1. Why do Industries Face Problems? 11.4

2. Stagnant Demand Demand 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.

3. Increased Capacity Worldwide Higher 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.

4. European governments subsidize steel mills, helping to keep them open, which results in oversupply & lower profits worldwide

5. Industrial Problems in More Developed Countries

6. 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

7. 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.

8. 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

9. 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

10. 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

11. 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

12. 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.

13. Former Communists Countries Many 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

14. Problems for LDCs Two major problems for LDCs include… having inadequate infrastructure in place being too far from markets (N. America/W. Europe)