Arianna Huffington wrote an article at Huffington Post yesterday about the loss of our manufacturing base, the coinciding shrinking of the middle-class, and how the financial sector has become an increasingly disproportionate part of our economy. In her words, “the share of our economy devoted to making things of value is shrinking, while the share devoted to valuing made up things (credit swap derivatives, anyone?) is expanding.”
A few points from the article to consider:
“Since the recession began in late 2007, we’ve lost 8.4 million jobs. Over 2 million of those were manufacturing jobs, the kind of jobs that have traditionally delivered American families into the middle class — and kept them there. We lost 1.2 million manufacturing jobs in 2009 alone.
…In 1950, manufacturing accounted for more than 30 percent of non-farm employment. As of last year, it’s down to 10 percent. Indeed, one-third of all our manufacturing jobs have disappeared since 2000.
…between 1973 and 1985, the financial industry’s share of domestic corporate profits topped out at 16 percent. In the 1990s it spanned between 21 percent and 30 percent. Just before the financial crisis hit, it stood at 41 percent.
…One out of every six blue-collar workers has lost his or her job in the latest recession — a number commensurate to what happened during the Great Depression.
…it’s not just manufacturing and lower skilled service jobs that are disappearing. According to the Hackett Group, companies with revenues of $5 billion and over are expected to take an estimated 350,000 jobs offshore in the next two years alone — nearly half in IT, and the rest in finance, procurement and human resources.
…Accenture now employs more people in India than in America. And IBM is headed in the same direction.
And the horizon looks even darker. A Harvard Business School study found that up to 42 percent of U.S. jobs — more than 50 million of them — are vulnerable to being sent offshore.”
The conclusion is this:
“It’s not too late to change course. The financialization of our economy didn’t just happen. Decisions were made that made it possible — and decisions can be unmade. But first we need to decide, as a country, what kind of economy we want to have: one that’s good for middle class families or one that’s built to enrich Wall Street.
It’s time to start separating the real economy from the casino economy.”