Sometimes a sector of the economy has so much technological progress that over many decades, output in the sector increases while inputs into the sector–particularly the amount of labor used–decreases. Agriculture went through this transformation first. In more recent decades, manufacturing employment has been shrinking while manufacturing output has been growing. Just as we need only a few farmers to feed everyone, we are moving toward a world where we only need a few people to manufacture things, while almost everyone is employed in the service sector.

Neil Irwin describes this transformation in his post “American manufacturing is coming back. Manufacturing jobs aren’t.”