Deindustrialization

in the Core

• Relative decline in industrial employment– Automation

• Reinvestment in higher profit areas– Sunbelt states (non-union)– Semi-periphery and Periphery

Right to Work States

RTW is a state law that prohibits employers and unions from requiring an employee to pay dues or fees to a union in order to keep his or her job. Currently, 22 states have right-to-work laws. While right-to-work laws do NOT allow individual workers to negotiate their own contracts, they do protect a worker from having to involuntarily support a union.Advantages? Disadvantages?

http://www.whatisanamericancar.com/

Consultant: Atlanta's traffic is endangering its growth

Published on: 12/17/07 Metro Atlanta's traffic congestion is endangering its future growth, according to one of the nation's top site selection experts, who advises companies on where to send their jobs.

Atlanta's traffic problem has put it "at the point of no return," said Dennis J. Donovan.Clients of his company, New Jersey-based WDG Consulting, include at any given time about a third of the Fortune 500 companies. And something new is happening in his client meetings that didn't in the 1990's, Donovan said.

"Up until seven or eight years ago when we had Atlanta on a recommended short list" for places to relocate or expand a business, "we rarely heard grumbling," he said.That has changed. Now, he said, when Atlanta shows up on a short list, "Every one of our companies, every one of them, says, 'Boy, isn't there a lot of traffic down there?'"While he had not yet seen his own clients refuse to consider Atlanta, he said he believes that some companies are quietly rejecting Atlanta because of traffic. He cited MeadWestvaco, which relocated its headquarters —and hundreds of new jobs— to Richmond, Va., instead of Atlanta because of traffic.

Lots of places have transportation funding problems, but Atlanta's congestion is the second worst in the nation, Donovan noted, and "the planning and funding to make sure this wouldn't happen hasn't been done.“

Donovan made his comments to the Metro Atlanta Chamber of Commerce, which backed a bill this year allowing counties to group together as a region and put funding for regional projects to voter referendum.

Basic vs. Non-Basic • The basic sector of an economy

includes any industry that brings in money from outside the area.

• The non-basic sector includes all industry that supports the local community and circulates money amongst local industries.

• This can drive you crazy b/c some jobs are This can drive you crazy b/c some jobs are both basic and non-basic!both basic and non-basic!

Why do you want a lot of new basic jobs in Why do you want a lot of new basic jobs in your community?your community?

• Multiplier EffectMultiplier Effect = one basic job produces two = one basic job produces two non-basic jobs non-basic jobs (as opposed to…)

Bob, the world’s best Bob, the world’s best psychologist, has clients psychologist, has clients from from all over the world. He gets paid about all over the world. He gets paid about $1,000 per hour. His office is in Atlanta $1,000 per hour. His office is in Atlanta and he and he spends about 90% of his spends about 90% of his salary inside the city salary inside the city limits. He limits. He therefore helps employ many therefore helps employ many waiters, grocery store clerks, cooks… waiters, grocery store clerks, cooks…

The Probably-Not-Going-to-Multiply Effect

Proximity to Cheap LaborProximity to Cheap Labor• Outsourcing Outsourcing a decision by a corporation to turn over much of the

responsibility for production to independent suppliers – Low level tasks Low level tasks look 4 cheap labor look 4 cheap labor

• Call centers and tax accountants to Bangalore Call centers and tax accountants to Bangalore • Textile manufacturers in East Asia, Latin AmericaTextile manufacturers in East Asia, Latin America

– OppositeOpposite of of vertical integration vertical integration employ someone else employ someone else to perform a task b/c cheaper & more efficientto perform a task b/c cheaper & more efficient

• Outsourcing Outsourcing “ “New International Division of LaborNew International Division of Labor””– Process raw materials near supplyProcess raw materials near supply– Labor-intensiveLabor-intensive work where labor is work where labor is cheapcheap– Skilled labor: R&D, Capital, Marketing, Sales = CORESkilled labor: R&D, Capital, Marketing, Sales = CORE– Unskilled labor: Factory assembly = periphery/semi-Unskilled labor: Factory assembly = periphery/semi-

peripheryperipheryhttp://www.metatube.com/en/videos/10420/The-Simpsons-India-Outsourcing/

Homer’s job gets outsourced to India

Proximity to Skilled LaborProximity to Skilled Labor• Old days: Fordism Old days: Fordism

