Challenges America Faces in Changing to a Service-Sector Economy

ELLEN LI
News Editor

Students often complain about how they will never use what they learn in school. After all, calculating the velocity of a vertical spin hardly seems to have any real- world applications. What they do not realize, however, is that as America is sending manufacturing jobs overseas, their education becomes increasingly vital to the future or their careers.
There continues to be much debate over outsourcing. Supporters say that it is good for the U.S. economy, while opponents argue otherwise.
As manufacturing jobs are being outsourced, proponents say that this is the first step towards transforming America’s economy to encourage service-sector jobs.
There are three industrial sectors that jobs fall into: services, manufacturing and retail trade. Each sector requires a different set of skills, but the service sector overall requires the highest level of skills.
As suggested by the name, the basic characteristic of this sector is that people offer their knowledge to improve productivity, performance, potential and sustainability. In simpler terms, it is the production of services instead of end products. Examples of service sector employment include jobs in government, education, legal services and public health.
“The service sector is the delivery of services; there are so many things that make people indispensable,” American Government and Economics teacher Johnnie Lau said.
Economists have developed a theory of progression that states that a country’s economy begins with a heavy reliance on agriculture and mining. As it progresses, it then shifts toward the development of manufacturing. In the final stage of progression, the country moves towards a more service-based economy.
As an economy makes the transition from one phase to another, a radical restructuring of its labor force is typically observed, which can be very difficult for workers to transition. In order for them to adapt to the changing working conditions, they have to acquire a new set of skills.
However, this is not to say that America’s economy will necessarily become only a service-sector economy. Currently, America predominantly focuses on services rather than manufacturing. However, there are still jobs in various fields that people can enter after high school and college.
“Our economy is ever revolving,” Lau said. “We are going to need a little bit of [every sector], but service is going to be more valuable. We have to find opportunities to flourish in today’s economy.”
In order to make this transition, it is crucial for America’s future, the youth who will soon grow up to enter the workforce, to be well-educated, particularly in the fields of math and science.
“Our economy is connected to individual initiative and taking advantage of opportunities,” Lau said.