Is fast food work manufacturing? - Only in America!

Bill White · 2004-02-20 12:36:42

From the NY Times, [http://www.nytimes.com/2004/02/20/business/20jobs.html]link here:

In the New Economics: Fast-Food Factories?
By DAVID CAY JOHNSTON
Published: February 20, 2004
Is cooking a hamburger patty and inserting the meat, lettuce and ketchup inside a bun a manufacturing job, like assembling automobiles?
That question is posed in the new Economic Report of the President, a thick annual compendium of observations and statistics on the health of the United States economy. The latest edition, sent to Congress last week, questions whether fast-food restaurants should continue to be counted as part of the service sector or should be reclassified as manufacturers. No answers were offered.
In a speech to Washington economists Tuesday, N. Gregory Mankiw, chairman of the president's Council of Economic Advisers, said that properly classifying such workers was "an important consideration" in setting economic policy.
Counting jobs at McDonald's, Burger King and other fast-food enterprises alongside those at industrial companies like General Motors and Eastman Kodak might seem like a stretch, akin to classifying ketchup in school lunches as a vegetable, as was briefly the case in a 1981 federal regulatory proposal.
But the presidential report points out that the current system for classifying jobs "is not straightforward." The White House drew a box around the section so it would stand out among the 417 pages of statistics.
"When a fast-food restaurant sells a hamburger, for example, is it providing a 'service' or is it combining inputs to 'manufacture' a product?" the report asks.
"Sometimes, seemingly subtle differences can determine whether an industry is classified as manufacturing. For example, mixing water and concentrate to produce soft drinks is classified as manufacturing. However, if that activity is performed at a snack bar, it is considered a service."
The report notes that the Census Bureau's North American Industry Classification System defines manufacturing as covering enterprises "engaged in the mechanical, physical or chemical transformation of materials, substances or components into new products."
Classifications matter, the report says, because among other things, they can affect which businesses receive tax relief. "Suppose it was decided to offer tax relief to manufacturing firms," the report said. "Because the manufacturing category is not well defined, firms would have an incentive to characterize themselves as in manufacturing. Administering the tax relief could be difficult, and the tax relief may not extend to the firms for which it was enacted."
David Huether, chief economist for the National Association of Manufacturers, said he had heard that some economists wanted to count hamburger flipping as manufacturing, which he noted would produce statistics showing more jobs in what has been a declining sector of the economy.
"The question is: If you heat the hamburger up are you chemically transforming it?" Mr. Huether said.
His answer? No.

Has America suffered a decline in manufacturing jobs? Nah, its just a myth drawn from biased economic statistics.

clark · 2004-02-20 13:30:42

It's not what you say, but how you say it. It's not what you count, it's how you count it.

Is super-sizing your meal considered a luxury too? Watch out for those new taxes! :laugh:

Rxke · 2004-02-20 14:58:43

Hmmm... Tricky stuff...

Dunno how it is in America, but in Europe, working in service industry or production has results in your wages, taxes etc... both 'branches' have slightly different laws, rights, rules etc... Not only for the bosses, but for the people working there, too.

Also, if they'd classify MacDonalds et all as a 'factory' wouldn't they be able to evade certain regulations that are normal in the service/food industry (just wildly guessing here, but it sounds like this could have serious consequences..)

Anyhow, the Democrats will have a field day when they read this...

Rxke · 2004-02-20 15:03:02

Heh... By the way, it's been a long day: I clicked this thread because i thought it read 'is fast food worth manufacturing?'

Is it? (What am I saying...)

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#1 2004-02-20 12:36:42

Re: Is fast food work manufacturing? - Only in America!

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Re: Is fast food work manufacturing? - Only in America!

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Re: Is fast food work manufacturing? - Only in America!

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