– One worker: one taskOne worker: one task– Specialization = unskilled laborSpecialization = unskilled labor– Repetitive motion leads to stress injuriesRepetitive motion leads to stress injuries

• Now in high-tech industries: Post-Fordism Now in high-tech industries: Post-Fordism – Work tasks spread out throughout the worldWork tasks spread out throughout the world

• Outsourcing/New Internat’l division of laborOutsourcing/New Internat’l division of labor

– Work in teams performing many tasksWork in teams performing many tasks– Workers solve problems for several tasks in a Workers solve problems for several tasks in a

team (more flexible)team (more flexible)

Role of TNCs/MNCsRole of TNCs/MNCs• Over 70% of Ford’s workforce overseas - what Over 70% of Ford’s workforce overseas - what

30% stayed?30% stayed?• Mergers and acquisitionsMergers and acquisitions

– Huge capital concentrations (F.Y.I…)Huge capital concentrations (F.Y.I…)• Exxon & Mobil = $77 billion merger in 1998 (ExxonMobil now Exxon & Mobil = $77 billion merger in 1998 (ExxonMobil now

most valuable business in the world – made $41 billion last year)most valuable business in the world – made $41 billion last year)• CBS and ViacomCBS and Viacom• Time Warner and AOLTime Warner and AOL• AT&T and CingularAT&T and Cingular

– Tremendous worldwide influence Tremendous worldwide influence – Can choose to locate ANYWHERE to minimize costsCan choose to locate ANYWHERE to minimize costs

• Wal-Mart ($422 billion in sales) would rank 31Wal-Mart ($422 billion in sales) would rank 31stst in in GDP in the world by itselfGDP in the world by itself

MNCs/TNCs cont.MNCs/TNCs cont.

• Conglomerate corporations more and more Conglomerate corporations more and more commoncommon– Companies in different industries merge Companies in different industries merge

togethertogether– Example – KraftExample – Kraft

• Kool – AidKool – Aid• A1 Steak SauceA1 Steak Sauce• Maxwell HouseMaxwell House• CapriSun CapriSun • Lunchables Lunchables

Changing Industrial PracticesChanging Industrial Practices• Just-in-Time DeliveryJust-in-Time Delivery

– Companies minimize storage costsCompanies minimize storage costs– Need proximal suppliers 4 timely deliveryNeed proximal suppliers 4 timely delivery– Industry moving back to core (closer to Industry moving back to core (closer to

customers)customers)– Combination of cheap labor while meeting J-I-T Combination of cheap labor while meeting J-I-T

delivery could be next???delivery could be next???

• Problems:Problems:– Strikes?Strikes?– Weather?Weather?– War/Terrorist Attacks?War/Terrorist Attacks?

Services• Provide a human need/desire and get $$$ Provide a human need/desire and get $$$

for it for it

• TertiaryTertiary

• Quaternary Quaternary

• QuinaryQuinary

• Rubenstein (preferred method):Rubenstein (preferred method):– Consumer services – retail, education, health, Consumer services – retail, education, health,

and leisureand leisure– Business services – professional, financial, Business services – professional, financial,

transportation/informationtransportation/information– Public services – security and protection Public services – security and protection

Gravity Model

• Predicts that the optimal location of a service is directly related to the number of people in the area and inversely related to the distance people must travel to access it

Walter Christaller

Die Zentralen Orte in Suddeutschland

Central Places in Southern Germany

Originally published in 1933, translated into English in 1966

Expanded on by others – Losch’s Zone of Profitability; Brian Berry, etc.

Central Place Theory: Christaller Central Place Theory: Christaller • First Some TerminologyFirst Some Terminology

– Central PlaceCentral Place – market center where goods/services – market center where goods/services are exchanged w/ surrounding customersare exchanged w/ surrounding customers

• Cities/towns usually serve this function Cities/towns usually serve this function

• Area serviced = market area/hinterland (nodal region)Area serviced = market area/hinterland (nodal region)

– RangeRange = distance people willing to travel 4 something = distance people willing to travel 4 something• (Groceries v. medical care) (Groceries v. medical care)

• (TIME! Not distance)(TIME! Not distance)

– ThresholdThreshold = minimum # of people (customers) needed = minimum # of people (customers) needed to sustain a business (viable)to sustain a business (viable)

• Kroger needs 30,000Kroger needs 30,000

– Breaking PointBreaking Point = line where customers will choose to = line where customers will choose to go to another business for a service/goodgo to another business for a service/good

Central Place Theory cont.Central Place Theory cont.

