Ask Lemmy

I don't think that anything significant happened in that particular year to produce an long-term difference, but computers were becoming a lot more common around that time.

As countries develop economically, they start out with a large primary sector, sometimes called the "agricultural sector". That deals with agriculture, mining, fishing. Extracting raw resources from the land.

As they develop, the size of the primary sector declines relative to the secondary sector, sometimes called the "manufacturing sector". It takes in raw resources, and converts them into processed goods.

As they develop still further, the size of the secondary sector declines relative to the tertiary sector, sometimes called the "service sector".. These are services -- people do work that doesn't involve processing resources.

https://en.wikipedia.org/wiki/Three-sector_model

According to the three-sector model, the main focus of an economy's activity shifts from the primary through the secondary and finally to the tertiary sector. Countries with a low per capita income are in an early state of development; the main part of their national income is achieved through production in the primary sector. Countries in a more advanced state of development, with a medium national income, generate their income mostly in the secondary sector. In highly developed countries with a high income, the tertiary sector dominates the total output of the economy.

The US underwent a good bit of that secondary-tertiary transition in vaguely the timeline that you're looking at.

The way a market allocates labor in the economy is via wages. If there is a lot of demand for labor for a given job relative to supply, wages for that job rise. This causes more workers to shift into that job. If there is little demand for labor for a given job relative to supply, wages fall. This causes workers to shift out of that job.

The US used to do a lot of low-skill assembly-line production, a lot like China does today. It used workers who were coming off farms -- just like China has. Forged a lot of the practices involved, in fact:

https://en.wikipedia.org/wiki/American_system_of_manufacturing

The American system of manufacturing was a set of manufacturing methods that evolved in the 19th century.[1] The two notable features were the extensive use of interchangeable parts and mechanization for production, which resulted in more efficient use of labor compared to hand methods. The system was also known as armory practice because it was first fully developed in armories, namely, the United States Armories at Springfield in Massachusetts and Harpers Ferry in Virginia (later West Virginia),[2] inside contractors to supply the United States Armed Forces, and various private armories. The name "American system" came not from any aspect of the system that is unique to the American national character, but simply from the fact that for a time in the 19th century it was strongly associated with the American companies who first successfully implemented it, and how their methods contrasted (at that time) with those of British and continental European companies. In the 1850s, the "American system" was contrasted to the British factory system which had evolved over the previous century. Within a few decades, manufacturing technology had evolved further, and the ideas behind the "American" system were in use worldwide. Therefore, in manufacturing today, which is global in the scope of its methods, there is no longer any such distinction.

The American system involved semi-skilled labor using machine tools and jigs to make standardized, identical, interchangeable parts, manufactured to a tolerance, which could be assembled with a minimum of time and skill, requiring little to no fitting.

Since the parts are interchangeable, it was also possible to separate manufacture from assembly and repair—an example of the division of labor. This meant that all three functions could be carried out by semi-skilled labor: manufacture in smaller factories up the supply chain, assembly on an assembly line in a main factory, and repair in small specialized shops or in the field. The result is that more things could be made, more cheaply, and with higher quality, and those things also could be distributed further, and lasted longer, because repairs were also easier and cheaper. In the case of each function, the system of interchangeable parts typically involved substituting specialized machinery to replace hand tools.

So when that transition happens, what you're gonna see is manufacturing industry going into relative decline. That's gonna mean reduced relative demand for labor, and it'll put downwards pressure on wages.

The US still manufactures a fair bit of stuff in dollar value -- more than in the past in dollar terms, though the manufacturing sector is smaller as a relative percentage of the economy. However, the manufacturing processes it uses today tend to rely a lot on computerized automation, so that you don't require a lot of low-skill labor on an assembly line, which employ comparatively-few people to manufacture a lot of stuff -- they have high productivity, produce a lot in dollar terms per person employed.