Introduction
The industrial revolution provided opportunities that created jobs and increased production greatly boosting our economy. During this time, most workers in the United States were blue-collar workers doing physical work in factories. This has however changed with time as our economy has increasingly moved towards a knowledge-based economy. Most employees in the United States today are white-collar employees. These deal mostly with management and service delivery. This change is partly due to technological advancements that have made it possible to automate physical jobs in industries. Several consequences have followed from this shift about the worker, the economy, our global position, and democracy. I will discuss how these changes are affecting and how they are likely to affect Americans and the global community in general. (Wharton, 2005)
Advantages of a service-based economy
A service-based economy can present several advantages as has been seen by our economy which can now be described as a service-based economy. The tradition has always been that white-collar jobs are better paying compared to blue-collar jobs. It is estimated that about seventy percent of workers in America are white-collar workers today with the number increasing, thanks to a service-based economy. These are professional workers with degrees and diplomas. With the tradition of good salaries for white-collar workers maintained, these workers enjoy good salaries. This benefit has also overflowed to the few blue-collar workers in the country. With fewer people to do manual jobs, these jobs are very well paying nowadays-sometimes better paying than even white-collar jobs. Moreover, no professional skills are required for these jobs providing employment opportunities for the less educated in the country. This also presents an advantage to a worker who intends to do several jobs to earn a better income. Since most of these jobs are paid per hour, one can do several of them in a day providing an increased source of income. (Hodson, 2001)
Immigrant workers have seen this opportunity and are coming to the United States in great numbers from all parts of the world to take up these available blue-collar jobs in the country. Measured against jobs in other parts of the world especially third world countries, these jobs are very well paying. An opportunity has therefore been presented to people all around the world to empower themselves economically by taking up these jobs. On the other hand, our companies are now able to get the necessary workforce to continue with their business activities that are so important in maintaining and enhancing our economy. Besides, many of these immigrants bring their headwork and skills into our country and are wise enough to invest in their countries or even in the United States hence improving the global economy in general. This foundation was set by past generations of people who migrated into the United States mostly from Europe to contribute to building a powerful economy by Investing their skills and hard work in the United States. (Wharton, 2005)
A survive based economy utilizes a worker’s abilities relative to what he/she had invested in his/her career. Unlike a blue-collar manual worker for example, who performs repetitive work that can be described as boring, white-collar workers perform duties that require planning, management, and creative skills where they are required to apply all knowledge that they have built-in their careers. This can be a self-fulfilling as well as an exciting job for a person and one that offers challenges to him/her. This kind of worker is greatly valued by his/her company and is likely to enjoy a better working environment as compared to the manual blue-collar worker. (Ehrenreich, 2008)
The United States economy is service-based. Many production industries have embraced technology that allows automation of processes that would otherwise have been done manually. This has increased production and increased the quality of products produced in the United States making them more competitive in the global market. Without this kind of approach in production, it would be very difficult to make a profit since the cost of producing goods would be very high. Moreover, by concentrating on the provision of services, many opportunities have arisen which have in turn accelerated our economy to the current level. For example, companies that provide technological solutions and services like Microsoft have helped in holding the United States economy. (Wharton, 2005)
A service-based economy can be described as a very stable economy. This could be the reason why as much as the United States has been facing an economic crisis, the economy has still been stable even with the collapse of big corporations. It has grown by some points. It can therefore be seen that the condition of the economy does not just depend on the local economic condition but rather on the overall global economic environment. This makes the United States economy stable since it can overcome unfavorable conditions in one locality like at home. Many companies in the United States are outsourcing services from other countries like China. This leaves the bulk of available jobs in the U.S as service-based jobs. The United States is therefore like a manager of the production and a marketer of products in the global environment rather than a producer. When these goods are produced in places like China where there is a big market of people, there are even more benefits for our economy. Moreover, goods can be produced cheaply and our multinational companies can easily take advantage of an available workforce willing to do blue-collar jobs. What is more? With a low inflation rate and a cheaper standard of living, this workforce does not need to be paid very high salaries in dollars. (Ehrenreich, 2008)