• Central Place Theory attempts to explain the Central Place Theory attempts to explain the pattern of settlements & pattern of settlements & Urban HierarchyUrban Hierarchy = = – HamletHamlet– VillageVillage– TownTown– CityCity– Mega cityMega city– World cityWorld city

What shape should hamlet’s, village’s, town’s, etc. economic reach or hinterland be?

Why?

What does this line represent?

What does this space represent?

Central Place Theory cont.Central Place Theory cont.

• Central Places compete w/ each other 4 Central Places compete w/ each other 4 services & goodsservices & goods

• Thus, larger the city, greater the Thus, larger the city, greater the distance between it & its rivalsdistance between it & its rivals

• BUT, how can you explain Dallas/Ft. BUT, how can you explain Dallas/Ft. Worth? BOSNYWASH? St. Worth? BOSNYWASH? St. Paul/Minneapolis? Paul/Minneapolis?

Would you travel farther to buy a new car or the week’s groceries?

To buy a new car

Would you travel farther to go to elementary school or to go to high school?

Would you travel farther to see your family physician or a heart specialist?

To see a heart specialist

To go to high school

A Hierarchy of Educational

Services

Hamlet:

No Schools

Village:

Elementary

School

Town:

High School

City:

College

Why do we not ever see a perfect central place hierarchy?

• Physical geography is important! Topography and hydrography interfere.

• Consumer behavior is determined by more than economic considerations.

• The automobile has made long-distance travel popular (cheap and easy).

• People make multiple-purpose shopping trips, often bypassing the smallest places.

• The Internet has made it unnecessary to have customers nearby.

• Anything else that Christaller failed to address?

Recent Developments w/ Recent Developments w/ Industry/ServicesIndustry/Services

1. Homogenization of global tastes1. Homogenization of global tastes– World cars: Toyota Carolla best selling car World cars: Toyota Carolla best selling car

ever (Ford Fiesta, Honda Civic, etc. ever (Ford Fiesta, Honda Civic, etc. (Emissions, mpg, meets environ. standards (Emissions, mpg, meets environ. standards for many countries)for many countries)

– Clothes, foods, insurance…Clothes, foods, insurance…

– Bland and moderate foods vs. extreme Bland and moderate foods vs. extreme flavorsflavors

– What concept does this represent???What concept does this represent???• Globalization – every urban place looks the Globalization – every urban place looks the

same/provides the same goods/servicessame/provides the same goods/services

Recent Dev. w/ ServicesRecent Dev. w/ Services2. Tourism’s Rise (11% of all jobs worldwide)2. Tourism’s Rise (11% of all jobs worldwide)

– World’s largest industry/serviceWorld’s largest industry/service– Outside of agriculture, the largest employerOutside of agriculture, the largest employer– Medical tourism Medical tourism

http://www.cnn.com/2010/HEALTH/04/26/cheaper.surgery/index.html?hpt=C1

– EcotourismEcotourism– Indigenous people’s culture sustained or Indigenous people’s culture sustained or

eroded?? eroded??

• Problems??Problems??– Capital FlightCapital Flight– Environmental IssuesEnvironmental Issues

Recent Dev. w/ ServicesRecent Dev. w/ Services3. Advances in 3. Advances in Telecommunication

changes how business is donechanges how business is done– NASDAQ NASDAQ no trading floor; all digital no trading floor; all digital– ““Back offices”Back offices” outside the CBD outside the CBD

headquarters in India, Ireland, Kenyaheadquarters in India, Ireland, Kenya– TelecommutingTelecommuting reduces transportation reduces transportation

costs/traffic issuescosts/traffic issues– Call centersCall centers– Claim-processing relocates to places w/:Claim-processing relocates to places w/:

• Low labor costsLow labor costs• English speakersEnglish speakers

Recent Dev. w/ Ind./Ser.Recent Dev. w/ Ind./Ser.5. Suburbanization of Services5. Suburbanization of Services

– Services historically locate near CBD (Central Services historically locate near CBD (Central Business District)Business District)• Provides more customers for higher threshold Provides more customers for higher threshold

servicesservices• Attracts people from further distances (higher range Attracts people from further distances (higher range

services)services)

