The Great Divergence

[Jester]

Actually, some manufacturing is coming back onshore, but it isn't generating much in the way of jobs. As processes become more automated, it makes sense to put them close to the market and to the support personnel. Labor costs don't matter when there is no labor. Reliable, cheap power does.

Sure. Manufacturing in America is unlikely to ever return to its "sewing Reeboks" stage, and nor should it - those jobs are far better suited to other countries. You've hit exactly on why - they are not easy or profitable to automate, and so they don't make up much of the American job market.

For those industries that are automatable, there is still a demand for support personnel, managers, technicians, customer service, and so on. And every job created there is another several supporting them with haircuts and lawnmowing. And so on.

Just how many butlers, chefs, chauffeurs, maids, landscapers, can the economy support when only the intelligent and creative can find jobs?

It depends - largely on how productive the other sectors of the economy are. There are an absurdly large number of potential service tasks to do, some of which we haven't even thought of yet. The question is whether the rest of society is productive enough to justify people doing them. A maid/hairdresser/landscaper/whatever today gets paid a wage that would be laughably high by the standards of a century ago, on the backs of the rest of the economy. The higher that wage goes, the more room there is to create more jobs by using more labour.

But it's hardly that bad, that only the intelligent and creative can find any job at all. Unemployment may be 10%, but it's not 70%. And the employed are consuming more services than ever, in the big picture.

-Jester