Shifts in Industry

1. Shifts in Industry AP Human Geography

2. Site Situation vs. Site in Industry Situation Location of a place in relation to other places. Transportation to and from factory Inputs to factory Finished goods to market Example: Car manufacturers are located near market. • The physical characteristics of a place. • Land • Availability of cheap space • Labor • Availability of cheap workers • Capital • Availability of $$$ • Example: Factories are located in LDC’s or rural areas.

3. Labor • Most important site factor to consider at the global level. • Labor costs vary greatly across the globe • Avg. $20/hr in MDC’s + benefits • Less than $5/ hr in LDC’s, no benefits. • ½ billion engaged in industrial jobs • China ¼, India 1/5th , MDC’s combined 1/5th

4. Labor Intensive Industries • Wages and compensation = high % of overall expenses. • The more labor needed, the less the workers will be paid. • Example: Textile (fabric) industry • Produces 6% of world income but 14% of manufacturing employment. • Three step process: spinning, weaving, assembly.

5. Land • Originally located in urban areas (cities) • Close to market • Supplies of labor • Capital • Cities lack abundant land • Tall buildings…less land, more sky • Railroads • Now suburban/rural areas • Factories operate more effectively in one story buildings which take up more land, less sky • Land is cheaper since it is more abundant • Proximity to major highways/ junctions

6. GM Plant in Spring Hill, Tennessee

7. Land • Environmental factors • Climate • Cultural factors • Natural resources • Wood, ores, coal, water • Energy • Oil, gas, hydroelectric, nuclear, coal

8. Capital • Manufacturers must borrow $$$ create new factories/ expand business. • Banks likely to invest in local businesses. • Manufacturers will locate near banks willing to invest in their industries. • Ex. Auto in Detroit, Tech in Silicon Valley • Banks may not make loans to companies located in unstable countries.

9. Global Industrial Shifts What happened? Where to? • On the global level, industry is shifting from MDC’s to LDC’s. • 1970’s • ½ in Europe • 1/3 in North America • 2010 • ¼ in Europe • ¼ in North America • East Asia (China, Japan, SK) • Steel, autos, consumer goods • South Asia (India) • Textiles, business • Latin America (Mexico, Brazil) • Maquiladoras

11. New International Division of Labor • Instead of an entire product being produced in a single country, individual parts are made in different countries. • Transport may cost more, but made up for in cheaper labor cost. • May include the outsourcing of certain jobs (low skill) that can be performed at a lower cost in LDC’s. • Highly skilled jobs remain in MDC’s.

12. Industrial Shifts within the U.S. • Between 1950 and 2010, industry in the U.S. has exhibited certain patterns. • Decline in Northeast (6 million jobs lost) • NY, Penn, East Coast • Increase in South and West (2 million jobs gained) • California and Texas

13. Shift in U.S. Manufacturing

14. Right to Work Laws • Unions developed during the early 20th century (1900’s) to protect workers from harmful working conditions and abuse. • Unions were highly developed in the industrial North, but not as much in the South. • Many manufacturers moved to the South to take advantage of right to work laws, which discourage unionization, and therefore lower labor costs.

17. Deindustrialization • As a result of shifting industry, many American (and European) cities have experienced deindustrialization. • Industry moves, factories close, jobs are lost, neighborhoods fall into disrepair, poverty, crime, etc. • American Manufacturing Belt became the Rust Belt.

19. Fordist/ Post-Fordist Industry Fordist Post- Fordist • Refers to method of production popularized by Henry Ford • Assembly line • Each worker completes one specific task. • Lean production • Toyota • Assembly by team • No division of labor between manager/ worker

20. Ford Assembly Line