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Nature of the service sector

 on Monday, June 5, 2017  

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For many people, service is synonymous with servitude and brings to mind workers flipping hamburgers and waiting on tables. However, the service sector that has grown significantly over the past 50 years cannot be accurately described as composed only of low-wage or low-skill jobs in department stores and fast-food restaurants. Instead, as Figure 1.4 shows, employment in 2006 was divided among a number of high-skill service categories such as professional and business services, health care and social assistance, and educational services.

Changes in the pattern of employment will have implications on where and how people live, on educational requirements, and, consequently, on the kinds of organizations that will be important to that society. Industrialization created the need for the semiskilled worker who could be trained in a few weeks to perform the routine machine-tending tasks. The subsequent growth in the service sector has caused a shift to white-collar occupations. In the United States, the year 1956 was a turning point. For the first time in the history of industrial society, the number of white-collar workers exceeded the number of blue-collar workers, and the gap has been widening since then. The most interesting growth has been in the managerial and professional-technical fields, which are jobs that require a college education.

Today, service industries are the source of economic leadership. During the past 30 years, more than 44 million new jobs have been created in the service sector to absorb the influx of women into the workforce and to provide an alternative to the lack of job opportunities in manufacturing. The service industries now account for approximately 70 percent of the national income in the United States. Given that there is a limit to how many cars a consumer can use and how much one can eat and drink, this should not be surprising. The appetite for services, however, especially innovative ones, is insatiable. Among the services presently in demand are those that reflect an aging population, such as geriatric health care, and others that reflect a two-income family, such as day care

The growth of the service sector has produced a less cyclic national economy. During the past four recessions in the United States, employment by service industries has actually increased, while jobs in manufacturing have been lost. This suggests that consumers are willing to postpone the purchase of products but will not sacrifice essential services like education, telephone, banking, health care, and public services such as fire and police protection. Several reasons can explain the recession-resistant nature of services. First, by their   nature, services cannot be inventoried, as is the case for products. Because consumption and production occur simultaneously for services, the demand for them is more stable than that for manufactured goods. When the economy falters, many services continue to survive. Hospitals keep busy as usual, and, while commissions may drop in real estate, insurance, and security businesses, employees need not be laid off. Second, during a recession, both consumers and business firms defer capital expenditures and instead fix up and make do with existing equipment. Thus, service jobs in maintenance and repair are created.
The 21 st Century Career
As shown in Figure 1.5 , health care and social assistance and professional and business
services have the largest projected change in employment in the coming decade. These highskill
careers will exhibit the following characteristics according to Michelle L. Casto
  • More career opportunities for everyone
  • Freedom to choose from a variety of jobs, tasks, and assignments.
  • More flexibility in how and where work is performed (i.e., working from home or telecommuting).
  • More control over your own time.
  • Greater opportunity to express yourself through your work.
  • Ability to shape and reshape your life’s work in accordance with your values and interests.
  • Increased opportunity to develop other skills by working in various industries and environments.
  • Self-empowerment mindset.
  • Allows one to create situations or positions where one can fill a need in the world that is not being filled.
  • Opportunity to present oneself as an independent contractor or vendor with services to offer.
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Nature of the service sector 4.5 5 eco Monday, June 5, 2017 For many people, service is synonymous with servitude and brings to mind workers flipping hamburgers and waiting on tables. However, the se...


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