Service Based Economy in the U.S.Essay Preview: Service Based Economy in the U.S.Report this essayNow that the United States has changed from an industrial based economy to a more service oriented economy, it means that our economic revenues are now primarily comprised by the prevalence of intangible assets, provided by services and technology for example, and less by tangible assets by means of physical labor in factories and other manufacturing industries. Because of this change, industrial production and output have been experiencing a major falloff as jobs in factories, farms, and mines that were once plentiful, are being eliminated, while jobs in the growing services sector, such as in technologies, telecommunications, and entertainment are experiencing a massive growth.
[quote=Ferguson]A major part of the decline in U.S. corporate revenues is attributable to an increasing number of low paid, non-union jobs in the services sector, such as telecommute jobs, transportation services, and manufacturing.
[quote=Papilla]The decline in the amount of work people do in the home has left many Americans with little flexibility when it comes to how to pay for their own education and medical care. While many college-educated families have increased their spending on personal education so that they may save for retirement, few of them do so as a result of the increased costs associated with higher education in particular. Thus, many are taking their college education into their homes as well.
The U.S. has experienced a rapid growth in the number of households that spend less on education. This, in turn, creates the need for employers to create jobs and to be more competitive with their competitors who rely on education to generate revenue. The decline in a family’s education costs American families even more, with a family receiving only $4,500 less per year in income today than in 1968.[/quote]
For those of us with a middle class background but experience in this market, the situation presents additional challenges. Since more than 60% of the nation’s workers earn less than $20,000 (minimum wage) and less than $50,000 (maximum wage), the job market for U.S. companies is ripe for layoffs, and the wage gap for most people living below the poverty line is as high as 5% across the country.[/quote]
[quote=Meadowwhite]For companies looking to build a new manufacturing base and to expand overseas, it is critical that we protect the wages of our employees as well as the benefits of our workers in the labor force in order to remain competitive on a competitive global economy. As recently as last year, the Congressional Budget Office gave an estimate of economic growth that predicted a 4% jump in U.S. manufacturing and employment growth by 2030 based on gross domestic product growth of 11.9%, more than doubling the national average of 3.6%. The cost of moving manufacturing jobs to the U.S. and expanding operations to Mexico and China as a result is an issue on which we must determine the path forward on this issue. We owe it to every American who works and works hard to support their families and to their businesses at home.
A growing percentage of the workforce is working full-time, making much more than the median income of 20% of the working poor, and making up almost as much in the labor force as it did in 1960.[/quote]
We also need to recognize the growing complexity of the economy today. In the 1960s and ’70s, Americans paid no federal income tax, and were taxed at a rate of 14%, far below today’s 21%. If economic growth continues on this trajectory, U.S. businesses will have to look for ways to shift manufacturing jobs over to Mexico and China, even as labor demand shifts away from the U.S., thereby increasing their taxable receipts
We say that we are heading toward a more global economy because of the fact that competition in todays markets is global. This means that corporations in the United States can compete in foreign markets and vice versa, therefore U.S. corporations and foreign corporations become interdependent and thrive off each other. This can have a good impact on the United States because it allows U.S. corporations to seek materials and labor outside of the U.S. in countries such as China, India, and Mexico, where workers are paid a lot less money than U.S. workers, thus allowing them to sell their products for significantly cheaper than if they were produced in the U.S.; however, the tradeoff is that many American workers in the industrial sector lose jobs due to this shift of labor to overseas. In the long run this will be beneficial for the U.S. and although some percentage of workers are losing work, new jobs in the services sector, in fields such as computer technology, telecommunications, and language skills are opening up and experiencing growth because of this change. The European Union will play a significant role in this because all of those countries are much more powerful and able as a whole than they are as individual entities. Being able to pool together their resources and rely off of one another as one nation will allow them to become very successful in the global market and possibly even succeed the U.S. as the wealthiest economy in the world.