Chapter 6

Help Wanted: The Changing Geography of Jobs

Activity 1: Regional Economic Specialization

Activity 2: Regional Multipliers

Learning OutcomesAfter completing the chapter, you will be able to:

Differentiate between primary, secondary, tertiary, and quaternary activity.

Explain how and why certain kinds of economic activities minimize certain kinds of costs.

Identify and explain employment patterns on maps. Define your state’s economic specializations in relation to the

nation, and understand why those specializations exist. Describe how your state’s economic profile has changed over

time. Differentiate between basic and nonbasic activity. Calculate a regional multiplier from the ratio of total to basic

activity.

Figure 6.1

Figure 6.2

Figure 6.3

Figure 6.4

Figure 6.5

Figure 6.6

Figure 6.7

Figure 6.8

Figure 6.9

Figure 6.10

Figure 6.11

Rank 1969 2000TopCompanies

Headquarters Revenues(billion)

Employees TopCompanies

Headquarters Revenues(billion)

Employees

1 GeneralMotors

Detroit, MI $24.3 793,924 GeneralMotors

Detroit, MI $189 388,000

2 AT&T(telephone)

New York, NY $15.7 735,856 Wal-MartStores

Bentonville,AR

$167 1,140,000

3 Standard Oil,NJ (becameExxon)

New York, NY $14.9 145,000 ExxonMobil (oil)

New York, NY $164 106,000

4 Ford Motor Dearborn, MI $14.8 436,414 Ford Motor Dearborn, MI $163 364,000

5 Sears(retail)

Chicago, IL $8.9 355,000 GeneralElec.(machinery,TV)

Fairfield, CT $112 340,000

6 GeneralElectric(machinery)

Fairfield, CT $8.4 400,000 IBM(computers)

Armonk, NY $88 307,401

7 IBM(computers)

Armonk, NY $7.2 258,662 Citigroup(finance)

New York, NY $82 176,900

8 Chrysler(autos)

Highland Park,MI

$7.1 234,941 AT&T(telephone)

New York, NY $62 147,800

9 Mobil (oil) New York, NY $6.6 76,000 PhilipMorris(food,tobacco)

New York, NY $62 137,000

10 Texaco(oil)

New York, NY $5.9 72,572 Boeing(aircraft)

Seattle $58 197,000

11 A&P(groceries)

New York, NY $5.7 135,000 Bank ofAmerica

Charlotte $51 155,906

12 InternationalTelephone &Telegraph

New York, NY $5.5 353,000 SBCCommuni-cations(telephone)

Houston, TX $49 204,530

13 Gulf Oil Pittsburgh, PA $5.0 60,000 Hewlett-Packard(computers)

Palo Alto, CA $48 n.a.

14 WesternElectric(manufacture)

New York, NY $4.9 203,608 Kroger(groceries)

Cincinnati, OH $45 213,000

15 U.S. Steel New York, NY $4.8 204,723 State FarmInsurance

Bloomington,IL

$45 n.a.

16 SafewayStores

Oakland, CA $4.1 72,128 Sears (retail) Chicago, IL $41 326,000

17 Standard Oilof California(Chevron)

San Francisco,CA

$3.8 91,400 AIGInsurance

New York, NY $41 n.a.

18 J.C. Penney(retail)

New York, NY $3.8 105,000 Enron(natural gas,electricity)

Houston, TX $40 n.a.

19 Ling-Temco-Vought(manufacture)

Dallas, TX $3.8 120,582 TIAA-CREF(finance)

New York, NY $39 n.a.

20 PrudentialLife Insurance

Newark, NJ $3.7 56,356 Compaq(computers)

Houston, TX $38 n.a.

Table 6.2 U.S. State and National Employment Percentages by REIS, 1997AL AK AZ AR CA CO CT DE DC FL GA HI ID IL IN IA KS

