The proportions that make up America's service, goods producing, and governmental employment have fundamentally changed since WWII. The chart below outlines that nearly all US job growth since 1939 has come from the service sector, with an assist from government jobs. And as for the goods producing sector, it currently employs the same number as it did in March of 1953 and nearly five million fewer than at it's peak in 1979. The goods producing sector has been outnumbered by the government sector since 2009, another inglorious milestone for America.
Apparently, the future of US employment is a narrative about service providers serving service providers with ever more governance (chart below).
So, what are these classifications? Employment is split up among these groups as follows:
- Service (Wholesale/Retail Trade, Transport & Warehousing, Utilities, Information, Finance, Real Estate, Professional & Business Services, Education & Healthcare, Leisure & Hospitality, Accommodation & Food Services)
- Government (Federal, State, Local)
- Goods Producing (Construction, Manufacturing, Agriculture, Forestry, Fishing, Oil / Gas extraction, Mining...plus support services for these activities)
Below, US employment is broken down by sector, as a percentage of the total US population since 1939 (as far as the data set goes). The service industry is now (as a %) employing nearly 40% of the total US population...up from just 15% prior to WWII. Government employment has more than doubled from 3% to 7%. However, goods producing employment has fallen from its 1943 peak of 14% to just 6% of the population presently making anything.
If we combine those working in the service industry, goods producing industry, as well as government and divide them by the total US population...a funny thing is visible (chart below). The combined percentage employed rose from 1939 until '00, but since then the percentage of the population employed has continued to decline.
Focusing solely on US goods producing jobs from 1939 to present, the pattern isn't pretty (chart below). Lower left to upper right from WWII to '79, generally unchanged from '79 through '00, and a couple of waterfalls with inadequate recoveries since. All this against the US population which nearly tripled over the same time (122 to 325 million).
Importantly, since WWII, the goods producing industry has only created managerial / supervisory positions while not creating a single (net) non-supervisory job (chart below). Hard to say if it is technology, innovation, outsourcing, etc...but rank and file goods producing employees have been declining for 60 plus years. The ratio of supervisors to hands on employees has declined from 1 supervisor per 7 employees to 1 supervisor per 2.5 employees.
Some factors impacting these trends:
First, a peek at government vs. goods producing jobs with federal debt as the kicker. The '00 and '06 goods producing job waterfalls were offset by huge increases in federal debt. But interestingly, even government jobs have been decelerating over these same recent periods.
Next, the linkage of US goods producing jobs and the Federal Funds rate (chart below) is no accident. Each period of hiking culminated in a goods producing jobs down turn (and general economic recession). Presently, the US is still millions of goods producing jobs short of the '06 peak and nearly 5 million below the '00 peak...but the Fed rate hikes portend that another downturn is likely coming sooner than later.
Perhaps some of the explanation for the end of the US goods producing job growth, the decades of stall, and decline since '00 can all be tracked to oil (chart below). Nixon's abandonment of the Bretton Woods agreement and the creation of the Petro dollar with OPEC members spelled the end of stable energy prices and the end of job growth and opportunity for those looking for employment among the US goods producing industries. Each spike in oil prices was meet with a steep downturn in US goods producing jobs.