The Evolution Of Employment In America Since 1850

While deindustrialization is still taking place in many parts of the US, it’s worth looking at a historical perspective.

A new Dallas Fed study points out the long term evolution of the structure of the US economy. This chart shows the share of employment in the US in agriculture, industry, and the service sector going back to 1850:

Back in the nineteenth century, the US economy was mostly built on agriculture. Over the next century, agricultural jobs went into decline as more efficient farming technologies meant that far fewer people were needed to grow ever more food. Meanwhile, the share of industrial jobs would more than double, and then begin to decline in the 1960s. The service sector’s share of employment consistently grew, and by the start of the 21st century, about four in five jobs in America are service jobs.

The authors pointed out how this is a pretty standard development cycle. As economies grow, industry takes up an increasing share of employment for a while, but then starts to take a back seat as the economy matures and the service sector takes over:

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