why do industries face problems? 11.4. stagnant demand demand for many manufactured goods has slowed...
Post on 13-Dec-2015
213 Views
Preview:
TRANSCRIPT
Stagnant DemandDemand for many manufactured goods has slowed in MDCs during the past 3 decades
because…
•Domestic markets are shrinking
•New technologies have made older products
obsolete/less appealing.40 mpg.
•There is market saturation as a result of better quality, longer
lasting products.
Increased Capacity WorldwideHigher industrial capacity is a result of the global diffusion of the Industrial Revolution
into less developed regions…
…countries in LDCs like Brazil, China, and India have industrialized in an attempt to become more economically
self-sufficient.
European governments subsidize steel mills, helping to keep them open, which
results in oversupply & lower profits worldwide
Cooperation within Trading Blocs
The establishment of trading blocs have increased cooperation & trade between countries
within the blocs.
the Western
Hemisphere
Western Europe
NAFTA The EU
East Asia
Competition between trading blocs have
forced MDCs to modernize their plants by buying
more efficient equipment…
Competition between Trading Blocs
…this has resulted in plant closings and job loses in MDCs.
Transnational Corporations
Many transnational corporations have
transferred much of their production/manufacturing
facilities to LDCs because of cheaper labor cost
Furniture factory in China
Maquiladora producing swimsuits for the U.S.
market
This movement of jobs from MDCs to LDCs is sometimes
referred to as the NEW INTERNATIONAL DIVISION of
LABOR
Why do corporations want to move their manufacturing faculties from
MDCs to LDCs?• To make money!
•Communication & transportation are cheaper and quicker.
• Operating costs are cheaper due to lower-priced labor, tax breaks, less environmental regulations…
(Comparative Advantage)
• The elimination/lowering of tariffs or other trade barriers
How has the movement of jobs from the MDCs to LDCs impacted the United States?
• Unemployment in the Midwest/Northeastern US
• Migration from the Rust Belt to the Sun Belt
• An increase in sales for retail businesses
• More jobs in the service sector
• A decrease in manufacturing/industry
How has the movement of manufacturing jobs from MDCs to LDCs impacted countries
like Mexico, China, and India ?
• Job Opportunities
• More women in the workforce/lower population rates
• Children working instead of in school
• Widening gap between the rich and poor
• Uneven regional growth
• rural out-migration/urban in-migration
• More pollution
Disparities within MDCs
One of the biggest problems in MDCs is the uneven distribution of industry
Northern Italy and western Germany are Europe’s most
important industrial
areas…other parts of Europe have relatively little industry.
Former Communists CountriesMany eastern European countries still lag behind
western Europe when it comes to providing consumer goods
Because the “planned”
economy of Eastern
Germany did not produce
many consumer goods, this part
of a united Germany still
has few industrial jobs
Outdated factory in the eastern part of
Germany
top related