"Since 1990, manufacturing’s share of employment has fallen by nearly five percentage points. This would not necessarily have been a bad thing if labor productivity (and earnings) were not substantially higher in manufacturing than in the rest of the economy – 75% higher, in fact.
The service industries that have absorbed the labor released from manufacturing are a mixed bag
. At the high end, finance, insurance, and business services, taken together, have productivity levels that are similar to manufacturing.
These industries have created some new jobs, but not many – and that was before the financial crisis erupted in 2008.
The bulk of new employment has come in “personal and social services,” which is where the economy’s least productive jobs are found.
This migration of jobs down the productivity ladder has shaved 0.3 percentage points off US productivity growth every year since 1990 – roughly one-sixth of the actual gain over this period.
The growing proportion of low-productivity labor has also contributed to rising inequality in American society.
The loss of US manufacturing jobs accelerated after 2000, with global competition the ... culprit."
