Tuesday, July 01, 2003

More evidence that the recovery is not just around the corner:
As factories kept firing workers, the Institute for Supply Management's national factory gauge edged up to 49.8 in June from 49.4 in May. That was well short short of Wall Street forecasts, which had pegged the figure at 51.0. A number above 50 signals growth while a figure below that level points to contraction.
This of course is little surprise since the US growth strategy since the early 1980s has been to eliminate manufacturing as an important source of both employment first and foremost, but secondarily as a central site of economic activity. Industrial workers can extract productivity gains from capital in the form of wages and benefits; service workers have a much more difficult time, not least of which is due to low productivity gains. Industrial workers unionize; service workers generally don't. Industrial workers act politically; service workers fade into the great mass of background noise that has become American politics.

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