Proponents of a service economy for America sometimes compare the recent decline in manufacturing jobs to the earlier decline in agriculture jobs. In what way are these two declines different? How might this affect the argument that a shift to a service economy will not reduce our standard of living?

Short Answer

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Answer: The differences between the declines in agriculture and manufacturing jobs introduce uncertainty about the ability of a service economy to maintain or improve the standard of living. While agriculture jobs declined primarily due to increased productivity, the decline in manufacturing jobs is due to factors like globalization, automation, and slower growth. The workforce displaced by agriculture jobs can adapt and find new jobs in other sectors, but concerns about the availability and quality of new jobs in the service sector may potentially lead to a reduction in the overall standard of living. Therefore, it is crucial to pay attention to the quality of new jobs created in the service economy and their potential impact on the population's well-being.

Step by step solution

01

Understanding the decline in agriculture jobs

First, we need to understand why agriculture jobs declined. The main reason for the decline in agriculture jobs was a rapid increase in productivity due to technological advancements and innovation in farming practices. This led to fewer workers being needed to produce the same amount of output, resulting in a decrease in employment in this sector.
02

Understanding the decline in manufacturing jobs

The decline in manufacturing jobs is mostly attributed to globalization and automation. Many manufacturing jobs have been outsourced to countries with lower labor costs, while automation has reduced the number of workers needed to produce a given amount of output. In addition, growth in manufacturing has slowed down in developed economies, further reducing the demand for manufacturing workers.
03

Compare the declines in agriculture and manufacturing jobs

The main difference between these two declines lies in the forces driving them and the implications for the workforce. The decline in agriculture jobs was primarily due to increased productivity, while the decline in manufacturing jobs is due to a combination of factors, including globalization, automation, and slower growth in developed economies. The workforce displaced by the decline of agriculture jobs could adapt and find new jobs in other sectors, such as manufacturing or services. However, the decline in manufacturing jobs raises concerns about the availability and quality of new jobs for displaced workers, especially in a service-based economy.
04

Discuss the potential impact on standard of living

Proponents of a service economy argue that it can maintain or even improve the standard of living, as the service sector provides new job opportunities and contributes to economic growth. However, the differences between the declines in agriculture and manufacturing jobs introduce some uncertainty. With the decline in manufacturing jobs due to external forces and automation, there's a concern that the new jobs created in the service sector may not be high-quality jobs with good incomes and benefits. This could potentially lead to a reduction in the overall standard of living of the population. In conclusion, the differences between the declines in agriculture and manufacturing jobs raise questions about the ability of a service economy to maintain or improve the standard of living. While a service economy can create new job opportunities and contribute to growth, it's crucial to pay attention to the quality of these new jobs and their potential impact on the overall well-being of the population.

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Most popular questions from this chapter

It has been widely claimed that many of the troubles of American manufacturing can be traced to an overreliance on short-term financial measures. Name some policies, at both the government and firm levels, that might be used to discourage this type of mind-set.

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In very rough terms, one could attribute the success of American manufacturing to effective competition on the cost dimension (i.e., via economies of scale due to mass production), the success of German manufacturing to effective competition on the quality dimension (i.e.., via a reputation for superior product design and conformance with performance specifications), and the success of Japanese manufacturing to effective competition on the time dimension (i.e., via short manufacturing cycle times and rapid introduction of new products). Of course, each newly ascendant manufacturing power had to compete on the dimensions of its predecessors as well, so Germany had to be cost-competitive and Japan used cost and quality in addition to time. Thinking in terms of this simple model-that represents global competition as a succession of new competitive dimensions-give some suggestions for what might be the next important dimension of competition.

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