There are really two issues you've raised, and they're both important but different. The first is the evolution of income distribution in this country.
For the last 20 years we have seen the distribution of earned income actually grow more unequal. Now, we are certainly not a world leader in this increasing inequality, but earned income is clearly more unequal as we sit here in 2007 than it was in 1987, or in particular than it was in 1977, at the end of the last long productivity boom.
This is a global phenomenon. Part of it is obviously due to technological change, part of it is due to the fact that markets have gone from being local to national to being global, and that tends to pull the income distribution apart.
In this recent issue of the IMF World Economic Outlook there's an interesting chapter on that, but it is quite clear--and this isn't a manufacturing/non-manufacturing issue--it doesn't matter what sector you look at, you see this pulling apart of earned incomes. This is a real issue going forward.
Historically we've gone through periods like this, and it tends to reverse itself over time, but it is certainly one that is worthy of study and reflection on the part of this committee and on the part of Parliament.
I think that actually is an issue that is quite different from the relative shares of employment we have in manufacturing services and primary industries. We had really quite a sharp increase in the share in manufacturing employment in the 1990s, when we had really rather depressed resource prices and when we had to crowd in some employment because governments were subtracting from the economy over that period. So it's actually not surprising that when those conditions reverse, we would see some decline in the share of manufacturing.
I guess what I would say is it's not the fact that there's an absolute decline in manufacturing employment; that is, in a sense, part of the normal working of the economy. What is really critical is, is that being driven because we are becoming globally less productive than others, or is that driven, as I said, simply by the evolution of prices? That is a serious question, and it is a serious issue for Parliament and for the government as to what policies ought to be in place to support reasonable levels of investment in the manufacturing sector so that we can actually increase the productivity.