Building a Strong U.S. Middle Class Requires High-Productivity, High-Dignity Service Jobs

Reviving manufacturing is a cornerstone of President Donald Trump’s economic platform. A strong manufacturing sector is indeed critical to national security, innovation, and economic resilience—including its potential to create more working-class jobs. But manufacturing alone cannot restore broad-based U.S. prosperity. If the country is serious about rebuilding the middle class, it must turn equal attention to the jobs that already abound: frontline service jobs.

In this piece, I will explain why a high-productivity, high-dignity service sector is essential for the United States and will offer specific ideas for how to build and strengthen it.

The Significance of the Service Sector—Now and in the Future

There are more Americans working at Walmart than in all U.S. auto factories combined. That fact underscores a deeper truth: The future of the middle class depends much more on the jobs that already surround us—service jobs—than on manufacturing jobs.

In May 2023, 9.1 million Americans held production and nonsupervisory jobs in manufacturing. During that same month, more than 40 million worked in frontline service jobs—stocking shelves, preparing food, caring for the elderly, delivering packages, cleaning buildings, fixing what breaks, and many others. Even if the entire manufacturing sector doubled overnight, the service sector would still dominate. These are the jobs where most working-class Americans are employed—and the jobs that keep the economy running. That’s why we called them essential during the pandemic.

The future of work in the United States is also in services. The top five occupations expected to experience the most job growth from 2023 to 2033 include care workers, cooks, and fast-food workers.

Except for a few roles like call center or online customer service jobs, most service jobs are hard to automate by AI or robots. Customers vary in what they need and when they need it. Products vary in size, texture, and fragility. Humans offer far more flexibility for handling that type of variability than machines. So, even when some tasks can be automated, human performance is often superior. They can shift between customer service and other tasks; go fast or slow, depending on customer traffic or needs; and respond to different customer requests. A worker might be helping a customer one moment and then be taking out the trash, arranging produce to look appealing, or restocking shelves the next moment.

The right kind of technology can complement service workers and expand what they can do, but no robot or algorithm can easily replicate their flexibility—or their care.

Why Both Productivity and Dignity Are Needed

Despite their economic and social significance, many service jobs receive little respect. They are often dismissed as “unskilled” or viewed as stepping stones rather than careers.

Many business leaders believe they can’t afford to create better service jobs. For decades, they’ve been taught that market pay is the right pay—even when that pay does not provide a livable wage. Inconsistent schedules that can change at the last minute are treated as normal—as if workers are just numbers, not human beings. The resulting problems—lack of focus, absenteeism, high employee turnover, low productivity, and poor service—are often treated as the inevitable cost of doing business.

They are not. There is an alternative.

That alternative requires—and enables—high productivity. Most service companies operate on thin profit margins. Low-wage employees are one of their largest cost drivers. In such an environment, the only way to improve wages, benefits, and stability—without raising prices—is to raise productivity. That’s not a theory; it’s a proven model.

I first saw that model at low-cost retailers that were outliers in their industries in terms of customer loyalty and financial performance, including Costco, the world’s third largest retailer, and QuikTrip, a Tulsa-based convenience store chain with gas stations. Leaders of these companies think differently about their workers and the work they do. Instead of seeing workers as a cost to be minimized, they see them as drivers of profitability and growth. So, they invest in them in the form of significantly more pay than the market wage, strong benefits, and career paths (by promoting almost exclusively from within).

By March 2025, Costco’s average hourly wage was a little over $31—higher than the average for auto workers in 2024 and more than 7% higher the average for all production and nonsupervisory workers in U.S. manufacturing. QuikTrip store managers make well over $100,000 a year. Its retirement plan is designed to create the opportunity for long-term employees to retire by age 55 with the same income in retirement as during the working years. This convenience store chain has almost as many millionaires in its frontline ranks as it does stores.

