Service Based Economy
The trend in the United States is to an economy based more upon services and less upon manufacturing. Many blame this trend upon globalization or the movement of manufacturing to “low wage” parts of the world. Certainly to a certain extent this is true. However, another factor is the significant improvement in manufacturing productivity and the shift from an emphasis on low skill manual labor to automated machinery requiring fewer, technically skilled technicians to maintain and operate. I watched a show last night on the Discovery Channel – “How Things are Made”. I was fascinated by the automation demonstrated in the manufacture of everything from batteries, to tin cans, to camera lenses.
The combination of low cost imported goods (when was the last time anyone purchased a piece of clothing made in the USA??) and high manufacturing productivity has resulted in unprecedented high level standard of living for those who are able to compete. I suggest that rather than a detriment, the world has greatly benefited from globalization.
Take Away Thought: We in the developed economies must share the global economic pie with those who have a lot less. Even with the huge growth in its economy, the Chinese still have a huge population living at a very low subsistence level.