Can the US thrive as a 99% service economy?

[Train]

Service jobs don't create wealth, they merely shift wealth around.

That's not true at all. A chef is considered service, but he can take $15 worth of groceries and turn it into two $40 dishes. Wealth. Generated.

 

[Naer]

automation is killing the income for labor deal

 

[Vdubchaos]

Define "thrive" first.

To MOST, thriving = stock market increasing steady

To ME, that's FAR FAR from "thriving" and no, America is not and HAS not been thriving.

 

[monkeydelmagico]

Yes the U.S. can survive as a 99% service industry. When the machines produce and provide for all our needs all we have to do is service them. Utopia

 

[SlitheryDee]

That's not true at all. A chef is considered service, but he can take $15 worth of groceries and turn it into two $40 dishes. Wealth. Generated.

Regardless of what it's "considered", what the chef is actually doing is manufacturing the dishes. He's taking raw materials and processing them into a finished product.

 

[Train]

Regardless of what it's "considered", what the chef is actually doing is manufacturing the dishes. He's taking raw materials and processing them into a finished product.

Agreed, but I've never heard of anyone classifying restaurant jobs as anything other than service. The guy assembling burgers at McDonald's is "manufacturing" too, but no one is classifying him as that.

 

[norseamd]

And so you guys want to prop up the economy of America only on food tourism?

 

[Train]

And so you guys want to prop up the economy of America only on food tourism?

Who said anything to that effect?

 

[norseamd]

Who said anything to that effect?

How else are you going to have a sustainable economy when you have no resource or manufacturing industry?

 

[skull]

That's not true at all. A chef is considered service, but he can take $15 worth of groceries and turn it into two $40 dishes. Wealth. Generated.

If the chef is producing something? Where does the $15 for the groceries go?

A better example might be me as a contractor. Lets say I take $1000 worth of crap and make it a $2500 electric service. I built something I created $1500 worth of wealth for myself but sent $1000 to china for the manufactoring - the distributers cut etc.

Then guess what happens to a lot of that $1500 I made?

How long can we send that money away? Until no one can pay for my services because all the money is overseas.

 

[Red Squirrel]

Unfortunately, it's not that simple. Our entire economy is centered around cheap goods that are produced overseas. Real wages have stagnated since the 90s. It's only gotten worse since the recession.

If this were done, it would take several years to see any benefit. A lot of factories closed and were torn down. They'd have to be rebuilt. In the short term, the prices of basic consumer goods would spike, and push a lot of people over the edge.

I'm not sure what the solution is. North America is still teetering on the edge of another recession. Things are fine right now if you have a job. However, there's still a lot of folk unemployed, and not enough jobs to go around. With wages and job security for millennials still being fairly low, and boomers feeling the retirement pinch, they're going to hold off on big ticket purchases. That's the weak spot in the economy right now. Canada is also dealing with a housing bubble, which I think is going to burst sooner than later. Once again because millennials can't afford $500k homes, and boomers can't sell them. I just don't think we can survive on being nations of burger flippers.

Oh it would definitely take a while. I'd probably give it 5 years if more. It would have to be done in stages. Start taxing outsourcing a bit at a time and keep raising the rate every year. Lot of companies would probably wait last minute to do anything but eventually they would when they realize it would be cheaper to insource. Stuff would not really get cheaper and perhaps would even get more expensive, but there would be less unemployed people who suck up the tax dollars of those who are lucky to have a job and those people would then become consumers of products which in turn would possibly reduce the prices a bit again.

It would be more of a long term thing. Right now outsourcing is probably not THAT bad, but it will get worse if we continue at this pace. If you automate and outsource everything that can be, that leaves very little jobs that can be done here.

Then there's Harper's TFW program.... but that's another story and just shows that governments don't really care about creating jobs so my idea would never even happen because they don't actually want to.

 

[Train]

How else are you going to have a sustainable economy when you have no resource or manufacturing industry?

AGAIN.... who said 100% ?

 

[norseamd]

The fact some of you guys need me with all my glorious knowledge of economics to tell you what trade deficits are is troubling.

http://en.wikipedia.org/wiki/Balance_of_trade

 

[Train]

If the chef is producing something? Where does the $15 for the groceries go?

