Credit market specialist and overall brilliant writer David Goldman has an excellent essay at First Things.
In it he takes a long-term look at various economic boom and bust cycles — what jobs were destroyed in each recession, and which industries took their place.
In previous recoveries, virtually all net new job creation came from new businesses. Most new businesses, to be sure, are small businesses, although the ones that created the most jobs were startups that grew very quickly. The most common estimate is that new business accounts for about two-thirds of net job creation.
During the 1980s, cellular phones, cable television, and other new technologies were an important source of new job growth. During the 1990s, the tech boom funded tens of thousands of startups, and, during the 2000s, the real-estate boom. Every deadbeat could get a job in the 1980s installing cable televisions, and every starving artist became a real-estate agent during the 2000s.
For the past fifteen years, the American economy has been geared to invest inflows of foreign capital in the household balance sheet, using the proceeds to import goods from the countries who lent us the money. That came to a bad end in 2007. All the employment associated with investing foreign savings and spending the proceeds—real-estate sales, mortgage banking, retail trade, and so forth—is no longer required. With a rapidly ageing population, America will see less residential investment and more savings. America should be investing in high-value-added manufacturing and exporting. That would help America’s balance sheet, but it won’t do much for ageing, semi-skilled workers who are too old to learn a completely new trade. Nor, as noted, will manufacturing in the best of cases create many new jobs.