Unit 4 Macro: Why Making Stuff Creates More Jobs Than Healthcare Provision
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Last week my A2 students were asking what’s with all the fuss about manufacturing - services create jobs too! There’s a lot of talk about how the UK economy needs to focus more on its manufacturing industries as a means to get the economy out of its current predicament. We should be more competitive in what we produce, so that we can sell more overseas, boosting export revenues and creating jobs at the same time. Here’s a timely video from The New York Times, dissecting the iPhone and using it to help us understand the importance of manufacturing as a means of creating jobs.
The iPhone is assembled in the US where, since 1960 the percentage of people working in services has increased to 86% at the expense of manufacturing jobs. The video explains the “jobs multiplier”, where 1000 auto manufacturing jobs lead to a total job creation of 5712 whereas 1000 new hospital jobs create only 1700 extra jobs. There’s a lot more useful economics in this plus a great infographic looking at the shift away from manufacturing over the last 50 years in the US.
I’ll also be looking at this article (Making it in America) with my class that examines the shift towards high skilled high tech manufacturing in the US which I’ve blogged about here and here before.
“The combination of skilled labor and complex machines gives American factories a big advantage in manufacturing”
Big HT Hayward Econ
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