– As land values increase in CBD…As land values increase in CBD…• People/Services move to suburbs/overseas People/Services move to suburbs/overseas • Land used more intensively (vertical geography)Land used more intensively (vertical geography)

– Rise of skyscrapersRise of skyscrapers– Underground activitiesUnderground activities

• Manufacturing relocating to suburbs/rural areasManufacturing relocating to suburbs/rural areas

Urbanization Urbanization

Urbanization’s HistoryUrbanization’s History

Urban (city limits) Urban (city limits)

+ suburbs tied to central + suburbs tied to central business districtbusiness district

= Metropolitan Statistical = Metropolitan Statistical AreaArea

http://en.wikipedia.org/wiki/Atlanta_metropolitan_area#Major_Edge_cities_.28from_Atlanta_edge_cities.29

% people living in % people living in urban settings: urban settings: 1800: 3%1800: 3%1850: 6%1850: 6%1900: 14%1900: 14%1950: 25%1950: 25%2000: 47%2000: 47%2013: ?2013: ?

Urban BananaUrban Banana• Crescent-shaped zone of early Crescent-shaped zone of early

urbanization extending across Eurasia urbanization extending across Eurasia from England to Japanfrom England to Japan

• If you include eastern USA it should be If you include eastern USA it should be called “urban snake!”called “urban snake!”

Late 20Late 20thth/ 21/ 21stst Century Urban Trends Century Urban Trends• Increase in service jobs + higher standard of Increase in service jobs + higher standard of

living/affordable cars + Interstate Highway living/affordable cars + Interstate Highway System = commuting System = commuting development of development of suburbssuburbs

• Suburbanization - 50 percent of Americans Suburbanization - 50 percent of Americans live in suburbslive in suburbs

• Diversified economic base for each cityDiversified economic base for each city

• ““Edge cities” develop (no need for CBD Edge cities” develop (no need for CBD travel)travel)

Suburbs evolved from “sub” “urbs” Suburbs evolved from “sub” “urbs” to freestanding, self-sufficient to freestanding, self-sufficient entities.entities.Joel Garreau – Edge CitiesJoel Garreau – Edge Cities

Late 20Late 20thth/ 21/ 21stst Century Urban Trends Century Urban Trends• Problems with new trends?Problems with new trends?

– Urban sprawlUrban sprawl– Increasing mobility Increasing mobility decreases sense decreases sense

of community & increases pollutionof community & increases pollution– Traffic Congestion/Rush hour problems Traffic Congestion/Rush hour problems

telecommuting telecommuting– Degradation of wildlife habitatDegradation of wildlife habitat– Semi-periphery/periphery urbanizing too Semi-periphery/periphery urbanizing too

rapidly (development can’t keep up) rapidly (development can’t keep up) “squatter settlements”“squatter settlements”

http://www.treehugger.com/urban-sprawl-america.jpg

onlinegeography.wikispaces.com/S+-+Urban+Sprawl

John Borchert - 1967John Borchert - 1967Recognized four epochs in the evolution of the American metropolis based on the impact of transportation & communication:

•    1) Sail-Wagon Epoch (1790-1830) – associated with low technology•    2) Iron Horse Epoch (1830-70); steam-powered locomotive & spreading rails•    3) Steel-Rail Epoch (1870-1920); full impact of Ind. Rev. (steel), hinterlands expand•    4) Auto-Air-Amenity Epoch (1920-70); gas-powered internal combustion engine•    High Technology Epoch (1970-today ); expansion of service & information industries (not part of Borchert’s model)

U.S. Urban Growth Stages

Urban areas in LDC v. MDCUrban areas in LDC v. MDC• 8/10 largest cities in LDC & growing (NYC 8/10 largest cities in LDC & growing (NYC

and Tokyo only ones in MDC)and Tokyo only ones in MDC)

• Core are very urban (L.Amer. Exception)**Core are very urban (L.Amer. Exception)**

• Fastest growing megacities are in South Fastest growing megacities are in South and East Asiaand East Asia

• Africa lowest % urban BUT fastest urban Africa lowest % urban BUT fastest urban growthgrowth

• 300+ cities w/ 1 million+ people300+ cities w/ 1 million+ people

Percent Urban by Region

Fig. 13-2b: Over 70% of people in MDCs live in urban areas. Although under half of the people in most of Asia and Sub-Saharan Africa are urban, Latin America and the Middle East have urban percentages comparable to MDCs.