Moreover, as a result of outsourcing services from other countries as well as foreign investment, many third-world economies are now growing at a fast rate. Chief among these countries include China and India. These economies are growing at two digits. It is even believed that at current trends, the Chinese economy is going to surpass the United States economy by 2020 even though the country may remain a third world country though with higher standards of living. This is a direct result of our companies outsourcing services from foreign countries. China is one place that can now be described as a center of production. Nearly all companies involved in production are now shifting their base to this country. The same case applies to India and other third-world countries whose economies are growing. (Wharton, 2005)
Disadvantages of service-based economy
There are however many setbacks that are coming with a service-based economy. For the job seeker, it is increasingly becoming more difficult to find jobs for the nonprofessional (without specialized training in academics) job seeker. This reality is so real in the country that our society is now described as a class society that is not based on wealth inheritance but rather on the level of education that one has acquired. Even people with University and diploma education may be forced to scramble for manual jobs as service jobs become more specialized. This is further compounded by the fact that immigrant workers continue flocking into the country. These are normally willing to do blue-collar jobs at less pay hence they are more likely to get these jobs at the expense of jobless Americans. Moreover, these immigrants are entering the United States in very large numbers-most illegally. It is estimated that about fourteen Million immigrants enter the United States each year. These may compromise U.S. security apart from presenting other problems to the government. (Ehrenreich, 2008)
A service-based economy includes foreign investment, outsourcing of services from other countries, and the use of technology to automate processes. This is leading to the integration of economies around the globe something that is directly accelerating globalization especially economic globalization. In this type of service-based economy, knowledge becomes the most important asset surpassing capital and production. However, there is a problem that is created in this kind of setting—a problem in which the gap between the rich and the poor is widened especially when we consider the gap between third world countries and developed countries. This is mainly because knowledge is unequally spread around the globe. Third-world countries will therefore be exploited as producers and consumers of the finished product by service-based economies such as that of the United States. This kind of unequal ness may increase problems of uncontrolled immigration, terrorism among others to the United States and the whole global community in general. (Wharton, 2005)
By taking jobs to other countries, the United States is quickly losing its political and economic power and ultimately its position as a superpower in the world. While the U.S economy has been struggling due to the current economic crisis, China’s economy is set to grow between 10-12 percent this year. And for the first time in history, this country’s economy is now influencing other major economies including that of the United States. This country has also been wise enough to control spending, inflation apart from investing heavily in third world countries and emerging economies. These factors coupled with a big population that is increasingly becoming more economically empowered with an increasing capacity to spend is likely to drive the country’s economy well beyond that of the United States in the coming few years. Countries like China do not share the same beliefs and ideals on democracy like the United States. For example, the requirement for democracy is not a must in third-world countries that they support. As their influence on the global scene becomes more significant, significant changes could arise globally. (Wharton, 2005)
Conclusion
While the United States may pride itself on a service-based economy that has provided better pay and better working environments for workers apart from other benefits, there are some obvious shortcomings of this type of economy. Chief among these is the decreasing power of the United States in the global scene. Although it is arguable whether this is good or bad for the U.S and the whole global community, it is not something that was on the menu of the plan when the seeds of a service economy were sown. An obvious demerit of a knowledge-based economy however is the increasing exploitation of poor nations (due to disparities in knowledge and an infrastructure to economically succeed). The U.S may just have given the power to countries like China to be in a position of continuing with this tradition of exploiting third world countries since their economies are also likely to become full-fledged service based in the future obtaining raw materials, labor and market from poor nations.
References
Ehrenreich, B. (2008).Nickel and Dimed. Ed. Holt Paperbacks.
Hodson, R. (2001). The Social Organization of Work. 3rd Ed. Wadsworth Publishing
Wharton, S.A. (2005).Working in America: Continuity, Conflict, and Change.3rd ed. McGraw-Hill Humanities/Social Sciences/Languages