Average Is Over: Service jobs

Working my way back through my notes on Cowen's book, I see he does have this passage acknowledging the importance of service jobs in the future:

"As workers are displaced by smart machines and manufacturing and other areas, more individuals will be employed as personal trainers, valets, private tutors, drivers, babysitters, interior designers, carpenters, and other forms of direct personal services." (p. 32)

I have worked on an assembly line, and I have worked in a few of the jobs in the list above. In general, the personal service jobs are a lot better. (Having a boss who is a real jerk can change that any quality, however.) I'm not sure why people bemoan this shift.

9 comments:

  1. I'd rather be a valet, a driver, a babysitter, etc. than a factory worker, too ... assuming that everything else is equal about the job. The stereotype (I have no particular insight into the reality) is that a unionized factory job can pay well and have good job security (as long as the factory continues to exist in the same location), which I think is much less likely to be true that a job as a valet, driver, or babysitter. You give the impression that you might have in mind a low-skilled, highly repetetive assembly line job, but to some extent there are also skilled blue collar jobs that are being made obsolete by smart machines and manufacturing (isn't that the point of it being smart? that it can replace skilled workers?). The skills needed for these jobs required training and mechanical acuity (or at least persistence) but not necessarily years of classroom study; this might explains why these workers are able to command comfortable salaries and job security. I don't know if similar types of skills are applicable the typical service sector job, but I think they are perceived as low-skill work (or rather, they use skills that are in abundant supply). So, my point is, I don't think people bemoan the loss of manufacturing jobs because manufacturing work is particularly pleasant, but because of pay and other practical considerations.

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  2. I'm having trouble visualizing this economy. If we take out money from the picture, are we all just trading babysitting for haircuts for kitchen design for lawn mowing? I presume we still want durable goods and toys that we're not manufacturing, whether they're made at domestic robotic factories we don't work at, out overseas. What are we trading for those goods?

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    1. I suppose we will trade baby sitting and haircuts to whoever controls the means of production. It of course does not follow of necessity that they will trade us more than bare subsistence in return.

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    2. "It of course does not follow of necessity that they will trade us more than bare subsistence in return."
      If they want these done well they will!

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  3. Various thoughts...

    Service industry jobs are more constrained in productivity gains than manufacturing jobs, for one. You are not going to make a maid 1000 times more effective by introducing new technology. This may happen in manufacturing.

    More importantly, service jobs do not feed economic growth in the same way that factory jobs do. Factories create all sorts of positive externalities that create new opportunities.

    Another angle, using the fragility framework of Taleb: which is more robust? If the global economy crashes, having more factories and manufacturing jobs will probably prove more resilient than having a service-oriented economy.

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  4. "I'm not sure why people bemoan this shift."

    I'm encouraged by your optimism, but when I imagine the scenario I see far more people working service jobs less satisfying and remunerative than "personal trainers, private tutors, interior designers, carpenters, etc.". As far as I know, those occupations pay substantially more than the mass of positions at $7-$9/hr.

    A world in which many more people make $10/hr or less than do at present is a pretty unsettling one, I think.

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  5. "I'm not sure why people bemoan this shift."

    I'm encouraged by your optimism, but when I imagine the scenario I see far more people working service jobs in the $7-$9/hr range than "personal trainers, valets, private tutors, drivers, babysitters, interior designers, carpenters...", who, as far as I know, make substantially more than that and meet higher competency requirements than fast food workers do.

    A world in which many more people make $10/hr or less than do now is unsettling to me.

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    1. Well, JD, I made an actual argument as to why it would be the latter type of job that we would see increase. But what is my argument compared to your imagination? If you imagine it, I guess it must be so!

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  6. Regarding the double-post above, I wrote the comment and then thought it was lost during sign-in and tried to re-write it from memory.

    I found your other posts on Cowen's book; I think the argument you refer to is that the new upper class will spend generously on services produced by high-skill manual labor (construction, design, art, music, gourmet dining, massage, tailoring, personal training etc.). I agree, but worry about scale. I haven't read Cowen's book yet, but I believe he anticipates a 15%/85% class split. People may have unlimited wants, but they do not have unlimited time to satisfy them. How much of the population can the 15% employ this way?

    When I wrote that I imagined a pessimistic scenario I meant to invite refutation, not to imply confidence.

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