Economist/Analyst (unnamed)

So the main cause here, when you look into the data, is productivity is going up. Manufacturing is incredibly intense in equipment. You rely a lot on machinery. That machinery can get better. In a lot of plants now, it's robotics. It's literal robot arms coming and helping assembling products on the floor.

That process of improving that technology and organizing it better leads to big productivity improvements. That in turn means that you can make more goods with less labor. That makes the goods that you're producing cheaper and One thing that could happen is that it gets cheaper and then everyone buys a ton more of it because it's cheap. That's not really what happens.

That process of improving that technology and organizing it better leads to big productivity improvements. That in turn means that you can make more goods with less labor. That makes the goods that you're producing cheaper and One thing that could happen is that it gets cheaper and then everyone buys a ton more of it because it's cheap. That's not really what happens.

That process of improving that technology and organizing it better leads to big productivity improvements. That in turn means that you can make more goods with less labor. That makes the goods that you're producing cheaper and One thing that could happen is that it gets cheaper and then everyone buys a ton more of it because it's cheap. That's not really what happens.

What happens is that as people get richer, they spend less on most manufactured goods. And so the end result of this process is the share of manufacturing in the economy falls and the number of people working in it falls as well. If you go back to, say, 1950, there were a lot of manufactured goods that the average American didn't have. A lot of people didn't have cars yet.

What happens is that as people get richer, they spend less on most manufactured goods. And so the end result of this process is the share of manufacturing in the economy falls and the number of people working in it falls as well. If you go back to, say, 1950, there were a lot of manufactured goods that the average American didn't have. A lot of people didn't have cars yet.

What happens is that as people get richer, they spend less on most manufactured goods. And so the end result of this process is the share of manufacturing in the economy falls and the number of people working in it falls as well. If you go back to, say, 1950, there were a lot of manufactured goods that the average American didn't have. A lot of people didn't have cars yet.

Most people didn't have TVs, washing machines, dryers, dishwashers.

Most people didn't have TVs, washing machines, dryers, dishwashers.

Most people didn't have TVs, washing machines, dryers, dishwashers.

The U.S. has gotten rich enough, and a lot of countries have gotten rich enough, that demand for manufactured products is kind of peaking. We're nearing that saturation point.

The U.S. has gotten rich enough, and a lot of countries have gotten rich enough, that demand for manufactured products is kind of peaking. We're nearing that saturation point.

The U.S. has gotten rich enough, and a lot of countries have gotten rich enough, that demand for manufactured products is kind of peaking. We're nearing that saturation point.

And so this combination of really fast productivity growth and people substituting what they spend away from manufactured goods because they've reached some point of saturation combines to a pretty bleak picture for the state of manufacturing jobs.

And so this combination of really fast productivity growth and people substituting what they spend away from manufactured goods because they've reached some point of saturation combines to a pretty bleak picture for the state of manufacturing jobs.

And so this combination of really fast productivity growth and people substituting what they spend away from manufactured goods because they've reached some point of saturation combines to a pretty bleak picture for the state of manufacturing jobs.

So the standard model Economist uses is three sectors. So there's agriculture, there's manufacturing, and then finally there's services. And services, I find when I talk about services jobs, people think of like being a greeter at Walmart, and that is a services job. But there are a lot of different services jobs, and it's so heterogeneous that it almost feels misleading.

So the standard model Economist uses is three sectors. So there's agriculture, there's manufacturing, and then finally there's services. And services, I find when I talk about services jobs, people think of like being a greeter at Walmart, and that is a services job. But there are a lot of different services jobs, and it's so heterogeneous that it almost feels misleading.

So the standard model Economist uses is three sectors. So there's agriculture, there's manufacturing, and then finally there's services. And services, I find when I talk about services jobs, people think of like being a greeter at Walmart, and that is a services job. But there are a lot of different services jobs, and it's so heterogeneous that it almost feels misleading.

Doctors are service workers. Lawyers are service workers. The most common kind of service worker is a home health aide. That's the most common job in America right now. Anything that is not like directly making a durable finished product counts as services. And that is what most rich countries are seeing spending shift into.