Fantastic article from businesses on the evolution of our economy. Here’s a good bit:
But the structure of the U.S. economy has changed dramatically. In 1959, when the Standard & Poor’s 500 began, 7.2% of U.S. workers were still employed in the agricultural sector, and 28.7% of nonfarm employees were in manufacturing. In 2005, those percentages had dropped to 1.4% and 10.7%, respectively. Education and health care has risen to 13.0% of employment, from 5.3%, while professional and business services have jumped to 12.9%, from 6.7%.
The difference can also be seen by looking at the largest companies in the U.S. In 1959, the list was dominated by big manufacturers. Today, the service sector dominates. The table shows the largest 10 companies (excluding those in oil) by market capitalization in 1959 and 2005. Only one outfit remains on the list from 1959: General Electric (GE ). In 1959, there were no financial firms in the top 10; today, there are three. Five of the top firms did not even exist in 1959, at least in a similar form.
There’s a treasure trove of information in those paragraphs. Suffice it to say that our economy heavily tilts toward information and service — not manufacturing. That’s why I can’t get up in arms about trade deficits, Chinese imports, and free trade agreements.
Check out the Top 10 list of largest companies at the bottom. Pretty fascinating. General Electric is a constant, of course. But General Motors, Dupont, Union Carbide and two steel companies are gone. Microsoft, Bank of America and Wal-Mart took their place. Imagine that.