To the producers & distributors of the meat & produce, duh

A better example might be me as a contractor. Lets say I take $1000 worth of crap and make it a $2500 electric service. I built something I created $1500 worth of wealth for myself but sent $1000 to china for the manufactoring - the distributers cut etc.

Then guess what happens to a lot of that $1500 I made?

Regardless, you created wealth, it is a value-added wealth, but most wealth doesn't start out of thin air.

How long can we send that money away? Until no one can pay for my services because all the money is overseas.

Don't get me wrong, we can't have a trade deficit with China forever. But that doesn't take away from my original point, that service industry can and does generate wealth.

 

[norseamd]

You could possibly have America generate surplus revenue by offering services to other countries. Business consulting, mercenary work, high skilled international employees, etc.

 

[Train]

If automation really does take over in agriculture and manufacturing, that also does away with the need for sending money to China. Most of our food is already grown in the USA anyways. And if a factory only needs minimal staff, it is now cost prohibitive to ship it across the Pacific. This would free up most of the population to do other things.

If you look at human history, art and music only came about after humans gained the ability to feed and shelter themselves with less than 100% of their effort. The USA was 99% agriculture pre-industrial revolution, today we are at ~1%. Mfg is just going to go in the same direction.

 

[Mai72]

We need world war 3!

Help boost the economy and get rid of the dead weight .

 

[norseamd]

From Wikipedia.

When an economy is unable to export enough physical goods to pay for its physical imports, it may be able to find funds elsewhere: Service exports, for example, are more than sufficient to pay for Hong Kong's domestic goods import. In poor countries, foreign aid may compensate, while in developed economies a capital account surplus caused by sales of assets often offsets a current-account deficit. There are some economies where transfers from nationals working abroad contribute significantly to paying for imports. The Philippines, Bangladesh and Mexico are examples of transfer-rich economies.

 

[Imp]

Canada is also dealing with a housing bubble, which I think is going to burst sooner than later. Once again because millennials can't afford $500k homes, and boomers can't sell them. I just don't think we can survive on being nations of burger flippers.

Don't you worry, man. Everyone keeps telling me that the Chinese will buy all the houses.

You could possibly have America generate surplus revenue by offering services to other countries. Business consulting, mercenary work, high skilled international employees, etc.

Solid plan B there. Come on PMCs... Someone will be Solid Snake then.

 

[Hugo Drax]

We would go back to 1950s pricing. If everyone makes McJob wages. Then cars will go back to selling for 4800 dollars, homes for 40000 dollars. A gallon of gas for 10 cents.

😀

 

[Captante]

Flakes.

https://www.youtube.com/watch?v=RFvtoJrK1Zg

 

[TheSlamma]

Give me Tesla's direct car sales model, Amazon Prime shipping, Peapod grocery delivery service, etc. so I don't have to deal with people IRL :biggrin:

I'm referring to services provided. My job has basically converted to vendor babysitting, pay companies to support your printers and copiers and they can't even do basic tasks you were trying to free your IT staff from for bigger issues.

That is just one example, if you have any work done on your house, take those days off and babysit the workers I PROMISE you they need it.

 

[AyashiKaibutsu]

We would go back to 1950s pricing. If everyone makes McJob wages. Then cars will go back to selling for 4800 dollars, homes for 40000 dollars. A gallon of gas for 10 cents.

��

That's pretty unrealistic. The prices of things aren't entirely in the control of businesses. People aren't going to sell below the cost to produce. That and the aggregation of wealth produces a great deal of power; people aren't just going to give that up by allowing all prices to crash; they'll use their power to maintain their position... kind of like they do now.

 

[dmcowen674]

Can the US thrive as a 99% service economy?

No, it will cease being a sovereign Country before then.

Would be rolled into Mexico, Canada and be called the American Union.

<-------------- P&N is that way

 

[MongGrel]

and just like machinery and robots, we would be buying the printers from offshore.

To answer the OP, no. We already fucked ourselves with what we have already done. We will be moving the fucking to the backside shortly, if we aren't already there. 99% service (many McService) jobs would be doing it dry.

+1