Specialized cities• One/two industries/services dominate =

“Functional Specialization”– ex: Dalton Ga. = carpet manufacturing– ex: Lost Wages… Las Vegas, NV.

• Why do modern cities want a diversified economic base?

• Fact: As cities grow Functional Specialization decreases.

World CitiesWorld Cities

• Control centers for major decision-Control centers for major decision-making/economic interestsmaking/economic interests–Economics (NY, London, Tokyo)Economics (NY, London, Tokyo)

–Political: (D.C., Brussels = EU, NYC = Political: (D.C., Brussels = EU, NYC = UN)UN)

–Fashion (Milan)Fashion (Milan)

Rank-Size RuleRank-Size Rule• (May not apply in LDC) Applies pretty well to (May not apply in LDC) Applies pretty well to

U.S. and to Germany. U.S. and to Germany.

(rank = “n” (rank = “n”

Population = (1/n)pop. of largest cityPopulation = (1/n)pop. of largest city

1/1 = biggest city without peer1/1 = biggest city without peer

4th in size = ¼ of size of #14th in size = ¼ of size of #1

• Ex: city X is 5th largest and the largest has Ex: city X is 5th largest and the largest has 100,000 people… pop. of city X???100,000 people… pop. of city X???

Primate City Rule• #1 city is MORE THAN 2x pop. of #2 city

– Core: UK and France – Periphery: Nigeria, Argentina, Mexico

• Problems w/ countries w/ primate city – No uniform development– People have access to goods/services t/o

country??

• Solution Forward capital – moving the capital to achieve a certain goal

– Abuja, Nigeria– Brasilia, Brazil

Achieve more even development of the country

4 More Dumb Models 4 More Dumb Models That Hurt Your Head::

Models of Urban Structure Models of Urban Structure

1. “Concentric Zone Model”1. “Concentric Zone Model”• Burgess’s Burgess’s tree metaphor – rings expand outward metaphor – rings expand outward

– 11stst Ring: Nonresidential (Businesses locate) Ring: Nonresidential (Businesses locate)– 22ndnd Ring: Factories/Industry/Poor Housing Ring: Factories/Industry/Poor Housing– 33rdrd, 4, 4thth and 5 and 5thth: see below : see below – Rings are diff. due to land valuesRings are diff. due to land values

2. Sector Model - Hoyt

““Sector Model”Sector Model”• Hoyt’s “Hoyt’s “expanding pizza” metaphor” metaphor

• CBD w/ spokesCBD w/ spokes– Each has diff. levels of dev./housingEach has diff. levels of dev./housing– Each centered around mode of infrastructure Each centered around mode of infrastructure – Ex: Mexico City & AtlantaEx: Mexico City & Atlanta

• Pizza slices expand w/ the infrastructurePizza slices expand w/ the infrastructure

• ““Other side of the tracks”Other side of the tracks”

• Very similar to BurgessVery similar to Burgess

3. Multiple Nuclei Model 3. Multiple Nuclei Model – – Harris & UllmanHarris & Ullman

• Lacks ONE strong Lacks ONE strong core/CBD – has MULTIPLE core/CBD – has MULTIPLE nodesnodes

• CBD losing its grasp over CBD losing its grasp over the whole citythe whole city

• Ex: L.A.Ex: L.A.• Areas w/ incompatible land Areas w/ incompatible land

NOT close together (e.g. NOT close together (e.g. housing & heavy industryhousing & heavy industry

• Driving Era ModelDriving Era Model

4. Urban Realms – 4. Urban Realms – Hartshorn and MullerHartshorn and Muller

• Problems w/ other models: People Problems w/ other models: People increasingly NOT working in CBDincreasingly NOT working in CBD

• Multiple metropolitan areas interact – each Multiple metropolitan areas interact – each area functions separately in some waysarea functions separately in some ways

• Outer cities became more Outer cities became more self-sufficient self-sufficient (what do we call these cities?)(what do we call these cities?)

– Duplicate certain functions of central cityDuplicate certain functions of central city– Regional shopping centers become CBD’s of Regional shopping centers become CBD’s of

the outer nucleithe outer nuclei– Business/Industrial parks locating outside the Business/Industrial parks locating outside the

central citycentral city