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October 12, 2007

Richard Florida

Sagging Middle

« Going Global | Main | Headlines of the Week »

Over at the Wall Street Journal David Wessel has an interesting p.2 story on the vanishing middle of the US job market.  Reminded me of things my late colleague Bennett Harrison and Barry Bluestone warned us of long ago. 

As Harvard economists Lawrence Katz and Claudia Goldin put it recently, "U.S. employment has been polarizing into high-wage and low-wage jobs at the expense of traditional middle-class jobs."

The story hems and haws about technology and globalization. The answer is simple and straightforward - the economic transformation to a Creative Economy.  The US is losing manufactruing jobs and growing two kinds, what Ed Leamer calls geek jobs and grunt jobs - or what we call creative  sector and service sector jobs.

Hem and haw all you want, the solution is staring us all right in the face.  The last big economic transformation, the shift from an agricultural one to an industrial one created a very similar kind of divergence - heck the called it the gilded age.  There were lots of manufacturing jobs. They just stunk. They were dirty, paid poorly and were extremely dangerous. Eventually, we built institutions that turned these bad jobs into good jobs.

Wake up already. We can do something similar now. We are generating millions upon millions of low-skilled jobs in the service economy. We need to turn them into good jobs.

It amazes me that no one can see this. Not in the US. Not anywhere else. The right says the market will fix it. The left wants to rebuild manufacturing.

Can someplace, somewhere out there pay attention to this and organize the world's first service economy summit devoted to turning service economy jobs into better paying, more fulfilling, longer-term, career-track creative jobs. 


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Michael Wells

Well, yes I agree with the general direction. But there's also hope for American manufacturing if companies can learn to do it right. Here at least, manufacturing is growing according to the Portland Business Journal.

"New federal data shows manufacturers supercharged the Portland economy the past five years and helped the city outperform its West Coast peers.

Released late last week by the U.S. Department of Commerce's Bureau of Economic Analysis, the new data tracks the gross domestic product of more than 350 of the nation's largest metropolitan areas. It shows that manufacturing was a $22.7 billion business in the Portland area in 2005, up 89.8 percent from 2001. It is now responsible for 24.9 percent of the local economy, a 9.4 percent increase since 2001."

This is high tech companies like Intel and Boeing, as well as a strong metals sector and others. According to the article, manufacturing is a higher percentage of Portland's economy than Detroit's.

Portland State's Dept of Engineering and a group called the Manufacturing 21 are joining to set up a center to study getting more people into trades because the manufacturing companies can't hire enough machinists, etc. So far as I know they're not looking at changing the creative nature of the jobs as suggested in Rise, but maybe as they get into it...

Maya Frost

Well, it seems that this shift could start with vocational training in high school and investment, both financially and intellectually, in the creative potential of service and manufacturing jobs.

We either push our kids to go all Ivy League, encourage them to go all artsy or watch them flail about in the service sector. We need to stop separating these tracks and start seeing the possibilities for a potent blast of creativity and energy in ALL of these options.

Matt Tabor (an edublogger) offers a great post on his welding training in high school prior to attending Harvard and how it relates to creativity--and Kant!

Harold Jarche

If you haven't done so already, I would suggest reading "Nine Shift" by Draves & Coates - http://www.nineshift.com/

It makes the current turmoil much easier to understand.


If you want to transform bad jobs into go ones, then you should support the ability of unions to organize. If the problem is one of economic power and means, then change the power structure.


The problem is that service jobs like maids, and pizza delivery can only pay so much because there is not the leverage of using a machine to boost productivity that leads to a higher wage like in manufacturing jobs.

How does Richard Florida propose to make a job like pizza delivery a good job that would pay $25 or more like a unionized GM worker?

Hayden Fisher

One of the more disturbing realities of this transformation is that younger people tend to occupy these service jobs which rarely provide health care coverage; thus they have no health care coverage (and pay nor premiums) since we tie health-care coverage to employment (an organizational age residual). The real problem here is not the they're uninsured because most of them need little health care; the tragedy is that these healthy young folks are not paying into the system in order to ease the health care burden imposed by insured older folks who do use benefits. One day most of them will pay into the health care system and use its benefits; however they will not have paid into the system throughout their lifetimes to pay for it.

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