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Economic Geography. Spatial organization and distribution of economic activity Outcome of financial decisions (government, business, consumers) Highly uneven at all scales Technology and access to resources shifts economic advantages. Uneven Distribution (GDP Per Capita).

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Economic geography
Economic Geography

Spatial organization and distribution of economic activity

  • Outcome of financial decisions (government, business, consumers)

  • Highly uneven at all scales

  • Technology and access to resources shifts economic advantages


Uneven distribution gdp per capita
Uneven Distribution(GDP Per Capita)


Tripolar economy
Tripolar Economy

  • Dominated by core countries in three global regions:

    U.S., Europe, Asia

  • Disproportionate share of global, cultural, and financial influence

  • “Where the world’s business is done”

  • Coming to an end?


Industrial growth of europe asia
Industrial growth of Europe, Asia

  • European Union

    • Expanding to east: Will it include western Russia someday?

    • 2013: Croatia

  • China, India, Japan, other East Asian states

    • Four Tigers: Taiwan, South Korea, Singapore, Hong Kong

      • Thailand becoming “fifth tiger”

    • Will China be the new economic force?

  • Relative decline of U.S. in “Tripolar Economy”


Economic Activities

  • Primary

  • Secondary

  • Tertiary

  • Quaternary


Primary activities
Primary Activities

  • Mining

  • Basic “Land Based” Economies

    (extracting raw materials)

  • More common in periphery

  • Used to be more prevalent in core

  • Agriculture

  • Fishing

  • Timbering



Industrial Revolution: How and where it began

~1855

Geography of the Coal Industry


Primary activities often lead to“Resource Dependency”(“Banana Republic,” “Oil state,” etc.)


Resource dependency
Resource Dependency

  • Heavy reliance on one specific resource

    • Food

    • Precious Metal or Stone

    • Oil / Petroleum-related

  • Downturn in market / blight = BIG financial / social problems



Cartel(Strategy used to treat resource dependency)

OPEC


Secondary activities
Secondary Activities:

Processing and manufacturing materials

  • Periphery, Semi-Periphery

  • Slowly leaving core (not completely gone… YET!)

  • Manufacturing / Production of Goods



Major manufacturing regions
Major Manufacturing Regions

Notice relative location to coal belts!


Agglomeration clustering centralizing of an industry
Agglomeration (clustering / centralizing of an industry)

  • Availability of ancillary (service) industries

  • Access to infrastructure / labor

  • “Economies of Scale” advantage

Auto Parts


Agglomeration diseconomies
Agglomeration Diseconomies

  • Traffic, pollution, full waste dumps

  • High rent, taxes, costs for concentration of industry

  • May endure same effect as “Resource Dependency”

  • Turmoil and unemployment when market is down

  • Detroit, Flint, Orlando?


Gm posts 38 7b loss for 2007 offers buyouts to 74 000 hourly workers
GM posts $38.7B loss for 2007, offers buyouts to 74,000 hourly workers

http://www.latimes.com/business/la-fi-gm13feb13,0,7042004.story

February 12, 2008

DETROIT (AP) - General Motors Corp. reported a $38.7 billion loss for 2007 today, the largest annual loss ever for an automotive company, and said it is making a new round of buyout offers to U.S. hourly workers in hopes of replacing some of them with lower-paid help.

But GM Chairman and Chief Executive Rick Wagoner said that the company made significant progress in 2007, reducing structural costs in North America, negotiating a historic labor agreement and growing aggressively in Latin America and Asia.

The Detroit-based automaker said it was offering a new round of buyouts to all 74,000 of its U.S. hourly workers who are represented by the United Auto Workers.

Ford Motor Co. and Chrysler already have announced similar buyout offers.