Dignity comes not just from wages and benefits but also from respecting employees’ time and abilities and making specific choices that create highly productive and motivating work. These companies simplify and standardize operations to reduce wasted time, empower employees to make decisions, cross-train workers so they can stay productive and serve customers flexibly, and operate with slack so that employees have time to do their jobs well and participate in improvement. Combining high investment in people with productive and motivating work reduces employee turnover, strengthens service quality, improves financial performance, and builds customer loyalty.

I call this system the Good Jobs Strategy. Over the past eight years, the nonprofit Good Jobs Institute, which I cofounded, has worked with more than 30 companies seeking to implement it. We’ve seen it work at scale—in organizations as large as Sam’s Club and as small as individual franchise units of Moe’s Original BBQ.

How to Make High-Productivity Service Jobs the Norm

Ultimately, it will be up to business leaders to adopt the high-productivity, high-dignity model. Those who have done so have proven that this model is simply good business; it helps their companies win with their customers and profitably grow their businesses. But to make this model the national norm, not the exception, business schools, policymakers, and worker organizations could all play a role.

Business schools must teach leaders to think differently—and shift from viewing people as costs or numbers on a spreadsheet to seeing them as drivers of customer loyalty, profitability, and growth. They must help their students understand the financial, competitive, and ethical consequences of the low-investment, high-turnover, low-productivity model. Just as important, they must teach students how to design human-centered systems that drive both productivity and dignity. And they should give their students firsthand exposure to frontline service jobs so they can better understand how corporate decisions affect people’s daily work and dignity, develop empathy as leaders, and build lasting respect for both frontline employees and the work they do.

Policymakers must both nudge businesses toward a high-productivity and high-dignity model and rigorously reexamine existing regulations that may unintentionally stand in the way. Over time, some well-intentioned rules may have created costly inefficiencies without meaningfully advancing their goals. For example, in healthcare settings, strict licensing rules can prevent well-trained caregivers from performing basic tasks they are fully capable of handling, delaying patient care and creating unnecessary bottlenecks. Policymakers should systematically reevaluate rules and eliminate those that undermine productivity without genuinely advancing worker and customer safety, dignity, or fairness.

To encourage more businesses to adopt a high-productivity, high-dignity system, policymakers should also look for a combination of solutions. No single policy is likely to achieve this on its own, and some policies may have unintended consequences.

One policy that could encourage a high-productivity system is higher minimum wages. For example, Ed Durkee adopted the Good Jobs Strategy when he was the CEO of Goodwill Central Coast in California in response to state minimum wage increases. But a minimum wage increase could also encourage companies to cut employee hours or invest in technologies that simply substitute workers without improving their productivity or jobs. Higher minimum wages, combined with other changes—such as tax incentives for companies that raise worker pay or accounting rules that enable companies to capitalize people investments just like technology investments—could drive more companies in the right direction.

Similarly, stable scheduling laws could push companies to create more stable workloads and achieve higher productivity. (States and cities that have such laws include Oregon, San Francisco, Seattle, and New York City.) But it could also result in companies operating with more part-timers who are given too few hours or blocked from picking up last minute shifts they want. Stable scheduling laws that are designed with input from both workers and companies can help strike the right balance.

In addition to advocating for higher pay, stronger benefits, and better working conditions, worker organizations such as unions and alternative labor groups must become partners in driving productivity-enhancing practices like cross-training and worker involvement in improvement efforts.

Finally, all parties must change the narrative on service jobs. There should be national campaigns to elevate the dignity of service work and highlight the care, coordination, and judgment that these jobs require. The term unskilled labor should be retired.

The middle class won’t be rebuilt on nostalgia for manufacturing or on hope that service workers will upskill into tech. It will be built—if we are smart and serious—on the jobs that already surround us: the service jobs that feed us, care for us, clean for us, and deliver what we need.

Let’s stop belittling these jobs and start making them good ones.

Copyright 2025 Harvard Business School Publishing Corporation. Distributed by The New York Times Syndicate.

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