Do increases in social sector productivity, which seem to prevail at least in the U.S., benefit consumers at the expense of workers? Or is the scale weighted in favor of the latter who may benefit two ways, in terms of both an income stream from increased employment and lower costs? Respondents to this month's column appeared to be about equally divided on these issues.
John Inman commented, "I sometimes feel that we are racing to the bottom to provide products and services at ever lower pricing without considering the true costs. . . . We need to start to question our motives, our paradigms, and what we are willing to accept and ignore to get what we think that we need." C. J. Cullinane was concerned that "This trend (service sector relative growth) will indeed catch up with the United States in the form of fewer medical and retirement benefits as well as lower paying jobs . . . one look at the American auto industry gives us a glimpse into the future economy." As Daniel Hayes put it: "I see a shakeout coming among low-cost service providers unless they find ways to provide value to both customers and employees. There's no reason that both sides can't win, with better service and more satisfied employees."
On the other hand, E. Hassen cautioned, that "Before criticizing, we should examine carefully the social sector effects of wage deflation and higher productivity. In all ecologies things are not simple." Kamal Gupta commented, "There is no way to grow other than [to] keep on increasing productivity."
Hoshang Jhaveri sought to explain why the growth in service sector productivity has been so remarkable: "Workers in the service sector are better exposed to their customers than the ones in classic manufacturing. . . . To that extent service sector workers are persuaded, by their own concern for self-respect and appreciation, to perform optimally."
Several trends are clear. As economies develop, they generate proportionately more jobs in services than in manufacturing, farming, or other extractive industries. In the U.S., for example, fewer than 20 percent of all jobs are in non-services. Other developed economies are approaching this. This raises several questions. For example, just what is the optimal amount of service sector activity in an economy that meets consumer needs while contributing optimally to overall economic health? Has the U.S. gone too far? What obligations does this create for increasing service sector productivity? Do manufacturing-based economies have some kind of inherent advantage over service-based economies? If so, just what is it? Or does an increasing emphasis on services naturally accompany the growth of a knowledge society, representing an insurance policy for the continuance of innovation and progress necessary to maintain world economic leadership? What do you think? 