Steven Hales

GE's Immelt Thinks for Himself: U.S. Not Shifting to a Service Economy

On Mar 14 08:20 AM Howard Richman wrote:

>

> 2. <i>Employment and Level of Technology</i>. Many of our trading
> partners, including Canada and Japan, have similar levels of technology
> in their manufacturing operations, but have not been experiencing
> our rapid decline in manufacturing employment.

Howard, Canada and Japan have experienced a decline in manufacturing employment. Since 1991 Japan's manufacturing employment as a percentage of the labor force has fallen from 24% to 17% and Canada's has fallen from 16% to 11% and the US has fallen from 19% to 11%. Total manufacturing employment has also fallen in absolute terms in all three countries. The same story is true in Europe. The data are indisputable all industrial nations are shedding manufacturing jobs. China and India will soon follow our lead as services begin to dominate their economies.

Sources: CANSIM, Canada; BLS, US; E-Stat, Japan

The question comes back to my original point that the value of manufacturing is in decline worldwide. It is easier to transform raw materials and labor into goods than at anytime in our history. Labor inputs will continue to fall and labor productivity will continue to soar. The robotics and information technology industry will continue to transform manufacturing into an information intensive sector. Services will dominate. Immelt is living in a fanatsy world.

I hope you will respond to this note. And debate this point fairly. Then we can proceed to labor force issues like training and education.