Saturday, July 2, 2011

Service jobs vs Industrial jobs.

One of the major conservative complaints is that America doesn't make anything anymore.  Not true.  America makes MORE than China does.  In 2010,  it has a Gross Domestic Industrial Production of $2.7 trillion. That excludes services and agriculture.  The US has $3.2 trillion.   Granted, if they let their currency float, some think that the value of China's industry might exceed the US.  But if they let their currency go up, their exports would drop like a stone, lowering their industrial output.

But that's not the point of this post.  Instead, I am going to talk about the difference between a 'service' job and an 'industrial job'.

Consider a car mechanic.  If he works for the big auto-makers, he is called an "industrial" job.  If he works for a small mom and pop garage, he is a "Service" job.  Lets pump up the similarity.  His job is to install something into the car.  Maybe it's a Satellite Radio, maybe it's security system - it doesn't matter.   Now he does the exact same thing for both jobs, but one is service and the other is industrial.

The core difference between service and industrial is not the kind of work being done, but instead is there a physical product and if so, does the company working on it own it. 

Lets take a look at some of the 'nonphysical' products that make up the bulk of our 'service' industry.  Well we get financial, legal, higher education, research, and medical services.  Then there is computer programming and pretty much every Internet based business.  There is Media (Hollywood, TV, books, music, advertising, etc)     Almost all of what we mentioned are things we provide for foreigners.   Anyone that thinks we should get rid of these jobs - with the possible exception of legal services as I work for a law firm :) - would be laughed at. 

Another big issue is something called "outsourcing".  I am not talking about outsourcing to other countries, but instead outsourcing within America.  For example when a company decides that instead of painting their skateboards themselves, they want to outsource it (or just the design) to an artist, the artist gets classified as a "service", while if they had done it themselves, that same activity would count as "industry".

Despite years of bad press, the "service" industries that have taken over the US are not maids and laundry service, but instead high end technological and specialized services.  They are not crappy jobs and they are not a sign of pending problems.  They are a sign of our success and China would LOVE to steal these jobs from us.  They can't - because the service industry requires creativity and a disrespect for established ideas that regimented societies can not duplicate.    In a place where the number of children you may have is regulated, the idea of a creating a music device/store (iPod/iTune) that angers the existing music industry would never happen.

Instead service jobs are a sign of success.   Would I want to get ride of industrial jobs completely?  No.  Mainly because it is a good idea to maintain skills in case international politics makes it harder to obtain certain valuable industrial products (such as the rare earth metals that China tried to keep from Japan).

But the service industries are GOOD businesses to be in, not bad ones.   We need to brag about them, not regret them.  The jobs are better paying, safer, and just as valuable.  In a not-so distant utopian future, it is not hard to imagine robots doing the majority of actual industrial jobs, with humans being tasked with designing, programming, and fixing them.    Then there would be no human industrial jobs at all.

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