In Part 1 of this article, I discussed the bogeyman of structural unemployment, the fallacy of focusing on job creation, and the secondary industries being enabled by tech companies such as Facebook, Google, and Apple
Bye-bye, blue collar
It's no secret that manufacturing jobs have been disappearing. Since 1990, the percentage of total U.S. jobs have declined from 16% to less than 10% as outsourcing and advancements in technology have removed some positions and boosted productivity without the need for additional labor. While some observers call this a national tragedy and demand a renewed focus on building our manufacturing sector, others, including economist Christina Romer, see folly in attempting to resurrect the jobs of the past. In a New York Times column, she notes that manufacturing jobs have been falling for 30 years and a current shortfall in demand is plaguing the manufacturing sector along with the economy as a whole. A small tax cut would do little to stimulate it. Instead, we would "foster more growth with strategic economic policies like investment and education than with targeted aid to manufacturers." She continued: "The industry no longer promises solid wages for unskilled workers as it did for the postwar generation."
But in place of the dwindling manufacturing jobs has come a booming service economy. The percentage of health-care jobs in the economy has gone from less than 8% to 11% in the past 20 years, and as baby boomers enter their golden years, those jobs should only multiply. Health-care jobs grew during the recession, despite the elimination of 7.5 million jobs during that period, and are expected to increase by 5.6 million more before 2020. The sector has been the largest engine of job growth over the past two years, growing twice as fast as manufacturing. Since health care generally requires direct contact, most of these jobs cannot be outsourced.
The wellness economy
Perhaps one of the greatest signs of our lofty standards of living is the proliferation of the wellness economy. Job titles such as "wantologist" and "life coach" might sound ridiculous to some, but they're representative of a new lifestyle in the modern age. In 1940, there were just 2,500 clinical psychologists, but by 2010, the number had swollen to 77,000, with an additional 50,000 marriage and family therapists. Life coaches didn't exist a generation ago, but today there are more than 30,000 of them. Massage therapy is another growing industry, with more than 150,000 jobs in 2010, and 20% growth expected in the next decade.
Finally, the yoga industry has also boomed in the past decade, nearly doubling between 2004 and 2008, helping to propel businesses such as lululemon athletica
Of course, there are many other growth industries such as entertainment and media -- look at the number of cable channels these days -- or information technology, which will grow as mobile media becomes more central to our daily lives. But the wellness economy shows how unexpected jobs are created in a post-industrial age as consumers focus their spending on improving their lives. Those who are able to provide such services, as opposed to simply making things, are likely to benefit.
What the government can do
In 2011, President Obama asked Apple CEO Steve Jobs what the U.S. could do to build the iPhone and other Apple products here at home. Jobs' reply was quick: "Those jobs aren't coming back." Apple and so many other tech companies make their products overseas not only because workers are cheaper but also because the supporting industries, infrastructure, and labor are simply better than the equivalent option at home. According to one Apple executive, the two key differences were that factories in "Asia can scale up and down faster" and "Asian supply chains have surpassed what's in the U.S."
To ensure that the jobs of the future stay in the U.S., the government can help establish the supporting infrastructure and education necessary. While Americans may believe in free markets, our chief competitors, the Chinese, are not playing by the same rules. A U.S.-China trade war in the solar industry has been shaping up over recent months, as subsidized Chinese solar panels have come to dominate the market. In March, the commerce department said it would implement a modest tariff on the Chinese imports, which could lead to larger ones in the future. While solar is far from a huge industry at this point and is still a small employer -- First Solar
As innovations and advancements in the standard of living have relieved Americans from the jobs of the agrarian and industrial ages, a greater focus has been placed on sales and marketing. Other countries, including Denmark, have de-emphasized consumption in what's called a post-consumerist economy, working shorter hours to have more time to spend with friends and family. While the high taxes and socialist culture may seem un-American to some, according to at least one poll, Danes rank as the happiest people in the world, and the country's unemployment rate has averaged 4.5% between 1996 and 2012. Though the Danish way may not mesh with American culture, it serves as a reminder that as standards of living increase, what past generations thought of as necessary will invariably diminish thanks to machines and other forms of technology.
Foolish final thoughts
In a free-market economy, progress comes before jobs. Innovations help raise the standard of living, and job descriptions that were before unimaginable follow in due time.
Who knows where we'd be if the Luddites had won out? Still toiling in the fields like our ancestors, perhaps? The group of English textile artisans who fought against the Industrial Revolution by destroying mechanical looms might be surprised to know that that revolution was the major factor in the Western world's evolution past the agrarian economy of the 19th century. In the meantime, life expectancy has doubled, and today's standard of living would be unrecognizable to people of that era. Those same innovations are having a similar effect in developing countries now, and the information revolution in progress could usher in a whole new set of advances. This is only just beginning.