3.B- global and structural economic change Flashcards

1
Q

what is globalisation?

A

the growing integration and interdependence of people’s lives in a complex process with economic, social (cultural), political and environmental components

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2
Q

what are the most relevant flows and players involved in globalisation in terms of economic changes?

A
  • TNCs/supranational organisations
  • governments
  • remittances
  • containerisation of shipping
  • the internet
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3
Q

what is the global shift?

A

the locational movement of manufacturing production in particular from ACs to EDCs and LIDCs from the 1970s onwards

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4
Q

what is new international division of labour?

A
  • reorganisations of production at the global scale, as a result of deindustrialisation in advanced countries and the global spread of TNCs
  • this has produced an overall pattern of higher paid managerial jobs in ACs and lower paid labouring jobs in LIDCs
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5
Q

what is economic restructuring/structural economic change?

A
  • the change in proportions of people working in various economic sectors
  • e.g. the change in ACs from secondary to tertiary employment
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6
Q

why do countries change from the PRIMARY sector?

A
  • as a country develops, farming/fishing/forestry/mining becomes more mechanised
  • therefore fewer people are required
  • also, with globalisation, it is cheaper/easier to import raw materials from overseas which can be manufactured/consumed in the more developed place
  • higher paid jobs emerged
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7
Q

why do countries change from the SECONDARY sector?

A
  • mechanisation leads to manufacturing
  • it is, however, cheaper to manufacture overseas and then import them (e.g from China to UK) as there is a lower minimum wage
  • leads to deindustrialisation of the country importing
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8
Q

why do countries change from the TERTIARY sector?

A
  • higher paid jobs mean people have more money to spend
  • education has increased = higher skilled workers
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9
Q

why do countries change into the QUATERNARY sector?

A
  • higher paid jobs mean people have more money to spend
  • education has increased = higher skilled workers
  • technological innovation and growth
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10
Q

how does the primary sector change a place?

A
  • industrialisation = people move away from rural areas and lower paid jobs
  • services decline and businesses don’t move in due to a lack of people
  • leads to rural decline
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11
Q

how does the SECONDARY sector change a place?

A
  • as a country moves from EDC to AC, deindustrialisation occurs
  • seen in the UK in major cities
  • it leads to inequality, poverty, deprivation, reduction in life expectancy and rise in unemployment
  • the negative multiplier effect occurs as there is less money being invested in the place
  • the built environment becomes run down, opportunities disappear and often that leads to a lack of motivation/aspiration which affects education levels
  • these areas become poor and land becomes cheap, which does mean that in the future they are cheap places to develop new industry if it can be attracted in.
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12
Q

how does the TERTIARY/QUATERNARY sector change a place?

A
  • businesses move in
  • high paid jobs = more local spending = increased value of the area
  • e.g. Bath/Bristol Science Park
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13
Q

what does structural economic change mean?

A
  • a change in the economic opportunities in a place
  • this could be new industry setting up (e.g. growth of tertiary sector) or industries closing down (e.g. deindustrialisation)
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13
Q

what does structural economic change mean?

A
  • a change in the economic opportunities in a place
  • this could be new industry setting up (e.g. growth of tertiary sector) or industries closing down (e.g. deindustrialisation)
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14
Q

how does structural economic change impact opportunities and challenges?

A
  • the key idea is that for many places, there has been traditionally one major industry and this has created jobs and developed the positive multiplier effect.
  • this could be secondary (e.g. a massive car factory like Nissan in Sunderland)
  • tertiary (e.g. a hospital/school e.g bath)
  • or quaternary (a science park like Cambridge)
  • places rely on large investment from major industries (usually TNCs) to build an economy. if an industry leaves, it can lead to negative multiplier effect
  • the most successful places are often ones that have a range of different industries, therefore losing one doesn’t mean that the economy of the entire place collapses.
    - the key thing is to recognise that some structural change is positive and some is negative
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15
Q

POSITIVE MULTIPLIER EFFECT

A
  1. establishment of large manufacturing plant
  2. expansion of local job opportunities and population
  3. inflow of businesses to satisfy increased local demand - secondary and tertiary development
  4. substantial rise in income per capita
  5. higher tax base increases local government spending power
  6. improvement of physical and cultural infrastructure
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16
Q

what impacts on a place would occur if the large industry was to close down or relocate?

