The smile curveis an idea came from puter industry, but it applies broadly. It’s a recognition, in graph form, that there is good money to be made (or more value to be added) in research and development, and, at the other end, in marketing and retailing.

It’s also a recognition that there is almost no profit to be made, except in high volumes, in the middle areas of manufacturing (assembly or shipping). This has hurt the American middle class because we used to be a manufacturing nation. Yet today, even where manufacturing is strong, it does not usually pay well.

It’s one reason so much factory work has gone overseas (especially textiles and assembly). In the early stages of a product, there is good money in the middle, but when it mon to make a car or puter or a vacuum cleaner, then the value of manufacturing goes down, as we all know.

For example, Vera Bradley, maker of colorful quilted handbags and luggage, recently announced that it would close its plant in New Haven, Ind., putting about 250 employees out of work lastMay. pany has global sales of $509 million and has plans to grow to one billion in sales by 2019. Yet workers in assembly and manufacturing are the low point on the value curve, which means that if you can get it done cheaper, you will. Assembly can be cheap.

Vera Bradleyclaims that its U.S. assembly operation costs 90% more than factories in China and other nations (Fort Wayne Business Weekly). Those in the middle of the smile curve are paid poorly because they are so easily replaced.Imagine if a lawn service wants to cut your lawn for $40, but there is another service that will do it for $35. Then the neighbor es to your door and offers to mow it for $20. And the next week, four more neighbor e to your door offering to cut it for $20.

Who do you pick? For Vera Bradley and other panies, all those “neighbor kids” live overseas.

Ithas 2,700 specialty retailers that carry its brand, plus they opened 27 new stores of their own. Are there any Vera Bradley jobs left in America? Not any assembly jobs, but there are still about 600 workers in FortWayne that run pany. Theyhad profit of $38.4 million last year, and shifting the assembly overseas will save pany about $12 million annually. There was controversy in 2008 when Vera Bradleydecided to end its relationship with area job shops that employed about 540 people. The tax abatement that they weregranted was based on the idea that they would employ 500 in FortWayne. Vera Bradley cut 100 in late 2014 and is eliminating the reaming 247.

All of this is simply to remind us that as we move ever closer toaknowledge economy, we will see middle-class jobs will move to both ends of the curve. As we seek toalignour future efforts and creativity with the needs of those around us and theeconomy at large, it raises aseries of questions that we ought to be prepared to answer.

Needless to say, ifyourgranddaughter is designing purses for Vera Bradley, it’sprobably still a very good job. Ifshe’s making their handbags and luggage, however, she’s probably on her way out.