Primary Agriculture, forestry, and fishing 3.53 4.04 2.56 5.53 2.72 2.77 1.54 1.84 1.38 3.03 2.47 2.81 7.43 2.26 3.04 7.70 5.86 Mining 0.51 2.96 0.64 0.43 0.23 0.85 0.09 0.03 0.04 0.15 0.02 0.06 0.54 0.29 0.28 0.15 1.19Secondary Construction 6.25 5.11 6.63 5.82 4.65 6.53 4.77 6.10 1.53 5.73 5.71 4.16 7.13 4.70 5.76 5.11 5.16 High Tech 0.36 0 0.06 0 0.36 0.4 0.28 0.15 0.00 0.05 0.07 0 0.98 0.05 0.02 0.01 0.04 All other manufacturing 16.55 4.82 8.71 18.32 11.02 7.87 13.76 12.48 1.92 6.39 13.51 2.67 10.41 13.99 19.65 14.02 12.57Tertiary Transportation and public utilities 4.64 7.72 4.51 5.54 4.89 5.36 4.25 3.81 3.00 4.83 5.82 6.25 4.37 5.46 4.75 4.40 4.92 Wholesale trade 4.40 2.59 4.62 3.77 4.96 4.26 4.44 3.24 0.74 4.70 5.77 3.30 4.56 5.17 4.27 4.86 4.85 Retail trade 17.16 16.13 18.09 17.45 15.93 17.71 15.87 17.43 6.63 18.51 17.31 18.71 18.10 16.02 18.41 17.49 17.25 Finance, insurance, and real estate 4.95 5.27 8.28 4.75 8.03 8.43 9.49 12.79 5.26 8.23 6.75 8.42 5.37 8.96 5.96 6.22 5.67

Producer services1 7.36 6.1 13.27 6.35 12.65 12.07 10.38 9.74 15.32 13.15 10.22 6.96 7.42 11.06 6.64 6.27 6.95

Entertainment and lodging svcs.1 3.94 3.37 3.75 1.61 3.19 4.22 1.16 2.21 2.84 4.26 2.18 8.87 2.97 2.06 1.93 2.35 1.68 All other services 13.94 17.45 15.48 16.48 18.05 16.01 22.76 16.66 25.46 17.92 15.26 15.46 15.74 17.76 17.61 18.19 17.86 Federal government and military 4.21 10.66 3.08 2.82 2.87 3.62 2.02 3.13 29.89 2.94 4.21 11.62 3.17 2.18 1.72 1.84 3.28 State and local government 12.2 13.78 10.33 11.12 10.45 9.92 9.20 10.39 6.00 10.11 10.72 10.71 11.80 10.04 9.96 11.39 12.72

MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TNPrimary Agriculture, forestry, & fishing 6.72 7.36 1.51 1.65 1.19 3.61 1.30 3.10 9.72 2.01 5.60 5.14 1.99 1.34 2.45 9.04 3.85 Mining 1.25 0.19 1.47 0.09 0.07 2.07 0.08 0.11 1.07 0.32 2.97 0.16 0.39 0.05 0.11 0.54 0.20Secondary Construction 6.08 5.00 8.92 5.99 4.33 6.37 3.89 6.56 5.15 5.07 4.81 5.75 5.04 4.36 6.44 4.95 5.86 High Tech 0.01 0.00 0.04 0.47 0.05 0.02 0.16 0.47 0.00 0.04 0.13 0.59 0.05 0.12 0.08 1.40 0.04 All other manufacturing 5.54 10.41 4.03 15.01 10.95 5.70 9.53 18.09 5.69 16.97 9.87 12.55 14.46 14.69 17.21 8.92 16.14Tertiary Transportation and public utilities 4.98 5.46 4.69 3.50 6.34 4.19 4.89 4.28 5.33 4.33 5.03 4.49 4.87 3.36 4.05 4.46 5.39 Wholesale trade 3.75 4.95 3.46 4.38 6.43 3.47 4.64 4.35 5.18 4.82 3.84 5.07 4.29 3.64 3.60 4.30 4.73 Retail trade 19.73 17.18 15.96 19.61 15.26 18.44 14.36 16.80 17.28 18.10 17.20 17.68 17.16 16.71 18.75 17.96 17.12 Finance, insurance, and real estate 6.08 7.16 7.01 6.90 9.66 6.01 11.14 5.91 5.65 7.16 5.74 6.61 7.67 7.62 5.92 7.25 6.74

Producer services1 5.70 9.44 8.11 8.61 12.11 8.91 10.73 7.59 5.57 8.76 8.01 9.32 8.88 9.31 8.54 4.43 8.50

Entertainment & lodging svcs1 4.83 1.96 23.63 2.72 3.05 3.66 2.26 1.86 2.47 1.70 1.65 2.76 2.00 1.65 2.51 3.47 2.09 All other services 19.85 16.74 10.48 20.13 17.57 17.13 22.89 15.65 20.49 18.65 18.63 17.26 21.84 23.75 13.65 19.57 17.19 Federal government and military 3.94 2.81 2.28 1.71 2.18 5.39 2.01 3.96 5.22 1.85 4.62 2.16 2.36 3.71 3.97 3.79 2.29 State and local government 11.54 11.33 8.41 9.23 10.82 15.03 12.12 11.28 11.18 10.24 11.90 10.46 9.00 9.69 12.74 9.92 9.85

