Nonsequitur: Wealth and a Changing Economy
July 31, 2014
The U.S. Bureau of Labor and Statistics released a report showing the shifts in our economy away from manufacturing to retail and then away from retail to healthcare and social services over the last 3 decades.
In 1990, the manufacturing industry was the leading employer in most U.S. states, followed by retail trade. In 2003, retail trade was the leading employer in a majority of states. By 2013, health care and social assistance was the dominant industry in 34 states. – U.S. Bureau of Labor and Statistics
Our economy has shifted from producing goods to moving goods to providing services for those in need. Producing goods creates wealth. Moving goods creates wealth. Providing services for those in need does NOT create wealth; it spends wealth already created.
Health and social services employers are mostly non-profits. These services are primarily paid for by tax dollars (paid out of workers’ wages) and by employer benefits (paid out of corporate profits). For example, we don’t expect a hospital to make a profit. We do expect a hospital to provide quality health care at a reasonable price paid for through medical insurance or government benefits.
We are no longer a wealth-generating economy. We are a wealth-spending economy.