay in business and grow. That is the incentive. Productivity improvements, benefit changes, defined benefit pension plans that went converted to 401K’s, are among the tactics used. The incentives were to “do more with less”; “do it faster”.
In government, what has been their incentive to do more with less? Government jobs are being considered a life time job with rich benefits; all of which get paid by the taxpayers!
Do these government managers and employees simply take our taxes and spend it on more and more programs that strangle those who are the creators of private enterprise? Have we become Takers and not Makers?
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Morning Bob,
What are your thoughts – is a reversal feasible for the “making” industry? If so, how?
Do you think the two sectors of employment, “makers and takers,” are in some way related or correlated?
Jobs in research, design, technology, higher education, and healthcare are also makers when those services are exported and add to gdp. Those industries require inputs in k-12 education. It\’s reasonable to assume that those jobs will go to other countries that have made appropraite investments in their schools and we will someday import services as well. Imagine sending your great grandchildren to Finland for highschool so they can get into that Ivy League College in Korea and eventually land a lucrative job in China.
Maybe fewer laws and red tape would help? Either that, or more robots in government (like industry).
Margie V; I don’t see any correlation between the takers and makers except the takers are ma=king it more difficult for the makers to exist. Higher corporate taxes is one area; the US is the highest taxed country, bar none.
A reversal is possible if the takers get off of our back, reduce taxes, cut takers costs (reduce government spending) and let the market economy run.
We could also see some return to the US of off-shore production in part because of extended lead times and crisis such as the Japan situation.
Maybe if we all stopped buying foreign made products, it would encourage more US production.
Bob,
Yes, “Buy American” should now be the battle cry.
More and more American manufactured products are becoming price competetive with products from the pacific rim and from around the globe. We are beginning to reap the benfits of some of the administations policies to restore American manufacturing, primarily from the actions of “Quantitative Easing”, which is lowering the value of the U.S. dollar relative to other currencies’ while enhancing exports and stunting imports. So, price is now becomming an advantage to buy domestic.
cragger;
I’m not sure what admin policies are in effect that are helping restoring manufacturing?
Price is not the only issue driving some manufacturing back home; what about quality and more importantly the cost of carrying inventory in-transit?
If I listen to admin policies, I get a little fuzzy!