On Sunday, Jan 2, the New York Times ran a large article entitled “How U.S. Lost Out on iPhone Work” by Charles Duhigg and Keith Bradsher, beginning on the first page of and ending with a two page spread in the middle of the first section. The verbiage from the article is here. But the original article also included some very interesting information having to do with employment in the U.S.
There was first of all, a graph of the percentage of workers in the service sector of the U.S. economy vs. the manufacturing sector since 1960. As you probably know, the percentage in the manufacturing sector has fallen to about half of what it was and is now 14%, the service sector having risen to 86%. So as of now six out of every seven U.S. workers are in the service sector. Another graphic that took my eye was a comparison of the fifteen largest employers in the U.S. in 1960 and in 2010. In 1960 only three of them were classified as service providers. Now all but three are. The only company showing up for both these times was General Electric, but its largest unit by revenue is GE capital, which provides financial services. Apple, of course, although it ranks among the top companies in the world in capital value, does not show up on the 2010 list, because its worldwide employment is only 63,000, well below Walmart, the leader, at 2,100,000, or even CVS Pharmacy, at 280,000 the smallest of the fifteen. In fact, none of the present “hot” internet companies (Facebook, Amazon, etc.) show up on the 2010 list.
But hopefully, you are following this change, because it is an important one not only for the U.S., but other “developed” countries and ones following the same path. Another interesting set of numbers from the article compares the additional jobs created in various other areas from 1000 new jobs from each. According to these, 1000 additional jobs created in retailing result in 240 additional jobs elsewhere. For hospitals, the number is 670, for computer systems design services 1,190, for motor vehicle manufacturing 4,710, and for steel product manufacturing, 11,890. Seems to me that as far as job creation, we in the U.S. are not exactly going in the right direction.
I admit, that I have a visceral reaction, in that I personally would have found being employed in most of the companies listed for 1960 challenging and rewarding. I would not like to work in many of the ones listed for 2010. I would consider most of them great big stores and I am an engineer! But I do admit that I perhaps have an age problem, because I was having a wonderful time building spacecraft in 1960. Maybe if I was just beginning my career now, I would find great challenge working for Walmart or Bank of America.
What does this have to do with product quality? If countries like the U.S. desire to remain in manufacturing and provide jobs for all of the other people like me who do not want to work in stores, it becomes more and more important to continue to improve the quality of our products, and improve our market share.
Maybe we should be proud that Apple can make a profit of $400,000 per worker through their competence at globalization (also from the Duhigg-Bradsher NYT article). And people like me do have the freedom to move to Shenzhen and work for Lina Lin (in the article) if we like the process of designing and manufacturing products, except that our families would not be pleased to join us there.
Perhaps we are somewhat ambivalent about globalization an using the wrong quantities to measure our success. What do you think?
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