A

DEINDUSTRIALISATION
- loss of jobs
- businesses and services degrade/move away
- rural degredation

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17
Q

what are the positive impacts of structural economic change in ACs?

A
  • cheaper imports of all labour-intensive products keeps cost of living down
  • greater efficiency releases labour for higher productivity sectors
  • growth in LIDCs may lead to a demand for exports from ACs
  • greater industrial efficency should lead to development of new technologies, promotion of entrepreneurship and attraction of FDI
  • loss of mining and manufacturing industry can lead to improved environmental quality.
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18
Q

what are the negative impacts of structural economic change in ACs?

A
  • rising job exports leads to inevitable job losses
  • job losses are often of unskilled workers
  • big gaps develop between skilled and unskilled workers
  • employment gains will only occur if industrialised countries can keep their wage demands down
  • job losses are invariably concentrated in certain areas and certain industries. this can lead to deindustrialisation and structural unemployment in certain regions
  • branch plants are particularly vulnerable in times of economic recession as they are the first to close, often with large numbers of job losses.
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19
Q

what are the positive impacts of structural economic change in EDCs and LIDCs?

A
  • higher export-generated income promotes export-led growth. promotes investment and potentially leads to a +ME nationally
  • can trickle down to local areas with many new highly paid jobs
  • can lead to exposure to new technology, improvement of skills and labour productivity
  • employment growth in labour-intensive manufacturing spreads wealth
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20
Q

what are the negative impacts of structural economic change in EDCs and LIDCs?

A
  • unlikely to decrease inequality as jobs tend to be concentrated in core region of urban areas. may promote in-migration
  • disruptive social impacts e.g. role of TNCs potentially exploitative and may lead to sweatshops. also may move in on LIDCs too, leading to instability
  • can lead to overdependence on a narrow economic base
  • can destabilise food supplies as people give up agriculture
  • environmental issue associated with over-rapid industrialisation
  • health and safety issues because of tax legislation
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21
Q

KEY POINT STRUCTURAL ECONOMIC CHANGE

A
  • a key point to remember is that Structural Economic Change is a spatially uneven process
  • i.e. it will affect different places in different ways, meaning that across a country it creates high levels of inequality (e.g. N/S divide in the UK)
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22
Q

explain structural economic change

A
  • as countries develop they progress through primary, secondary and finally tertiary dominated industries (most advanced countries develop a quaternary sector)
  • within countries, certain regions will benefit from these changes and certain regions get left behind (i.e. rural areas as places industrialise, or big industrial cities as places move towards a service sector economy)
  • this change is STRUCTURAL ECONOMIC CHANGE, and it will create opportunities for some people in some places and cause inequalities to grow for other people in other places
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23
Q

what happened in 1900?

A
  • in 1900, cities such as Manchester and Glasgow thrived under manufacturing industries
  • and there were increased opportunites in terms of education, health and life expectancy, jobs and leisure activities improving QoL.
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24
Q

what has happened since the 1960s?

A
  • since the 1960s, deindustrialisation has led to a decline in manufacturing industries (mostly in the north of england) and a growth of tertiary/quaternary industries (mostly in the south around london and the m4 corridor)
  • meaning that the opportunities in the UK are centred around the south and due to deindustrialisation the inequalities are felt most starkly in the north
  • Glasgow for instance has a life expectancy 14yrs lower than Westminster, demonstrating how the inequalities can be felt in people’s health and wellbeing
  • and also in peripheral regions of the UK - often small coastal/rural areas have higher levels of inequality as they are further from structural economic change.
25
Q

what is cyclical economic change?

A
  • just means the economy goes up and down (‘booms’ and ‘busts’)
  • all economies go through these changes (e.g. COVID and the 2008 banking collapse both created significant recessions, but in between periods of stable growth created booms)
26
Q

how does glasgow’s life expectancy differ?

