The Senseless Slander of Services; R. Shannon

By and large, however, we seem to have suffered only a temporary setback. As mea sured by the Federal Reserve Board's index of indus~rial production, manufacturing output is now well above the peak achieved in 1979 just prior to the recession of the early 1980s. Of particular importance is the fact that, over the past two years, the falling exchange value of the U.S. dollar has spurred our export indus tries. However, alarmists still complain that em ployment in manufacturing remains.well.below the 21 million workers who had Jobs In that sector in 1979. But they ignore the fact that the unemployment rate for the economy as a whole is falling, and the overall employment rate has reached unprecedented levels. Apparently, these displaced workers are finding jobs, many of them in the service industries. We thus are continuing a trend which originally shifted workers from farms to factories: output in both agriculture and manufacturing continues to rise ::2:.:56~ while employment falls, due to impressive gains in productivity.

Yet critics of laissez faire still are not con tent. Now they scoff that soon we may all be flipping hamburgers or pumping gas. But the service sector does not deserve such derision. It encompasses far more than fast-food restau rants and service stations. After all, this cate gory includes medical personnel, teachers, journalists, lawyers, and entertainers, among many others. And not only are many of these service jobs crucial to our welfare and culture; they also quite likely provide far more satisfac tion and fulfillment than one can find in the drudgery of hanging left front doors on an end less assembly line of automobiles, or in filling empty boxes with shoes. Even the derisionoften directedat jobs in fast food businesses is misguided. Writingin the Au gust 31, 1987, issue of Fortune magazine, Jef frey Campbell, an executive vice president at Pillsbury, pointed out that such jobs can be "a very large port of entry for disadvantagedyoung people into the mainstream of the American economy." And he can back up his statement with facts: "A lot of our managers started in hourly paid jobs. Two regional vice presidentsin our Burger King division rose from jobs behind the broiler without college degrees."

What's more, William Johnsto~ of the Hudson Institute has discovered, as a result of a careful statistical analysis, that the shift to ser vices can be a boon to economic stability. Be cause "employment and production in service industries are more stable than in the goods economy," he writes in the December 10, 1987, Wall Street Journal, we are less likely to suffer the pains of economic recession. People may be able to postpone buying a new car or refrigerator if times get bad, but they are not so apt to cut back on services. Thus, they are more likely to maintain demand and, as a result, em ployment. There has been great interest of late about perestroika (restructuring) in th~ Soviet .Uni?n. Quite obviously, our economy IS expenencIng its own restructuring. Would it not be ironic even tragic-if, at the same time, the gove~ ment of the Soviet Union restructures ItS economy by attempting to reduce centralized control, we foolishly were to go in the oppositePro~essor Shannon teaches in the Economics Department, .? D 'J' directIon.Clemson University.