Cost Disease of Services

Derek Thompson at The Atlantic examines the cost disease of services:

[The] National Journal [had a] special report on the rise and fall and rise of manufacturing. The spectacular graphic compares employment by sector in 1947 and 2007 and its most important lesson is a whopper. Manufacturing and agriculture employed one in three workers just after World War II. Today, those sectors employ only one in eight.

Where did all the making-stuff and growing-stuff jobs go? They went into services.

...The big story about American jobs in the post-war period is this: The manufacturing/agriculture economy shrunk from 33% to 12%, and the services economy grew from 24% to 50% [plus government, food services, energy and mining, and construction have all stayed about the same]. ...as manufacturing and agriculture got more efficient, they required fewer American workers, while the services industry (which had slower efficiency gains since it has more person-to-person work) required more employees to keep up with the rising demand for consulting, nurses, teachers, computer technicians, and so on. This isn't a sad story, or a happy story. It's just what's happening...

Closing thought: Why isn't anybody talking about the tragic decline of agriculture? [Agriculture's] share of workers has fallen by 80 percent in the last 60 years. Nobody seems to think that's much of a tragedy, but we do consider it tragic that manufacturing has lost 60 percent of its share over the same period. Are we being hyperbolic about the decline of manufacturing...? 

Update: ...Manufacturing jobs have declined as a share of the economy. But manufacturing hasn't declined as an industry. It's grown. By a lot. ...Output has sextupled.