THREAD about America’s massive “professional and business services” sector and why it’s such a huge part of our middle class — with potential to trade and grow more: 1/10

LOTS OF JOBS: The broad category of professional and business services employs 20.6 million Americans; in fact, the sector employs 66% more Americans than manufacturing. /2 https://www.bls.gov/iag/tgs/iag60.htm

GOOD PAY: Not only are there lots of these jobs, they pay really well. Wages in these fields are 20% higher on average than those in manufacturing (average hourly earnings of $35 versus $29). /3 https://www.bls.gov/iag/tgs/iag31-33.htm

INCREASINGLY TRADABLE: Professional and business services are increasingly tradable thanks to digital technologies. According to the USITC, 63% of all US services exports now have the potential to be delivered to customers abroad digitally. /4 https://apps.bea.gov/scb/2019/10-october/pdf/1019-international-services-tables.pdf

FASTER GROWTH: Because services are increasingly tradable, global trade in services is expanding 60% more rapidly than trade in goods. /5 https://www.mckinsey.com/~/media/mckinsey/featured%20insights/innovation/globalization%20in%20transition%20the%20future%20of%20trade%20and%20value%20chains/mgi-globalization%20in%20transition-the-future-of-trade-and-value-chains-full-report.pdf

MANY FIELDS: Professional and business services includes services in such fields as audiovisual, software and ICT services, architecture, accounting, engineering and project management, banking, insurance, and advertising. /6

AN AMERICAN STRENGTH: The US is the world’s largest exporter of services. US services exports reached $875 billion in 2019 (before a big slide in 2020). /7

UNTAPPED POTENTIAL: Despite these big numbers, the trade potential for service industries is almost untapped. 1 in 4 US manufacturers exports, but just one in every 20 providers of business services does so. Just 3% of US services output is exported, according to @PIIE /8

BUT TROUBLE AHEAD? Rising digital protectionism could sap potential growth. As governments worldwide seek to put their own imprint on digital trade rules, some may close markets and disadvantage US firms. The US should push for digital trade rules like those in USMCA. /9

IN SUM: US trade policy should of course continue to focus on manufacturing and agriculture, but tradable services deserve equal billing. US trade negotiators can secure big wins for the middle class by extending digital trade rules for services globally. /END