Table 6.3 Canadian Provincial and National Employment Percentages by Industry, 1996NFLD PEI NS NB QUE ONT MAN SASK ALTA BC YUK NWT CANADA

Primary Agriculture, forestry, and fishing 6.07 12.26 5.51 5.85 3.05 2.60 7.14 14.04 6.10 4.66 2.04 2.23 4.24 Agriculture 0.87 6.54 2.21 2.24 2.23 2.36 6.65 13.55 5.71 2.25 0.58 0.19 3.25 Forestry 1.35 0.57 1.15 2.02 0.70 0.21 0.32 0.45 0.37 1.97 1.22 1.13 0.69 Fishing 3.84 5.15 2.15 1.59 0.11 0.03 0.17 0.04 0.02 0.44 0.24 0.91 0.31 Mining 1.90 0.19 0.86 1.09 0.55 0.47 0.76 2.10 4.83 0.80 6.25 4.89 1.13Secondary Construction 7.05 6.28 5.80 6.37 4.64 5.24 4.58 4.26 6.47 7.12 7.83 6.65 5.50

Computer manufacturing1

0.02 0.04 0.02 0.02 0.06 0.25 0.08 0.06 0.03 0.12 0.00 0.00 0.13

All other manufacturing1

9.03 8.93 10.08 12.20 16.66 16.38 10.41 5.38 7.77 9.80 1.61 1.53 13.51Tertiary Transportation and public utilities 7.18 5.99 6.50 8.02 6.97 6.70 8.42 6.39 7.42 7.12 9.05 10.90 6.99 Wholesale trade 3.32 3.22 4.35 3.68 4.88 5.02 4.59 4.02 4.89 4.60 2.49 2.12 4.76 Retail trade 16.52 14.82 17.04 15.88 16.60 16.31 14.65 13.35 15.74 17.15 14.29 12.32 16.25 Finance, insurance, and real estate 2.85 2.57 4.16 3.45 5.07 6.14 4.54 3.96 4.37 5.51 2.78 3.81 5.27

Producer services1

3.00 2.37 4.10 3.75 6.05 7.41 4.09 2.94 6.54 6.46 4.47 3.40 6.27

Entertainment and lodging svcs.1

2.32 3.27 2.82 2.72 2.63 2.70 3.00 2.95 3.44 3.78 6.78 3.71 2.94 All other services 20.79 16.29 19.65 18.70 19.26 18.28 18.84 16.99 17.51 18.60 15.25 17.85 18.52 Federal government and military 3.93 4.10 6.03 3.81 2.25 2.47 2.75 1.84 1.80 2.08 5.16 4.35 2.47 State and local government 9.95 7.40 7.56 8.59 8.28 7.41 9.00 7.68 6.98 7.54 19.96 23.99 7.79

Figure 6.12-1

Figure 6.12-2

Figure 6.12-3

Figure 6.12-4

Figure 6.12-5

Figure 6.12-6

Figure 6.12-7

Table 6.4 U.S. State and National Employment Percentages by REIS, 1969AL AK AZ AR CA CO CT DE DC FL GA HI ID IL IN IA KS

Primary Agriculture, forestry, and fishing 7.68 3.55 4.67 13.68 1.85 5.27 1.35 3.49 0.34 4.60 4.95 3.80 14.67 3.17 5.38 14.22 11.05 Mining 0.60 2.57 2.87 0.83 0.41 1.70 0.08 0.04 0.03 0.29 0.35 0.02 1.25 0.53 0.40 0.34 1.85Secondary Construction 4.78 5.61 5.98 5.28 4.13 5.22 5.04 5.84 3.04 7.04 4.94 6.12 4.79 4.51 4.94 4.94 4.84 High Tech 0.00 0.00 D D 0.27 0.24 0.58 D 0.00 0.19 0.03 0.00 0.00 0.19 0.03 0.00 0.00

All other manufacturing1 23.47 5.11 13.55 21.52 20.5 11.67 33.08 27.72 2.99 11.53 22.84 5.92 13.32 27.25 32.59 17.89 14.63Tertiary Transportation and public utilities 4.35 6.50 4.42 4.60 5.38 5.42 3.87 4.64 5.42 5.51 5.11 5.69 5.07 5.89 4.89 4.72 5.57 Wholesale trade 3.92 2.23 3.69 3.29 4.57 4.65 3.66 2.76 3.08 4.77 4.94 3.94 3.89 5.60 3.60 3.91 3.67 Retail trade 12.79 9.26 16.86 13.96 14.94 15.89 14.52 15.48 10.08 17.24 13.34 13.35 15.74 15.13 15.21 16.57 15.92 Finance, insurance, and real estate 4.19 3.41 7.08 5.17 7.76 8.43 6.94 5.92 6.54 7.79 5.82 9.10 5.70 6.52 5.34 6.36 6.07

