Importance of Site Factors: Labor
Situation Factors are related to the location of an industry near its input (materials) and its market. Site Factors take into account the location of an industry near its pool of labor, land, and capital.
Labor: The cost of labor must be taken into account for any manufacturing industry in the world. For some, labor cost is the most expensive cost to the factory or industry. As of 2015, the UN International Labor Organization (ILO) has determined the average monthly earnings of employees in manufacturing at $1,029.76, as compared to the average monthly earnings of employees as a whole at $809.00. Around 500 million employees worldwide work in the manufacturing industry with China providing around 25% of those employees.
Labor-Intensive Industry: To put simply, this industry is where most of its expenses goes to workers in the form of wages and/or compensation in some way. If an industry has a low amount of expenses as compared to the industry average going to workers, it is a capital-intensive industry.
Textiles: The textile industry is a great example of a labor-intensive industry. It requires a large amount of workers, usually low-skilled, and is thus concentrated more in LDCs than in MDCs, specifically in cotton producing countries. This industry has a higher percentage of manufacturing employment worldwide than the dollar value percentage of manufacturing worldwide.
LDCs: These countries tend to be more prominent in the various stages of the textile industry because of low labor costs due to lower wages. Because the textile industry is a labor-intensive industry, LDCs can cut costs with lower wages and use that savings for shipping. Thus, these LDCs, led by China and India, can be near labor inputs but not necessarily have proximity to markets (Europe and North America).
Labor: The cost of labor must be taken into account for any manufacturing industry in the world. For some, labor cost is the most expensive cost to the factory or industry. As of 2015, the UN International Labor Organization (ILO) has determined the average monthly earnings of employees in manufacturing at $1,029.76, as compared to the average monthly earnings of employees as a whole at $809.00. Around 500 million employees worldwide work in the manufacturing industry with China providing around 25% of those employees.
Labor-Intensive Industry: To put simply, this industry is where most of its expenses goes to workers in the form of wages and/or compensation in some way. If an industry has a low amount of expenses as compared to the industry average going to workers, it is a capital-intensive industry.
Textiles: The textile industry is a great example of a labor-intensive industry. It requires a large amount of workers, usually low-skilled, and is thus concentrated more in LDCs than in MDCs, specifically in cotton producing countries. This industry has a higher percentage of manufacturing employment worldwide than the dollar value percentage of manufacturing worldwide.
LDCs: These countries tend to be more prominent in the various stages of the textile industry because of low labor costs due to lower wages. Because the textile industry is a labor-intensive industry, LDCs can cut costs with lower wages and use that savings for shipping. Thus, these LDCs, led by China and India, can be near labor inputs but not necessarily have proximity to markets (Europe and North America).
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Related Links: Industry- Site Factors: Land, Labor, and Capital Quiz Importance of Site Factors: Land and Capital AP Human Geography Quizzes AP Human Geography Notes |