A
  • glasgow has a life expectancy 14yrs lower than Westminster
  • demonstrating how the inequalities can be felt in people’s health and wellbeing
27
Q

what happened to unemployment in 1992?

A

unemployment rose to over 10% in 1992

28
Q

what happened for young people in 2008?

A
  • young people experienced particularly high levels of job losses and unemployment
  • the recession was associated with a reversal in previously falling suicide rates in England, as well as increases in suicide attempts and depression, particularly in males
  • it is thought that in Europe and the USA, more than 10,000 extra suicides occurred during this period
29
Q

what happened in 1974?

A
  • blackouts were common due to lack of oil.
  • prices of oil quadrupled
  • people could not afford to heat their homes.
  • car manufacturers noticed collapse in demand for cars with big fuel demand, changing the demand for cars from the big US style cars to smaller, cheaper/economical Japanese cars overnight
30
Q

what happened to house prices in 2008?

A
  • house prices drop by 16%, increasing social inequality
31
Q

what was unemployment like by 2011?

A

by the end of 2011, almost 2.7 million people were looking for work

32
Q

what does unemployment result in?

A
  • unemployment or pay freezes result in people feeling/being worse off
  • less disposable income results in lifestyle changes
  • going out less, spending less on luxuries = negative ME
33
Q

how was inflation managed?

A
  • in the public sector, a pay freeze (from 2011) and pay cap (from 2013) kept wage rises below inflation
34
Q

what happens in recessions?

A

during all recessions, there is a dip in life expectancy and and increase in mortality rates as the government cut spending in the NHS

35
Q

what happened in 1973?

A
  • UK businesses could export products to Europe without having to pay import taxes meaning they earned more money.
  • this gives more disposable income, improving QoL
36
Q

what happens when the economy is strong?

A
  • when the economy is strong, people get taxed more and this can be spent on healthcare/schools/infrastructure projects (improving QoL)
37
Q

what happens to graduates following recessions?

A
  • graduates leaving university following recessions face uncertainty in getting a job - social and economic implications, graduate unemployment coupled with higher tuition fees can put people into debt
  • can also impact on ability to get on the housing ladder
  • inequalities between generations
38
Q

what happened to unemployment between 1997-2003?

A
  • unemployment was constantly below 1.5 million during the first half of the 2000s, a level not seen since the late 1970s
  • this will reduce levels of inequality as more people are working
39
Q

what happened in 1997?

A
  • tony blair and ‘new labour’
  • banks were deregulated a bit, meaning they earned more money (around 10% of UK GDP)
  • and paid more tax, allowing the govt to invest more in tackling social inequality
40
Q

what do boom years result in?

A
  • boom years result in small businesses feeling more secure
  • this can result in more investment in entrepreneurs and more innovation
41
Q

what happened between 2001-2003?

A
  • iraq and afghanistan wars
  • £7bn annually was spent on each war
  • diverting money from services which could be supporting people in the UK
42
Q

what is a recession?

A

A recession is a significant, widespread, and prolonged downturn in economic activity

43
Q

what has the cyclical economy been linked with?

A
  • the cycles of growth and stagnation have been linked with technological innovation with new industries providing the basis for a boom
  • once the technology is no longer “new”, fewer opportunities for growth exist and boom is followed by recession
44
Q

how can the government influence inequalities through PLANNING?

A
  • housing
  • e.g. affordable housing in new developments
    = council estates
    = grouping low income families together
45
Q

how can the government influence inequalities through SUBSIDIES?

A
  • govt benefits
  • free childcare, child benefits, free school meals etc
46
Q

how can the government influence inequalities through LAW?

A
  • anti-discrimination laws
  • minimum wage (adults £10.50)
  • living wage
47
Q

how can the government influence inequalities through TAXATION?

A
  • if you’re living in a less affluent area, less money will go to the council and then less money will go towards development (inadvertently increasing inequality)
  • increased taxes on higher earning people and decreased on lower earning
    = progressive taxation
  • £12,500 or below = 0%
  • £12,500 - £50,000 = 20%
  • above £50,000 = 40%
48
Q

what does the graph show?

