The American Workplace

According to researcher Joseph R. Meisenheimer II ("The Services Industry in the 'Good' Versus 'Bad' Jobs Debate," Monthly Labor Review, February 1998), the TABLE 2.1 Employment status of the civilian noninstitutional population, 1940–2005 [CONTINUED] "Table 1. Employment Status of the Civilian Noninstitutional Population, 1940 to Date," in Current Population Survey, U.S. Department of Labor, Bureau of Labor Statistics, January 2006, http://www.bls.gov/cps/cpsaat1.pdf (accessed March 21, 2006)American economy has undergone a fundamental shift since the conclusion of World War II, at which time service industries accounted for 10% of nonfarm employment, compared with 38% for manufacturing. Since the 1970s the American economy has moved away from producing goods to providing services, and the service-producing sector has accounted for an increasing proportion of workers. In 1970, for example, there were 48.8 million service-providing workers, and 22.2 million people in the goods-producing sector, representing a service-to-goods ratio of 2.2 to one. (See Table 2.2.) By 2000, the number of workers in the service-providing sector was 107.1 million, compared with 24.6 million in the goods-producing sector, representing a service-to-goods ratio of 4.4 to one. In 2005, according to preliminary statistics compiled by the Bureau of Labor Statistics and published in Establishment Data Historical Employment (2005), workers who provided services (111.5 million) outnumbered workers who produced goods (22.1 million) by a ratio of five to one.

From 1992 to 2005, construction was the only industry in the goods-producing area that consistently employed more workers each year (4.6 million in 1992, 7.2 million in 2005). The number of employees working in natural resources and mining has fallen significantly in the past two decades. From a fifty-year industry high of 1.2 million workers in 1981, the natural resources and mining sector decreased to 629,000 people in 2005. The number of workers in manufacturing remained roughly the same from 1970 (17.8 million workers) through 2000 (17.3 million workers). Since then, however, this sector has experienced a steady decline. In 2005, according to Establishment Data Historical Employment, 14.3 million people worked in manufacturing. The proportion of manufacturing jobs has fallen from 30.6% of all nonfarm jobs in 1955 to 10.7% in 2005. In contrast, the service-providing industries accounted for 83.4% of nonfarm employment in 2005. (See Table 2.2.)

Service-producing industries include jobs in transportation, wholesale and retail trade, services, finance, public service (government), and more. Within the service-producing industry, service industry jobs are found in legal services, hotels, health services, educational services, and social services, among others. However, all jobs within the service industry are not necessarily service occupations. For example, while hotels are part of the services industry within the service-producing sector, they not only employ workers who are in service occupations, but also secretaries, managers, and accountants whose occupations are not considered service occupations.

The largest category of service-providing jobs is found in the group of trade, transportation, and utilities occupations (23.1% in 2005). Federal, state, and local government jobs (21.8 million) accounted for 19.5% of the total service-providing jobs in 2005. (See Table 2.2.)

Because average wages are higher in manufacturing than in services, some observers view the shift in employment from goods-producing to service-providing as a change from "good" to "bad" jobs. Meisenheimer, however, found TABLE 2.2 Employees on nonfarm payrolls by major industry sector, 1955–2005that many service industries equal or exceed manufacturing and other industries on measures of job quality, while some service industries could be viewed as less desirable by these measures.

Meisenheimer stressed the importance of examining more than just average pay when assessing the quality of jobs in each industry. Within each industry, there are jobs at a variety of different quality levels. The quality of service-industry jobs is especially diverse, encompassing many of the "best" jobs in the economy along with a substantial share of the "worst." Thus, employment shifts away from manufacturing and toward services that can, but do not necessarily, signal deterioration in overall domestic job quality.