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Productivity, not trade, explains shift from manufacturing to services

It's not true that trade imbalance leads to a loss of manufacturing jobs. It is higher labour productivity in manufacturing that causes fewer people to be needed in such jobs

A US manufacturing has undergone a significant transformation in recent years. At the beginning of the 20th century, around half of urban Americans worked in manufacturing, producing various goods such as clothes, cars and iron.

For urban workers, the service sector is a critical source of jobs. The service sector includes many diverse jobs, such as hairdressing, cooking and healthcare.

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A version of this article appeared in the print edition of The Straits Times on December 21, 2018, with the headline 'Productivity, not trade, explains shift from manufacturing to services'. Print Edition | Subscribe