The US Economy is in trouble. Not only has manufacturing been declining steadily, but, as per this recent interactive info-graphic on America’s Incredible Shrinking Information Sector, the information industry (defined as processors, producers and distributors of data, informational, and cultural products) shed over 750,000 jobs between 2001 and 2011, making it the sector that accounted for the second biggest loss of jobs after manufacturing. In addition, the customer support industry shed over 74,000 jobs, traditional publishing shed over 263,000 jobs (and 21,000 more in the last two years), and telecommunications dispatched with a whopping 567,000 jobs.
In other words, the sectors that account for over 1/4 of US GDP have been shedding jobs faster than a swarm of shetland sheepdogs combined with a syndicate of sussex spaniels sporting on a sunny day in Spain. And there can be no rebound if new jobs don’t appear to replace the old ones somewhere.
But these sectors aren’t coming back. It will be decades before it will be cheaper to manufacture most products, especially dense Consumer Purchased Goods, at home. With the innovations in wireless technology, we need a lot less telco lines, and even less transmitters, to service the same number of customers at service levels well beyond what could be expected even five years ago. Programming can be done anywhere, by anyone, and there is always someone willing to do the same job cheaper in a developing country where a US dollar is worth considerably more than the local currency. Thanks to the internet and semantic technology, there is more content at a journalist’s disposal than ever before and research is almost automated. And online (which includes over the phone) customer support can be done by anyone in the world who speaks the same language. While we can expect the job declines to level off in media and telecommunications, just like they have done in the information sector, the jobs are not coming back.
So where will the jobs be? According to a recent WSJ article on Where Job Growth Will Come Over This Decade, they will come from:
- health care
- leisure and hospitality
- medium skilled jobs
- business and financial operations
- professional and business services
- technology and information services
And the article is partially right, but these sectors won’t add the 12M+ plus jobs that the BLS (Bureau of Labour Statistics) is predicting, and won’t save the US Economy on their own — at least not without a slight change in focus in a couple of the sectors. Why? Come back tomorrow for Part II and a discussion of the WSJ article predictions.