2006-04-21 / Columnists

The Progressive

Service Economy
By John Paul Culotta


A decade or two ago, it was considered common knowledge that the United States was in a post-industrial age. Heavy industry was moving to foreign shores to take advantage of cheap labor costs.

It was considered to be a panacea for corporate American's problems with our middle class labor costs. The American people would benefit with better and cheaper consumer goods. Our economy would become stronger because we would lead in the fields of technological knowledge and service industries. Free trade would benefit all mankind. Countries that could excel in producing shoes for example would become the global leader in that product. Other countries, would buy the shoes by selling another product or providing a service that that country excelled in producing. Tariffs between nations should be reduced to allow nations to compete on a even playing field.

In theory, free trade would bring living standards up all over the world and promote world peace.

Conservatives and progressives all over the planet are now seeing that the theory is either wrong or seriously needs tinkering with.

The Progressive will discuss free trade vs. protectionism in future articles.

Today, I feel it is important to consider the idea of a service economy.

Can a nation uphold its standard of living without heavy industry?

Our economy still provides airlines, gas guzzling automobiles, motion pictures, and food to many other countries. Many important heavy industries are in serious decline.

General Motors is an example.

Our steel industry is mostly in the hands of foreign corporations.

The port of Los Angeles and a port on Staten Island are managed by a Chinese corporation. That is to say the Chinese government.

Many of our service industries now outsource their work to call centers in India, Ireland, Eastern Europe, and the Caribbean.

Call centers are difficult places to work. Staff retention is low. Most Americans are not willing to work under such stressful conditions for the wages that employers are willing to pay. Call centers overseas have the same problems with retention as those stateside. Indian newspapers have articles stating the grievances of call center workers in that nation.

The most labor-intensive service industry is the healthcare industry.

There is now a movement to provide first world hospitals in third world countries. These hospitals will provide cheaper healthcare costs for the insurance companies that will steer Americans to them for operations and rehabilitation services.

Baby Boomers will be having hip and knee replacements in far away exotic locales such as India, Thailand, and the Philippines.

Today, I was compelled to contemplate the idea of a service economy.

I drove to a gas station where I pumped my own gas, checked out my groceries in a supermarket, and waited an half hour on a telephone to reach a customer service representative after going through three menus.

I also was constantly reminded that my call was valuable to the corporation I was calling.

Many times I am forced to ask the call center representative to repeat their message to me because of their accent or improper use of English.

At the supermarket I could not redeem my recyclables for refund because the supermarket employee did not report to work to open up the area where the recyclable machines are located.

I went to the customer service desk to inform them of the situation along with another half dozen unhappy customers; we were told that she could not redeem the recyclables because Health Department regulations require that the items be redeemed only by machine.

I asked to speak to the manager and I was told he would not speak to a customer. I proceeded to the manager's office and spoke to him. He promptly redeemed the items. Later, I went to a jewelry store and asked if the store would be able to repair a watch that needed repair. The clerk told me that the store could not repair that type of watch. A few minutes later, I asked another clerk about my desire for the watch to be repaired and that clerk promptly gave me an estimate. It is comical when I do decide to use a clerk at the supermarket to check out my groceries to hear clerks on their cell phones speaking to their parents or spouses about personal matters as they ring up the items customers are buying.

It appears our service economy model leaves much to be desired. I surmise that without a satisfied and secure well-paid workforce, the idea of an information service economy as a solution to the post-industrial world is a farce. If you have any service stories you wish to share please send them to this newspaper.

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