Job Growth in the Service Sector: a Low-Wage Future or an Opportunity for Prosperity?

Growth in service employment will set the pace for overall job growth in the economy and Richard Florida argues that this growth may spur a “re-engineering” of service employment into high-value-added, high-wage employment:

Service class jobs compose the biggest share of all jobs, and are projected to grow considerably in the future. We can no longer be content to see service class jobs as low-skill, low-paid work. A serious job creation strategy must see service class jobs as a key to providing better, more engaging, higher-wage employment. Americans need to remember that manufacturing jobs were not always good jobs. A century ago, they were dirty, dangerous, low-wage jobs. Business strategies to improve productivity, the labor movement, public policies that enabled workers to form unions and to bargain collectively, and the post-Depression, post WWII social compact between capital and labor made them good jobs.

That is the key task of a jobs strategy today – we have to make service class jobs good jobs. The way to do that is to begin to improve the quality of those jobs and to see service class workers as sources of innovation, continuous improvement, and productivity gains. Service class jobs are the last frontier of real inefficiency in the economy. Already, companies like The Container Store, Whole Foods, Best Buy, The Four Seasons, and Starbucks are developing new and better strategies to engage their workers, improve pay, and promote from within. These efforts are in their infancy and much more can be done to extend them.

The short version:  as the service sector grows, it becomes more expensive (health care is but one example).  Inefficiencies that could be tolerated when services were a smaller share of the economy become unsustainable.  And that is the opportunity to improve the quality of these jobs to reduce the costs of the sector and improve the working lives and livelihoods of the service workers.
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