GM barely retained its title as the world's largest automaker in 2007, selling just 3,000 more vehicles than Toyota Motor Corp. GM sold a total of 9,369,524 vehicles worldwide, up 3 percent from the year before. http://abcnews.go.com/blogs/business/2012/02/gm-posts-record-7-6-billion-profit/


Deindustrialization in the core
Deindustrialization in the Core hourly workers

  • Relative decline in industrial employment

    • Automation and “runaway shops”

  • Reinvestment in higher profit areas

    • Sunbelt states (non-union)

    • Semi-Periphery and Periphery


Economic Structure hourly workersUS Employment by Labor Sector


Collapse of Industrial hourly workers(Rust) Belt

Factory jobs replaced in

Pittsburgh, Cleveland, Boston, others by high-tech and financial industries


Some cities have adjusted hourly workers… others have not.

Cleveland, Ohio

Detroit, Michigan


Pittsburgh pa
Pittsburgh, PA hourly workers

NOW.

then…


Where did they go
Where did they go? hourly workers


Export processing zones epzs
Export Processing Zones (EPZs) hourly workers

Lower wages, taxes

+ Weaker labor, safety and environmental regulations

+ Ability to pit workers against each other, or to repress unions

= “Race to the Bottom”


SEZ’s hourly workers

(Special Economic

Zones)

1. Shanghai

2. Shenzhen

and more!

Established by Chinese government for trade $$$


EPZs, hourly workersSEZs, FTZs

“Free Trade Zones”

  • More than 3,000 FTZ’s / EPZ’s worldwide

  • Mostly in Periphery, Semi-Periphery

  • Manufacturing and / or Warehousing ports

  • Frequently controversial: above local laws

Jebel Ali (Dubai) Free Zone

Kingston (Jamaica) Free Zone


Maquiladoras mexican assembly plants in sezs along border
Maquiladoras hourly workersMexican assembly plants in SEZs along border


Northern Mariana Islands hourly workers

(U.S. Territory)


Tertiary activities
Tertiary Activities hourly workers

U.S. stock exchange

  • Not location specific

  • Ubiquitous

  • Periphery and S-P gaining in tertiary activities for reasons similar to primary and secondary activities

    • Fewer restrictions

    • Financial / Tax advantages

    • More income?

Sales, exchange, trading goods and services

Call Center: India


The changing times of india
The Changing Times of India hourly workers

August 1, 2004

(CBS) - For decades, American manufacturers of everything from blue jeans to semiconductors have searched the world for the cheapest labor they could find. It may have cost hundreds of thousands of American jobs, but it's made American products more affordable. Now, some of the most familiar companies -ones we deal with every day - are moving a whole new class of jobs overseas. They call it outsourcing.

As Correspondent Morley Safer first reported last January, that person at the other end of the line is more likely to be in India than in Indiana. To many American employers, India is Nirvana. It has a stable democracy, an enormous English-speaking population, and a solid education system that each year churns out more than a million college graduates -- all happy to work for a fraction of the salary of their American counterparts.

India epitomizes the new global economy -- a country that often looks on the edge of collapse, a background of grinding poverty, visually a mess. And yet, whether you know it or not, when you call Delta Airlines, American Express, Sprint, Citibank, IBM or Hewlett Packard's technical support number, chances are you'll be talking to an Indian…who take on phone names such as Sean, Nancy, Ricardo and Celine so they can sound like the girl or boy next door. "The real name is Tashar. And name I use is Terrance," says one representative. "My real name is Sangita. And my pseudonym is Julia," says another representative. "Julia Roberts happened to be my favorite actress, so I just picked out Julia." American movies are part of an agent's training in how to sound all-American.


Quaternary activities
Quaternary Activities hourly workers

  • Predominantly occurs in core

  • Access to resources in core that are not available in the periphery:

  • • Technology

    • • Education

    • • SkilledLabor

  • Advantages of agglomeration and economic inertia

Processing knowledge and information



Economic globalization
Economic Globalization hourly workers

From above (elites)

From below

Country 1

Country 2


Globalization from above
Globalization from “Above” hourly workers

  • Governments and elites in every country

  • Multinational Corporations

  • International Agencies

    • UN, USAID, others

  • Global trade / finance institutions

    • World Bank, IMF, WTO

  • “Golden Rule”Economics


Globalization from below
Globalization from “Below” hourly workers

  • Non-Governmental Organizations (NGOs) and various Int’l Agencies

    • - “Fair Trade” organizations

    • - Greenpeace

    • Amnesty International

    • Grameen Bank

    • Heifer Project

    • Farmer-to-Farmer

  • “Grassroots” organizations

  • Alliances of (specific) communities with a common concern, often via Internet.