A
  • SPATIAL VARIATION
  • mostly, money is going to developing the deindustrialised areas
  • london is odd one out
    > London is getting more spending and has the biggest population
  • areas spending the most in tax aren’t necessarily getting the most spent back. disparity
  • targeted spatial variation
49
Q

how does government TAXATION work?

A
  • income tax is often used by govts to redistribute wealth from more prosperous to less prosperous groups, and so create a fairer society
  • most govts have progressive tax systems where the better off pay a larger proportion of their incomes in tax
  • essential items such as food may be exempt from tax
  • this benefits poorer groups
50
Q

how effective is government TAXATION in tackling social inequalities?

A
  • income inequality is lower than 2010-2011
  • now the richest 20% in society contribute 4x as much in tax than they recieve in public spending
  • since 2008, the avg annual disposable income of the poorest 1/5 of households has risen by £100
51
Q

how do government SUBSIDES work?

A
  • govts also try to reduce inequality by giving subsidies to poorer groups
  • children in poor families may get free school meals, clothing allowances and help w/ university fees
  • pensioners may get subsidies for fuel and transport
  • other subsidies may include free child care for single parents
  • low wage earners, unemployed workers and those w/ LT disability are entitled to benefits
52
Q

how effective are government SUBSIDES in tackling social inequalities?

A
  • recession of targeted efforts towards child poverty has led to an increase in 2011
  • there has been a major decrease in worklessness and therefore less people on benefits
  • poverty among pensioners decreased by 50% over the period and their income today on avg exceeds the income of adults in work
  • as wages fall, house prices rise
53
Q

how does government PLANNING work?

A
  • govts, charities and housing agencies often give priority to upgrading housing and services in the poorest areas.
  • planning is often organised geographically and is targeted at the most deprived areas which vary in scale from neighbourhoods to entire regions
54
Q

how effective is government PLANNING in tackling social inequalities?

A
  • geographical inequality amongst the poorest children and their wealthier counterparts has increased as attainment in London schools has improved far faster than in the rest of the country
  • the geographical divide has widened w/ regional differences in the labour market greater today than the start of the period
55
Q

how does government LAW work?

A
  • legislation exists which outlaws discrimination on racial, ethnic, gender and age criteria and aims to give equal opportunities to all groups
  • the poorest groups of workers are protected by minimum wage legislation
56
Q

how effective is government LAW in tackling social inequalities?

A
  • since the global recession, wages have stagnated
  • extreme low pay has been largely eliminated but 1 in 5 people are stuck on low pay
    > a consistently higher propertion than other comparable
57
Q

how does government EDUCATION work?

A
  • governments often provide funding for training and upgrading skills in order to raise levels and qualifications, improve employment prospects and boost economic growth
  • education programmes designed to improve personal health (e.g. diet, obesity, smoking) are often targeted at the poorest in society
58
Q

how effective is government EDUCATION in tackling social inequalities?

A
  • creates social mobility
  • poor children are 4x as likely to become poor adults
  • extended 15hrs a week free childcare given to all 3-4 yr old to the most disadvantaged 2 yr olds
  • Pupil Premium worth £2.5bill in 2015
  • national scholarships for low income familys to afford uni
  • 300,000 less children are in relative poverty
  • 390,000 fewer are growing up in workless families
  • 2/3s of disadvantaged children still dont get 5 good GCSEs
59
Q

how can governments use healthcare to tackle social inequality?

A
  • in ACs, healthcare in provided by a combination of govt and private organisation
  • in the UK, the NHS is “free at the point of delivery” and people pay for it through the taxation system
  • the provision of health services varies eg. inner cities and remote rural areas can be short of GPs and healthcare workers
  • affluent suburban areas are well served
  • language and cultural barriers and the role and status of women have been obstacles to recently arrived migrants accessing healthcare services
  • there is a hierarchy in the provision of healthcare services from the GP surgery through to specialist units treating rare diseases in large hospitals