The low wage service sector relied on a pool of higher paid office workers. Think of, say, the restaurants full of low pay service workers clustered around office buildings. Despite all the costs of doing business, they can still eek out a minimal income off the revenue generated by hordes of $100K office workers that vastly outnumber them.
There might be only one restaurant worker per 10 office workers. Probably much less.
So remove the office workers and tell all of them to become busboys. Unfortunately, there being no office workers means no revenue, or at least a 90% drop. Unfortunately you went from 1 dude in the busboy labor pool and 1 busboy job, which works pretty well, to 11 dudes in the busboy labor pool and 1 job (until the revenue crunch hits and it goes to zero). Unfortunately the old busboy who can do no higher level work than being busboy is probably going to be replaced by the most aggressive unemployed MBA former office worker, and in former years the ten office workers paying taxes could afford some unemployment for an unemployed busboy, or even 10 unemployed busboys, but no longer, so its a life of crime ... or revolution, after all there are 9 equally unemployed and unhappy former office workers whom "the system" isn't working for them anymore.
The TLDR is the service sector is not an engine of wealth creation. We can sell each other refinanced mortgages or backrubs or life coaching all day in a circular fashion, but its never going to pay any bills and will grind to a halt soon enough.
There might be only one restaurant worker per 10 office workers. Probably much less.
So remove the office workers and tell all of them to become busboys. Unfortunately, there being no office workers means no revenue, or at least a 90% drop. Unfortunately you went from 1 dude in the busboy labor pool and 1 busboy job, which works pretty well, to 11 dudes in the busboy labor pool and 1 job (until the revenue crunch hits and it goes to zero). Unfortunately the old busboy who can do no higher level work than being busboy is probably going to be replaced by the most aggressive unemployed MBA former office worker, and in former years the ten office workers paying taxes could afford some unemployment for an unemployed busboy, or even 10 unemployed busboys, but no longer, so its a life of crime ... or revolution, after all there are 9 equally unemployed and unhappy former office workers whom "the system" isn't working for them anymore.
The TLDR is the service sector is not an engine of wealth creation. We can sell each other refinanced mortgages or backrubs or life coaching all day in a circular fashion, but its never going to pay any bills and will grind to a halt soon enough.