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What Trump is missing on jobs

You’re not likely to hear President Trump say much about lab technicians, car mechanics, veterinarians, nurses, social workers or security consultants. Yet these are the types of everyday jobs that have powered America’s transition from a manufacturing to a service economy during the last 30 years, while raising living standards and even offering a bulwark against the rise of the robots.

Trump, of course, glorifies manly, industrial-era jobs. Steelworkers. Coal miners. Bricklayers. Those are worthy professions that obviously fill a need. But manual-labor jobs have been declining as a portion of the U.S. workforce for decades, which, in general, is a good thing. Machines increasingly do that work faster, better and cheaper. And the service jobs of 2018 are safer, more pleasant and more sustainable. You can also get ahead faster if you’re willing to update your skills periodically, to keep up with a fast-changing workplace.

Trump doesn’t see it that way. “From Bush 1 to present, our Country has lost more than 55,000 factories [and] 6,000,000 manufacturing jobs,” Trump tweeted on March 7. Trump is so enraged by the loss of manufacturing jobs that he’s poised to ignore the urging of most economists—and most members of his own Republican party—and impose new tariffs of 25% on all imported steel and 10% on all imported aluminum. Forcing up the price of imports will, most likely, help create a few more jobs in those domestic industries. But it will also have negative consequences likely to far outstrip the benefits of a few additional jobs.

Trump is generally right about the decline of manufacturing jobs. But he looks at those numbers in a vacuum, while seeming to ignore how the U.S. economy has evolved into something that’s quite a lot better than it was in the 1980s. To provide a fuller picture, Yahoo Finance analyzed how employment has changed throughout the economy since 1989, when “Bush 1”—George H.W. Bush—took office. Here’s how the total number of jobs has changed in key industries:

Note: Numbers don’t round because not all industries are included. Source: Bureau of Labor Statistics
Note: Numbers don’t round because not all industries are included. Source: Bureau of Labor Statistics

The biggest change since 1989, in either direction, has been the surge in service jobs, especially in health care and business services. Jobs in goods-producing industries—the ones Trump cares about so passionately—have fallen by 15.5% since 1989, for a net loss of 3.7 million jobs. But service jobs have grown by 53.4%, which adds up to 44.3 million new jobs since 1989. In health care and business services alone, the number of new jobs is nearly four times the 5.5 million jobs lost in manufacturing since 1989.

A surging service sector

There’s a perception that service jobs are a mindless grind, barely paying minimum wage—the burger-flipping meme. Some are, but many aren’t. Service jobs run from low-paid maids and janitors all the way up to physicians, bankers and CEOs. There are millions of jobs in the middle that qualify as middle-class work with decent pay you can raise a family on. Some examples, both blue-collar and white-collar: Landscaping, facilities support, all types of administration, sales, management, security, and just about anything relating to America’s obsession with pets. In many of those industries, you can work anywhere, from the bottom to the top: You could cut grass for a landscaping company, you could design the work as a landscape architect, or you could own the whole damn company.

Besides, what’s so great about the backbreaking assembly-line jobs Trump seems to pine for (even though he never did one himself)? It’s true that 30 or 40 years ago, high-school grads with minimal skills could often find factory work that paid reasonably well, and earn consistently more as they gained seniority. Okay, great. But many of those jobs led to career-ending injuries or exposed workers to dangerous conditions that impaired their health over time. And there was nothing stimulating about doing rote activities on an assembly-line day after day.

One notable thing about the new jobs in the service sector is that many tend to be jobs traditionally held by women, for whatever reason—especially in health care. Many of the lost jobs, meanwhile, were traditionally done by men. That shows up in the data. The labor force participation rate for men has dropped sharply, from 76.4% in 1989 to 69.2% today. For women, the participation rate rose in the 1990s, leveled off, then fell following the 2007-2009 recession. It’s now 56.7%, a tad below where it was in 1989.

The decline of men in the work force is a genuine problem that puzzles economists, especially since there are roughly 6 million open jobs that companies can’t fill. Yet the participation rate for men has barely budged from depressed levels. If the real problem is that men don’t want to take jobs they consider women’s work, Trump has a more complex problem on his hands than he realizes or is probably capable of addressing.

Meanwhile, the service sector seems likely to continue growing no matter what Trump does to bring back assembly-line jobs. Despite the decline in employment, manufacturing output in the United States is close to record levels, with highly automated factories churning out more stuff at lower and lower costs. Manufacturers still need workers, but they’re more interested in technically astute people able to operate complex machines than in wrench-turners or coal shovelers.

Service jobs, by contrast, are harder to automate, because they generally involve activities robots can’t do, at least not yet—selling, leading, managing, creating and interacting with people. A lab technician or dental hygienist may not seem like the backbone of America, but increasingly, they are.

Confidential tip line: rickjnewman@yahoo.com. Encrypted communication available.

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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman

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