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June 17, 2011

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Account Deleted

I was wondering if this argument [1] can be used to make a case that the productivity gap between industry and service will increase in the future...

[1] http://marginalrevolution.com/marginalrevolution/2011/06/is-information-technology-a-general-purpose-technology.html

Kimmitt

It's an unexamined assumption that this pattern began in 1998. What if it began in the 70s? Then China's rise is just another link in the chain.

Kimmitt

In particular, I'm referring to the famous productivity slowdown in the 70s and 80s attributed to, among many other things, the rise of the EPA and OSHA.

21tigermike

The next step for the US is not getting manufacturing bases back from the Chinese via tarriffs, etc, but educating its workforce that seems so distraught over the loss of these low-paying jobs.

How much is Harvard? 200,000 for a 4 year stint? That's comtemptable. Thankfully, unlike the US health care system, there are great options for Americans to get educated. So why are so many crying over the loss of manufacturing jobs?

Account Deleted

Where are you getting the stats about off shoring to China from? I'd like to see what sectors the change is coming from.

I'm not that convinced by your smoking gun graph. What are the dates on the data points? The correlation could just represent offset business cycles. China was in a slump 98-99 because of the Asian financial crisis, while the US was at the peak of a boom. After that the bubble popped and was followed by a jobless recovery, while the Chinese economy expanded non stop.

Not that I don't think Chinese manufacturing policy has nothing to do with employment in the states, I don't think that chart necessarily shows it though.

Youcef Msaid

The graph about China is not convincing at all. You are looking at variation over time, so time trends where the US sector is trending down while the Chinese is trending up would easily generate such a strong correlation. I am actually a bit surprised it is not stronger (it must have to do with business cycles).

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Well, I'm glad to see that you PhD econ types are finally figuring out what the rest of us knew a long time ago: 5 bucks an hour flippin burgers aint' a union job at the steel mill.
Maybe another 20 years, you will understand that free trade is not always a good idea (and don't give me that theoretical BS that free trade is always good; like they say, in theory, theory and practice are the same; in practice, they ain't.)

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I don't think so, China developing out of a third world country will only benefit the US in the long run.
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show that the majority of workers who leave manufacturing end up in the service sector where their wages are between 3 and 11 percent lower.

I have somewhat of an issue with this statement. There are lots of people in the service sector that are making very good wages. Are we talking about HVAC mechanics, electricians,etc; or customer service agents working for IT companies etc; ???

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What about the differences in skill intensities across industries? The job losses in the relatively unskilled-labor intensive battery industry should have little effect on the relatively skilled-labor intensive machinery
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Account Deleted

Great insight on the growing influence of China in the affairs of the US. Thanks

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I think a model like Germany where the workers are on the board at companies steer a much different and better course of development than the top down American approach.The whole dialogue about education becomes much richer and diverse and skills focused. Much de industrialization happened in the 70's according to Bluestone and Harrison, 37million or so jobs were lost according to their study. Flippin' burgers may not be the worst thing in the world in a culture that rebels against education IF you have very affordable health care and housing ,I guess.

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big deal because productivity in manufacturing is increasing and this will drive growth. But this argument ignores the economywide effects of labor reallocation. Another argument that is often heard is that we don't need to worry about losing jobs in manufacturing because jobs in professional and business services are growing. buy from china

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