US Employment History by Sector

 In the last half century US policies have profoundly changed the way Americans earn their daily bread.  This post quantifies a few of those changes.  The data comes from the US Bureau of Labor Statistics (BLS) Nonfarm labor payroll surveys.  Previous posts here and here summarize the difference between the  BLS "nonfarm" and BLS "total" labor reports.

 Chart 1:  Total "Nonfarm" US employment showing Government and Private sectors
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Chart 1:

• Approximately 130 million people out of a "total" working population of about 137 million (BLS Civilian Employment)  Americans are now employed in the "nonfarm" sector as defined by the BLS.  
• Of this 130 million, approximately 20 million (excluding the military) are employed by various government agencies.  
• The remaining 110 million are employed in the private sector. 

Chart 2.  Private sector by "Goods Producing" and "Service Providing"
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Chart 2.  For better or worse we are now a nation of "service providers" -- hamburger flippers, barbers, health care providers, bankers and other "non goods producing" service workers.
America's "goods producing" sector is now smaller than it was in 1960 -- four decades ago.
Out of the 110 million nonfarm payroll, about 90 million Americans are involved in providing services to each other.  The other 20 million or so are producing goods for sale to the rest of the US and to the world.
We have as many Americans governing us, as we have Americans making "things" for us.  However the percentage of Americans governing us has hardly changed since the 1970s.
Looking at the ratios (Chart 2) we see  that very few Americans actually make tangible "goods" any more.  Only about 15% of the working American population, or about 18 million people are involved in making things. 

Chart 3: Percentage of Americans Employed in Sectors Shown

A closer look at the goods producing sector tells us (Chart 4) that the goods producing sector consists of people employed in manufacturing and construction, and we know that both these sectors have been hit hard by the financial crisis of 2008.

We now have fewer Americans employed in manufacturing than we had in the mid 1940s

 Chart 4:  Goods Producing, Manufacturing and Construction Headcount
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 Chart 4.  Note that

• The goods producing sector headcount peaked in about 1980 at 25 million people and currently stands at about 18 million people and falling.
• Growth in the number of people making things appears to have stopped in the early 1980s.
• The manufacturing and construction sectors comprise nearly all the "Goods Producing" sector
• The manufacturing sector now employs roughly the same number of Americans (about 12 million) as it did in the early 1940s when the population of the US was less than half what it is in 2010.  
• The construction sector headcount has fallen by about a third since about 2007. 

In summary, the goods producing sector of the US economy appears to be mortally wounded.  Without massive stimulation and protection from foreign competition, I see nothing on the short term horizon (half a decade) which will encourage growth in the US manufacturing headcount.

Chart 5:  Headcounts in Manufacturing, Finance and Government Employment as a Percentage of Nonfarm Employment
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Chart 5 is another look at the number of Americans employed in manufacturing, finance, government, and the trends in manufacturing and finance employment:

• In 2010 the manufacturing headcount accounts for less than 10% of total nonfarm employment
• Government employees exceeded manufacturing employees in about 1990 and now account for about 18% of the labor force.
• If present trends continue (as they probably will) the number of Americans working in finance will exceed the number of Americans working in manufacturing in about 2015.  Barring any near revolutionary trend change, the banking sector will grow to, and the manufacturing sector will fall to, about 8% of the work force.
• By 2015, about 90% of all "working non institutionalized" Americans will be attempting to make a living by providing services, including government services, to each other.