Answer in 300 – 350 words (references cannot be older than 5 years)
The transition from manufacturing to the services sector in the United States economy, which originated in the 1990s and has persisted, is a multifaceted phenomenon shaped by a combination of technological advancements, globalization, and evolving consumer preferences. The aforementioned transformation has had significant ramifications for wages, employment levels, and the overall structure of the labor market.
The emergence of technology and automation significantly contributes to the fall in industrial jobs. The 1990s witnessed significant advancements in information technology, robotics, and other automated systems, resulting in enhanced productivity in manufacturing. Although these technological advancements have increased productivity, they have also resulted in a decreased demand for human labor in conventional manufacturing positions (Acemoglu & Restrepo, 2018). The automation of several routine and repetitive tasks resulted in a decrease in the demand for manual labor in industrial settings.
Globalization has also had a pivotal impact on the transformation of the United States' financial sector. With the reduction of barriers to global trade, companies have increasingly turned their attention to international markets for the purposes of manufacturing and distribution. Outsourcing has emerged as a prevalent strategy for cost reduction as enterprises opt to relocate their manufacturing activities to nations characterized by reduced labor expenses (Autor, 2019). The phenomenon of globalization in supply chains has also played a role in the decrease in manufacturing employment opportunities in the United States.
Concurrently, the sector, which encompasses several businesses such as banking, healthcare, technology, and education, experienced significant expansion. The transition towards a knowledge-based economy has resulted in a heightened need for skilled professionals in industries requiring specialized expertise. The transition positively impacted individuals who possessed formal education and specialized knowledge in domains like information technology, finance, and healthcare (Acemoglu & Restrepo, 2018). Conversely, individuals with skills primarily suited for traditional manufacturing occupations encountered difficulties securing stable employment.
The effects of these alterations on remuneration have been diverse. The services sector is known for offering employment opportunities that are more skilled and remunerative. However, the decline in manufacturing jobs has disproportionately impacted individuals with lower levels of education and limited skill sets. The phenomenon described has resulted in the exacerbation of wage disparity, as highly skilled workers in the services sector experience an increase in their earnings, while others with lower skill levels employed in industries experiencing decline may encounter stagnant or declining wages.
Additionally, the globalization phenomenon's escalating resistance in the global market has put pressure on pay levels in particular industries. In order to maintain a competitive edge, companies have frequently chosen to minimize labor costs, affecting the remuneration of individuals employed in both the manufacturing and service sectors (Autor, 2019). The phenomenon of pay strain has been identified as a significant factor contributing to the problems surrounding income inequality and the decline of the middle class.
The relationship between levels of employment (unemployment rates) and salary levels is intricate. In general, when unemployment rates are low, there is a heightened level of competition for employment opportunities, resulting in an upward pressure on salaries. On the other hand, elevated levels of unemployment frequently result in a diminished ability for workers to negotiate, enabling employers to sustain or perhaps drop wage levels (Acemoglu & Restrepo, 2018).
Nevertheless, the influence of job disparities on salaries may exhibit variability across specific industries and degrees of skill. In sectors characterized by high demand and a scarcity of skilled labor, wages may continue to increase even during periods of low unemployment (Autor, 2019). On the contrary, the potential for salary growth may be limited in industries characterized by an excess labor supply or where occupations are easily substitutable.
Bible Integration
From a biblical standpoint, the transition of the U.S. economy from a focus on production to the services sector highlights the significance of upholding principles of justice, compassion, and stewardship. The warning in (James 5:4, New International Version, 2011/1978) against the exploitation of labor proves that the biblical text supports fair treatment of workers. The idea of compassion and the duty to protect the weak, as depicted in several biblical texts, calls attention to those who suffer from financial changes.
References
Acemoglu, D., & Restrepo, P. (2018). The race between man and machine: Implications of technology for growth, factor shares, and employment. American economic review, 108(6), 1488-1542. https://www.aeaweb.org/articles?id=10.1257/aer.20160696Links to an external site.
Autor, D. H. (2019, May). Work of the Past, Work of the Future. In AEA Papers and Proceedings (Vol. 109, pp. 1-32). 2014 Broadway, Suite 305, Nashville, TN 37203: American Economic Association. https://www.aeaweb.org/articles?id=10.1257/pandp.20191110Links to an external site.
New International Version Bible. (2011). Zondervan. (Original work published 1978). https://www.biblestudytools.com/niv/Links to an external site.
