I recently had an email exchange with Mark J. Perry — a professor of economics and finance at UM-Flint and author of the Carpe Diem blog — about Flint's economic situation. Prof. Perry writes:
What [the graph above] shows is that Flint has gradually become a service-based economy, and now has more service jobs and fewer manufacturing jobs, as a percent of total jobs, than the U.S. as a whole. So as much as we and the country think of Flint as a manufacturing-based economy, it’s no longer true, and hasn’t been true for a long time.
Consider that in 1990 about 1 in 3 jobs in Flint (Genesee County) was in manufacturing, and today it’s only 1 out of 11 jobs in manufacturing. So the Flint area is now more of a service-providing economy than the rest of the country. Which is good I think in general, because a) we aren’t so dependent on one industry and one employer (GM), and b) have a more stable, diversified economy.
Perhaps Flint is ahead of the rest of the state, or SE Michigan, in making the transition from manufacturing to service. Because the majority of the manufacturing job losses here took place in the past, Flint is well on its way to re-inventing itself as a service-based economy. Employment growth in the health care and education sectors have replaced some of the loss of manufacturing jobs.
Here's an interesting fact: Ann Arbor now has more manufacturing jobs as a percent of total jobs (6.5%) than Flint based on July data! In fact, Flint has a lower percentage of manufacturing jobs than any of the 12 metro areas in the state of Michigan.
Of course, this analysis is of the percent of total jobs in various sectors, and doesn’t directly account for the overall loss of total jobs. But the job composition issue is important.
I had this recent post on the decline in U.S. manufacturing employment; it’s now at the same level as 1941, and below 9% of totals for the first time ever.
One way to think about this decline is to compare it to the same decline in the farming sector of the U.S. economy, going from probably 50-60% of all jobs in the 1800s to 3% today. Most would agree we are better off to have “lost” all of those farming jobs. Likewise, we are probably better off losing jobs in manufacturing. After all, keep in mind that service includes accounting, legal, healthcare, education, consulting, advertising, banking, brokerage, insurance, engineering, architects, computer programming, web design, etc., most of which are highly paid professions.
Also, a decline in employment is not the same as a decline in output. We produce more food today with 3% of the population working on farms than we did 100 years ago when 50% of the workforce were working on farms. Likewise, we produce more manufacturing output today with fewer workers than we did 20-30 or 50 years ago. Reason: Increased productivity, just like for agriculture.