Geography Reference
In-Depth Information
a bulky and fairly low-cost item, concrete is not the sort of thing that can be transported profit-
ably for a long distance. Thus, anyone going into the concrete business would be well-advised
to locate his or her business within the city or on its edge as opposed to, say, out in the country.
Cost of labor
In the last couple of decades, numerous manufacturing firms in the United States and other developed
countries have closed down and relocated to developing countries where people do the same work
as, say, American counterparts, but for much less pay and fewer (if any) benefits. As a result, lots of
manufactured goods that used to have “Made in the USA” emblazoned on them now say “Made in
Malaysia,” or the Philippines, or China or somewhere else. Believe me, if you aren't aware of this,
then you have a major geography lesson waiting for you in your clothes closet. Check out the labels
on your clothing and shoes. Chances are good that many, if not a majority, are imports. The two fol-
lowing sections give examples.
My sports jacket
Consider the sports coat I wore to work today. It has two labels inside. One says “100% camel's hair”
and the other says “Made in Costa Rica of USA components.” That means the company that makes
the jacket imports camel hair cloth, probably from another company in the Middle East, and then cuts
it up into components that will be sewn together to make apparel in different sizes — a “40 Regular”
in my case.
But instead of having the sewing done in the USA, the manufacturer ships it off to Central America.
There, seamstresses perform their work probably for a third or less of what the company would have
to pay an American worker. Afterwards, the jackets are sent back to the U.S. for sale. Even though
it costs a bundle to send the bundles back and forth, the money saved by having the sewing done by
comparatively inexpensive foreign labor more than makes up for the transportation costs.
Data processing
Manufacturing is not the only activity that has gone abroad to take advantage of low-cost labor —
so has data processing. For example, a well-known American insurance company receives premium
payments at a U.S. address, but then ships everything to Ireland for processing. Another company
does basically the same thing, but has its data processing done in Ghana, West Africa. Similarly, a
well-knownAmericanairlinehassomeofitsdataandtime-cardprocessingdoneinBarbados.Ineach
case, the prime rationale is to save money on labor costs.
