2008-2018: Services Will Be Fastest Growing Sector

Services are the fastest growing

sector of the global economy.

          GENERALLY: Service industries provide 79% of the Gross Domestic Product of the United States, 77% in France, 74% in Britain, 73% in Japan and 70% in Germany. In each country, services are growing rapidly. By 2010, Cetron and Davies say, services will account for all of the net gain in job growth in the US.

         Production and less skilled jobs are disappearing. Stock clerks will lose 150,000 jobs, cashiers (except those involved in gaming) 120,000 and packers and file clerks will lose 100,000. Sewing machine operators, farmers, machine feeders, telemarketers, will see their jobs shrink between 2006 and 2016. Cetron and Davies say that by 2014, the US will have more chief executives than machine tool operators, more lawyers than farm workers.

…”Service jobs have replaced many of the well-paid positions lost in manufacturing, transportation, and agriculture. These new jobs, often part time, pay half the wages of manufacturing jobs. On the other hand, computer-related service jobs pay much more than the minimum – for workers with sound education and training”… (Emphasis added)

In raw numbers, the fastest job growth is in the least skilled occupations, such as cashiers and retail sales.

Cetron and Davies see good news in the trend toward services. They believe that global pressure on wages, forcing them down, will hold inflation in check. International business will act as a stabilizing force because conflict will be bad for the bottom line.

          IN KENTUCKY:  Kentucky’s average wage has hovered around 84% of the national average since 1990. Kentucky, as of 2005, ranked 45^th in per capita income. Job development continues to be a campaign theme for every candidate running for office.

          Manufacturing, once the stable element in every Kentucky community is declining. Plants across the state are closing due to aging equipment and cheaper labor abroad. Governor Beshear made a trip to Michigan in mid-April to discuss with Ford the future of the Ford plant and its 5000 jobs. At this writing, although Ford is closing plants, the Louisville plant remains open.

          Economic development in Kentucky appears hell bent to pursue smoke stack industries. Coal gasification and coal liquefaction are getting attention in Frankfort and Paducah. Industry and big manufacturing remain the gold standards, despite evidence to the contrary.

          In many Kentucky counties, industrial parks grow only weeds. The status symbol of the last century for local governments, no self respecting county judge would be without a manufacturing park to show off to visitors.

          Vast tracts of land lay ready for the developer’s hand. Sewer lines, water lines and electric service proved to be expensive to run to the middle of former corn fields. The industrial parks got shiny signs announcing which administration paid for them, but little else. Kentucky jostled with other southern states for whatever foreign auto manufacturer wanted to sell into the American market without paying the shipping charges.

          After Martha Layne Collins landed Toyota for Georgetown, the state’s lucky streak ran out as fast as it came in. No other major foreign auto manufacturers have come since. Satellite supply companies located throughout the state, but with the downturn in the economy, many like Dura in Fulton, a windshield manufacturer, went out of business.

County officials continue to dream and build infrastructure for their industrial park if and when the luck turns back to the Bluegrass. Cetron and Davies would say that their dreams will be dashed. Smart parks, tourism, high tech, educational facilities will drive the 21^st century service economy.