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February 1998, Vol. 121,
No. 2
The services industry in the 'good' versus 'bad' jobs debate
Joseph R. Meisenheimer II
- One of the most notable transformations
in the U.S. labor market since World War II has been the
rising share of employment in the services industry and
the declining share in manufacturing. In 1945, at the
conclusion of the war, the services industry accounted
for 10 percent of nonfarm employment, compared with 38
percent for manufacturing. (See chart 1.) In 1982,
services surpassed manufacturing as the largest employer
among major industry groups. By 1996, the services
industry accounted for 29 percent of nonfarm employment,
and manufacturing, at 15 percent, was actually somewhat
smaller than retail trade.
-
- In industrial
classification systems currently used in the United
States, there is a broader grouping of industries that
are called service-producing industries. These industries
include: transportation and public utilities; wholesale
trade; retail trade; finance, insurance, and real estate;
and services. Rather than examining all service-producing
industries in detail, this article focuses on the
services industry, which has the largest share of
employees in the service-producing group. The services
industry includes a broad variety of activities, such as
health care, advertising, computer and data processing
services, personnel supply, private education, social
services, legal services, management and public
relations, engineering and architectural services,
accounting, and recreation. The article also includes
comparisons between these industries and other industries
outside of services, such as retail trade, mining, and
construction. Demand for services has grown tremendously
as a result of demographic shifts, changes in consumer
preferences, technological advancements, and increases in
competitive pressures. Some of these same forces have
contributed to the decline in both the level and share of
manufacturing jobs. Table 1 shows employment trends in
manufacturing and the other major industry groups, as
well as services and its detailed components.
This excerpt is from an article published in
the February 1998 issue of the Monthly Labor Review. The
full text of the article is available in Adobe Acrobat's Portable
Document Format (PDF). See How to view
a PDF file for more information.
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