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.

Click for interactive map

Click for interactive map

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.

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2 Responses to “Nonsequitur: Wealth and a Changing Economy”

  1. […] Trillion in debt. An economy based on part-time and/or low paying jobs in the service sector. Higher healthcare costs for most patients. Islamist terrorism. Entitlement reform. How he’s […]

  2. […] According to the Bureau of Labor Statistics, unemployment decreased to 5.5% in February. This would be considered “normal” in past years. However, given the large number of involuntary part-time workers (6.6 million) and the continuing problem of long term unemployment (2.1 million), the economy still is not creating enough full-time jobs to keep pace with demand. Also, most of the growth in recent months has been in the Service sector (Table B-1), which typically pays less and offers fewer benefits to workers. (See a more detailed discussion of the shift to service sector employment here.) […]

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