  • “Think Globally, Act Locally.”

  • Wall Street Protests, 2012


Trade Alliances hourly workers(Free Trade Agreements)

  • North American Free Trade Agreement

    NAFTA = US + Canada + Mexico, 1994

  • Central American Free Trade Agreement

    DR-CAFTA = US + some Middle American Countries, 2006

  • ALBA

What’s ALBA?


  • Venezuela, Cuba hourly workers

  • Bolivia

  • Nicaragua

  • Dominica

  • Antigua / Barbuda

  • St. Vincent & the Grenadines

  • Ecuador

  • St. Lucia

  • Joining Soon:

  • Suriname, Haiti, Others?

  • Observers:

  • Iran, Syria

ALBA

Bolivarian Alliance for the Americas

(ALBA)

Alternative to NAFTA,

CAFTA

“SUCRE”


Developmentalism
Developmentalism hourly workers:

  • A series of steps that all countries will go through that eventually lead to prosperity and to becoming a “developed” country

    Principles of Developmentalism:

  • Progress made through development “stages”

  • Follow the model created by core countries

  • All countries are in one stage or another (could be early in the process or already finished)

  • Eventually everyone reaches high consumption


Problems with developmentalism
Problems with Developmentalism hourly workers

  • “Development” generally in urban industrial areas

  • Production flows out: Reliant on cheap labor

  • Profits leave the country (no investment in community—just investment for business purposes)

  • Led by the “Golden Rule?”

  • Agglomeration in urban areas leads to:

  • Over-Urbanization

    • Rural poor head to cities for jobs

    • Formation of “Megacities:”

      • Rio de Janeiro, Buenos Aires, Sao Paolo, Calcutta, etc.

    • Shantytowns, Favelas

    • Not nearly enough jobs to support HUGE populations


Urban Growth Rates hourly workers

4/5 growth in Periphery; 50% under poverty line


World urban dwellers
World Urban Dwellers hourly workers


xxxxxx hourly workers

Number of Core

Cities in Top 30

1950 21

1980 11

2010 5


Cities of the world
Cities of the World hourly workers


Urban growth
Urban Growth hourly workers

  • Although Tokyo is the largest city in the world today, the fastest growing “megacities” in the world are in the periphery or semi-periphery

    • Mumbai, India

    • Lagos, Nigeria

    • Karachi, Pakistan

    • Kuala Lumpur, Malaysia

    • Sao Paolo, Brazil

    • Mexico City, Mexico

    • Many others…

Mumbai, India


Case study
Case Study: hourly workers

Rio de Janeiro


  • ~ hourly workers1,100,000 (18.7%) people around Rio live in favelas*

  • Growth Rate: Rio: 7%* Favelas: 24%*

  • ~50% of favela residents have running water*

  • 70% minority population (black, native, or mixed)

  • Why?

    • - Lack of market (abandonment of rural areas for city)

    • Lack of access to market / exports

    • Can’t compete with large agricultural corporations

    • Lure of jobs / possibilities in big city

    • Most end up worse (no job, no land, nothing to go back to)

    • Abundance of cheap labor keeps wages very low

    • Situation worsens, greater need for more “development”

Rio

* World Bank 2009


An uneven scale
An Uneven Scale… hourly workers

  • “Early starters” have huge advantage

    • “Economic Inertia:” easier to continue already functioning process / structure / methods of exploitation than to start a new one

  • “Late starters” actively kept out of Core “club”

    • Political or military pressure / control

    • Periphery leaders often supported to ally their personal interests with those of the external Core country, not with own people / country

    • Financial interests of core (“Race to the Bottom”)

  • Ultimately, why would Core countries want to change current system?


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