Tuesday, March 29, 2011

Top 10 Dying Industries

From The Wall Street Journal: Top 10 Dying Industries

Leading the way for the top 10 dying industries is Wired Telecommunications Carriers. Not suprising. Here's the rest of the list:

Wired Telecommunications
Newspaper Publishing
Apparel Manufacturing
DVD, Game & Video Rental
Manufactured Home Dealers
Video Postproduction Services
Record Stores
Formal Wear & Costume Rental

Technological improvements and foreign competition are to blame for these dying industries, but for me I see the list and see progress. Who wants to spend time going to the video store or get your pictures developed? Wireless everything please. And cheap clothing from overseas?...yes, thank you. The only industry I think we should worry about is newspaper publishing. It remains to be seen what the long term affects of the dying industry will have on all of us.


Charlie said...

I don't believe the fear is that a several industries are being moved overseas. I think the true fear is that all industries will be moved overseas.

News distribution, mills and apparel manufacturing are the three with the highest concern. The rest are what should be considered as luxury items.There is no reason for America to lose control of its food, news or the ability to clothe her people.

If we lose control of too many industries we will become nothing more than a figurehead upon the world. We'll be helplessly indebted to the rest of the world for our survival. When that happens the real inflation is going to hit us.

Robert Grumbles said...

I disagree. One of the core foundations of Macroeconomics is that all countries benefit from specialization. If I am the owner of a business and I have to supply uniforms for my workers, why would I want to spend 5 times more many on them just because they're from the USA? If I own a restaurant and I can get rice cheaper from Asia, why would I want to pay more? The United States is headed away from manufacturing jobs and towards a service based economy. The great thing about service based economies is that they are much less recession prone. People still need nurses, doctors, lawyers, computer technicians, financial services etc. no matter how the economy is doing.

Charlie said...

I understand that we are transitioning into a service based economy. However, I only see that isolating the US even more. While there are numerous specialized services that the US can offer a much larger portion of services are being outsourced to other countries as well as our manufacturing practices.

The affect of the US transitioning to a service based economy is that there will be precipices of doctors, lawyers, engineers, scientist and other elite service based providers, then a large margin of blue collar services that are or will be replaced by immigrant workers and potentially robotic labor forces.

Those precipices of service providers are still dependent on the US institutions retaining her status of being the highest quality of educational institutions. While we still retain the high caliber in post-baccalaureate education if our compulsory education continues to suffer the turmoils they've been going through I see the number of native-born Americans in those upper thresholds diminishing.

Robert Grumbles said...

While I certainly agree with your assessment of our educational system, I have to disagree with your overall thesis.

The only reason U.S. manufacturing jobs are moving overseas is because they are not economically sound. If the loss of these jobs were really such a detriment to the economy then U.S. workers would lower their wage demand. Manufacturing jobs have been leaving since the 60s and during that time we have gone through periods of high and low employment. And as far as technology replacing manual labor jobs, technology has only been shown through history to decrease unemployment and increase economic output.

Charlie said...

Manufacturing jobs moving overseas has been a consistent detriment. US workers did not have the same ability to lower their wages since they have a much higher cost of living.

On a global scale more and more countries are gaining access to better education tools in order to equip their work forces. These workforces are now able to offer a large amount of services remotely. They offer the same low overhead that manufacturing jobs have historically provided when outsourcing to countries outside of the US.

Since US companies now have access to global market workforces capable of as much as US workers, but with lower costs more companies will move operations outside of the US. These companies will still hold their US presence, but are ebbing their way out of fiscal responsibility to our economy and tax liability to the government.

Being a country with a service based economy we will be at constant struggle on the global market to be best value of both service quality and price. While we are still ahead of the curve in most industries as far as services we can offer the gap is closing quickly. Our economy has not been garnered to keep pace of our soon to be competitors.

The other larger factor into this issue is the contrast of our economic standing versus our political standing. Of the top 10 world economies the US imports roughly $11 trillion more worth of trade goods than it exports to all these countries with two exceptions; Brazil and China. Brazil we actually export $11 trillion more than we import. From China, however, we imported $273 trillion more worth of goods in 2010. That is a large dependance on a country that we are not always on good terms with politically. I do not think that any of our ally countries have the infrastructure to make up that type of burden if there were to be major shifts in the current political stability with China.

If we are to be a service based economy we need secure a better balance of sourcing for our material goods than one country, especially one that can be such a large political adversary.