This isn’t new to America. At the turn of the 20th century, the fundamental transformation of the economy was well underway. The labor force and industries were replacing crafts and farming as the main source of new jobs. The shift was very difficult, leading to protests and political debates. Yet the US was able to come out of the turmoil a more powerful and prosperous nation, creating jobs that were more productive and usually better paying than those of the past.
Today, the US is going through a second transition, which is a postindustrial economy that has very little factory-type work. Even though industrial production has increased, since 1980, the US economy has lost 7 million manufacturing jobs. Employment in this industry has decreased by 8.5% from 27% during its peak in 1920.
Where did the jobs come from?
During most of the 19th and 20th centuries, the government at all levels played a key role in shaping the transition from farming to factories, and it could do this again. It’s not the lack of workable ideas that’s the problem, but rather the deeply entrenched opposition to any government activism.
At one time, construction jobs were being fueled by the housing bubble. However, it has burst in 2008, and there is no sign of this returning any time soon. Today’s jobs are coming from cleaning buildings, retail sales, etc. that pay less than $26,000 a year, and those in the food prep industry pay less than $20,000 a year.
A few occupations continue to pay a decent wage. For example, registered nurses earn on average $71,000. However, this is an exception, not the norm.
In the first part of the 20th century, the USA local governments put both money and resources into a striking expansion of secondary education. Between the years of 1910 and 1940, the high school graduation rate increased from 9% to 50% for 18-year-old students.
Lastly, the US government was able to create jobs directly from the increase in the investment in infrastructure during the 1930s, such as the Hoover Dam.
What are the reasons?
The reason for American politics turning against this successful model of practical policy-making is still controversial today. It might have been the growing footprint of money in politics, which gave more clout to corporate interests that lobbied smaller government and lowered taxes. Perhaps it was the mix of high inflation and recession during the 1970s, which discredited domineering government policies.
Then what’s stopping us? The loss of a vision, that used to be shared by all? Or is it a more practical reason? At any event, the government was able to do a lot. And it should do so again.