Producer services1 6.90 5.99 7.25 4.06 10.36 8.41 7.14 12.05 14.18 9.63 7.47 7.55 6.26 8.48 4.33 4.47 4.15

Entertainment and lodging svcs1 1.13 2.23 3.63 2.30 2.43 2.92 1.32 1.64 2.58 5.43 2.26 5.67 3.06 1.86 1.55 2.05 2.20 All other services 10.31 4.12 9.28 10.43 7.25 7.3 9.68 2.9 8.9 7.65 7.47 5.04 7.38 6.97 8.58 10.42 9.84 Federal government and military 9.14 37.88 9.19 5.09 9.23 10.88 3.68 7.52 35.24 7.60 10.76 25.11 7.04 4.16 3.67 2.83 7.94 State and local government 10.74 11.54 11.53 9.79 10.92 12.00 9.06 10.00 7.57 10.73 9.71 8.69 11.83 9.74 9.49 11.29 12.27

MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN

Primary Agriculture, forestry, and fishing 13.25 13.03 2.07 2.56 1.06 6.11 1.24 8.68 22.03 2.66 9.04 6.51 2.09 1.07 6.75 21.26 8.08 Mining 2.37 0.41 1.79 0.13 0.15 4.83 0.13 0.17 0.84 0.51 4.58 0.20 0.83 0.05 0.16 0.97 0.40Secondary Construction 4.89 5.20 5.52 6.09 4.77 5.44 3.83 5.25 4.34 5.13 5.05 4.78 4.82 4.36 5.35 4.09 5.03 Hiigh tech 0.00 D 0.00 D 0.28 D 0.39 D 0.00 0.74 D 0.00 0.15 0.00 0.13 0.00 0.00 All Other Manufacturing 8.61 12.61 3.46 29.28 29.39 5.38 21.95 29.85 3.51 31.24 12.14 20.39 30.41 29.45 29.51 5.65 26.69Tertiary Transportation and public utilities 6.35 5.86 5.56 3.83 6.19 5.46 6.25 3.95 4.94 5.20 5.27 5.74 5.54 3.71 3.31 4.21 4.10 Wholesale trade 3.52 4.13 2.71 2.87 4.77 3.11 5.93 3.85 4.23 4.09 3.93 5.03 4.29 3.95 2.78 3.68 4.96 Retail trade 16.54 17.31 14.81 15.58 14.78 15.86 13.93 12.03 15.75 15.37 14.85 15.61 14.76 14.19 11.02 16.29 12.66 Finance, insurance, and real estate 6.47 6.19 5.79 5.14 5.76 5.57 9.93 4.64 4.91 5.71 5.78 7.36 5.48 5.05 3.71 5.99 5.92

Producer services1 4.24 5.87 7.15 3.53 9.19 13.08 12.58 4.48 2.44 6.76 5.80 6.39 6.74 5.36 5.36 2.43 6.76

Entertainment and lodging svcs.1 2.65 2.57 27.26 3.43 1.41 2.51 2.12 1.53 2.40 1.76 1.78 2.47 1.80 1.51 1.97 2.59 1.60 All other services 10.96 9.16 4.39 12.78 7.23 4.54 6.53 8.74 11.68 8.09 9.38 9.03 9.88 10.11 8.95 12.17 8.67 Federal government and military 7.72 6.01 8.61 4.83 5.51 12.76 3.44 7.83 9.84 3.41 11.08 4.39 4.33 12.68 11.65 7.65 5.45 State and local government 12.42 11.66 10.88 9.96 9.51 15.35 11.76 9.00 13.09 9.34 11.32 12.10 8.88 8.51 9.34 13.02 9.69

Table 6.5 Canadian Provincial and National Employment Percentages by Industry, 1971NFLD PEI NS NB QUE ONT MAN SASK ALTA BC YUK NWT CANADA

Primary Agriculture, forestry, and fishing 7.27 17.13 5.62 7.18 4.70 4.30 11.12 22.79 12.26 6.11 1.47 5.01 6.82 Agriculture 0.81 12.39 2.52 3.01 3.55 3.99 10.88 22.52 11.95 2.58 0.14 0.10 5.65 Forestry 1.74 0.23 1.11 3.03 1.07 0.26 0.16 0.20 0.29 3.10 0.98 1.04 0.87 Fishing 4.61 4.40 1.91 1.08 0.08 0.03 0.06 0.05 0.02 0.38 0.00 1.41 0.27 Mining 3.42 0.10 2.19 1.43 1.23 1.25 1.80 1.65 3.66 1.65 16.29 12.32 1.63Secondary Construction 10.77 5.97 7.65 6.93 5.81 6.32 5.16 4.01 7.22 7.16 7.69 4.70 6.32

