Back in the early days of the Industrial Revolution, people might've been surprised that we're now lamenting a decline in manufacturing jobs. Back then, factory work was dangerous both in terms of immediate dismemberment and long-term health, and poorly paid for long hours of toil. Due in part to effective labor organizing and progressive political activism, we managed to turn it into a good life for lots of people, to the point that it sounds to us like a good example of the kind of employment we hope we can make available to ordinary folks.
There's no reason we can't do basically the same thing for service sector employment (well, no reason except that it costs various people money and they'll support right-wing politicians so they can stop it). Making manufacturing jobs good is in many ways a bigger leap than making service jobs good, as safety issues on the manufacturing side present nontrivial technical challenges that really don't have an equivalent on the service side. And while we might have to do things like updating health insurance provision to fit a more fluid economy where you don't work at the same job all your life, this is well within the capacity of a properly functioning mixed economy. There's no reason why the decline of the manufacturing base has to result in the decline of the middle class, unless people on the left just get destroyed at politics.
You're generally correct, but some service jobs do have safety hazards. Nurses and nurses' aides, for example, have high incidences of muscle-skeletal injuries, mostly from transferring weak and heavy patients. Manufacturing in general is more dangerous, but safety is a significant issue for some service jobs too.
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