Why Are Location Factors Changing? Chapter 11.4

Attraction of New Industrial Regions Companies are moving to locations

where labor wage rates are lower

Changing Industrial Distribution Within MDCs From NE to the south and west of USA Europe government policies are

encouraging relocation to economically distressed peripheral areas

Interregional Shift in the USA Interregional meaning… Post Civil War factory locations= North

South lacked infrastructure Weak road and railway networks, lack of

electricity 1930s= attempt by the gov’t to put

policies in place to help the south Right-to-work laws Textile production

“Right-to-work” Law in Southern states that requires a factory

to have an “open shop” rather than a “closed shop” Closed shop= a company and union agree that

everyone must join the union to work for the company

Open shop= you do not have to join the union to work for the factory

Makes it difficult to organize unions and easy to keep unions out. Who would like this?

“Right-to-work” Shows support for antiunion attitudes Number of union members is much

lower in the South Industries move to the south looking for

people who will work for less than in the north

Textile Production Opening in lower wage locations and

closing in higher wage locations Northeast: NYC Garment District

Southeast: small towns of Appalachian, Piedmont, and Ozark Mtns and western NC and SC and northern Georgia and Alabama

Little interest in joining unions in the south Interstate highway system: access to

markets

Interregional Shifts in Europe EU provides assistance to two regions:

Convergence Regions: Eastern and Southern Europe b/c this area lags behind in income

Competitive and Employment Regions: Western Europe’s core industrial area b/c they’ve experienced job loss

Central Europe: east of Germany and west of Russia Attractive labor and market proximity

Less skilled and cheaper than west More skilled and more expensive than east Close to wealthy Western European markets

International Shifts in Industry

East Asia South Asia Latin America

International Shifts in Industry Changing distributions:

New industrial regions manufacturing steel and clothing 1980 MDC produced 80% of the worlds

steel, LDCs 20% 1980-2008 MDC= 40% and LDC= 60%

Apparel sold in the USA switched from domestic-made to foreign-made Why? It’s cheaper and easy to import

Outsourcing Companies figure out what jobs can be

outsourced to low-skilled LDC workers, while keeping high-skilled jobs for MDC workers: new international division of labor

Outsourcing: turning over much of the responsibility for production to independent suppliers This takes away a companies ability to control the

entire process known as vertical integration Every step in the production process is

examined closely to figure out the best location iPhones: “Assembled in the USA”

Renewed Attraction of Traditional Industrial Regions Proximity to skilled workers

Fordist vs. Post-Fordist Mass production Lean production

Post-Fordist: Teams Problem Solving Leveling

Rapid delivery to market Just in time delivery

Problems= disruptions= Labor unrest and “Acts of God”