Computer manufacturing1

0.06 0.00 0.05 0.06 0.12 0.32 0.04 0.04 0.05 0.06 0.00 0.00 0.17

All other manufacturing1

12.14 8.91 14.61 16.37 24.27 24.86 13.11 4.41 8.55 16.40 2.17 3.50 19.87Tertiary Transportation and public utilities 11.37 6.58 8.51 10.19 8.35 6.82 9.25 6.20 7.51 9.71 16.29 11.64 7.88 Wholesale trade 4.49 3.65 3.86 3.82 3.83 4.14 4.64 3.12 4.19 4.80 3.08 0.99 4.09 Retail trade 13.33 10.25 13.39 13.29 11.92 12.89 12.10 9.38 11.63 14.03 11.61 9.40 12.46 Finance, insurance, and real estate 1.82 1.80 3.14 2.70 4.40 4.78 3.65 2.37 3.48 4.68 2.66 1.15 4.20

Producer services1

1.32 0.83 1.59 1.44 2.51 2.84 1.67 1.00 2.35 2.88 1.47 1.15 2.45

Entertainment and lodging svcs.1

1.56 2.28 1.98 1.70 2.06 2.49 2.47 1.98 2.45 3.43 7.90 3.55 2.40 All other services 12.17 11.00 13.15 12.90 13.77 12.48 11.83 10.46 12.32 12.44 8.88 10.60 12.65 Federal government and military 3.57 6.41 10.66 6.36 2.79 3.99 4.14 2.77 3.37 3.61 5.66 18.64 3.86 State and local government 9.54 8.09 8.07 8.51 9.55 8.23 7.91 7.04 8.70 6.97 13.71 14.78 8.42

Definitions of Key Terms

• Agglomeration Economies: Cost savings resulting from location near other firms.

• Basic Industry: An industry producing goods or services for sale to other regions.

• Break-of-bulk: The stage of transportation when a bulk shipment is broken into smaller lots and/or different modes of transportation.

• Capital Goods: Goods used to produce other goods.

• Cost Minimization: An industrial location strategy that seeks to minimize all input and distribution costs.

• Division of Labor: The specialization of workers in particular tasks and different stages of the production process. The spatial division of labor is the specialization of different regions in different stages of the production process.

• Economic Base Model: A demand-driven model in which exports to other regions drive regional development.

• Economies of Scale: Lower production costs as a result of larger volume of production.

• Externalities: Effects that extend beyond any single company. External economies of scale, for instance, are cost savings due to a larger volume of production in the region as a whole rather than a large volume within any one company.

• Industrial Economy: The dominant mode of production and consumption of the late nineteenth and early twentieth centuries, emphasizing large domestic corporations engaged in food processing, heavy equipment manufacturing, and energy products.

• Labor Productivity: Amount produced per worker per hour.

• Localization Economies: Savings resulting from local specialization in a particular industry.

• Market Oriented: The tendency for an industry to locate near population centers in order to save on transport costs, which usually occurs when the final product is more expensive to transport than the raw materials.

• Nonbasic Industry: An industry producing goods or services for sale within the local region.

• Postindustrial Economy: The emerging mode of production and consumption of the late twentieth and twenty-first centuries, featuring huge transnational corporations and localized agglomerations that produce and/or utilize information technology and telecommunications, with greater employment in tertiary and quaternary services.

• Primary Activity: An economic activity that directly extracts or harvests resources from the earth.

• Producer Services: Services provided by businesses to other businesses. Also known as business services.

• Quaternary Activity: Highly skilled, information-based services.

• Raw-Material Oriented: The tendency for an industry to locate near the source of raw materials in order to save on transport costs, which usually occurs when raw materials lose weight in the production process.

• Regional Multiplier: A numerical relationship showing the number of total jobs created for each new basic job in a region.

• Secondary Activity: An economic activity that transforms raw materials into usable products, adding value in the process.

• Services: Tasks done for consumers or businesses for a fee.

• Technological Spillovers: Leakage of technological know-how to other people and firms usually located in close proximity.

• Tertiary Activity: An economic activity that links the primary and secondary sectors to the consumers and other businesses either by selling goods directly or by performing services utilizing those goods.

• Transaction Costs: The unseen costs of doing business; the costs required for gathering information about, negotiating, and enforcing contracts in the exchange of a product or service.