Chapter 5: returning to labor, capital, land - PowerPoint PPT Presentation

Loading...

PPT – Chapter 5: returning to labor, capital, land PowerPoint presentation | free to download - id: 6dce89-YTQyY



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Chapter 5: returning to labor, capital, land

Description:

Chapter 5: returning to labor, capital, land & technical skills How important are these factors in the cost of production? What are key variations spatially – PowerPoint PPT presentation

Number of Views:16
Avg rating:3.0/5.0
Slides: 55
Provided by: William1099
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Chapter 5: returning to labor, capital, land


1
Chapter 5 returning to labor, capital, land
technical skills
  • How important are these factors in the cost of
    production?
  • What are key variations spatially
  • How does scale affect our view of these issues?
  • Going beyond the text the issues raised in this
    chapter are fundamental to consideration of
    economic activity for the rest of the quarter

2
Labor
  • How important is labor as a location factor for
    manufacturers?
  • Lloyd Dicken my old textbook Production
    workers 25 of value added, All labor 46 of
    value added
  • What is value added?
  • Value added value of shipments - cost of
    goods sold

3
An Example of Value Added Margi Beyers
Pizza/Bread Stone
  • Wholesale 16.
  • Less
  • Cost of clay 4
  • Cost of glaze 1
  • Cost of energy 2.50
  • Other overhead (labels) .50
  • Transport Cost (Raw Material
  • Delivery .50
  • Capital Charges (kiln, equipment) 1.00
  • Subtotal 9.50
  • Value Added 16 - 9.50 6.50

4
Wages per dollar of value added Average .26
5
Wages per dollar of shipment Average 12
6
Production workers as a proportion of total
Employment Average 71
7
Labor Costs among regions
  • Production work pay/hour 6.68 to 12.34 in
    1983
  • In 1997 - Low 9.96 South Dakota
  • - Mean 13.17
  • - High 17.17 Michigan
  • Classic view of wage rate equilibrium

In 2011 Low 18.13 In Mississippi High 35.45 In
D.C., 28.24 in Connecticut
D

S
S
WA
D
S
WB
D
D
S
QA
QB
8








Right to work states













U.S. Average 13.9 of Wage Salary Workers
9
Evidence on Regional Wage Rate Convergence
  • Historic movement of blacks from the South to
    the Industrial North
  • Mexican migration into the U.S. today
  • Internal movement in the U.S. job pull
  • for ?
  • Producers ability to move capacity to cheap
    labor - U.S. shoes, textiles

Social, Environmental
10
Webers Analysis of Low Cost Labor
Critical Isodapane - Tr. Cost Labor
Cost Differential
4
W
M3
M1
5
2.5
1
L
C
M2
At W labor costs are 5 per unit output below
L Isodapanes - contours of transport cost
increase away from L
11
(No Transcript)
12
Unionization Rates Labor Cost Differences
  • A falling percentage over time
  • 1983 20.1
  • 1991 16.1
  • 1999 13.9
  • 2007 12.1
  • Wage Rates above Non-Union
  • 2006 23.33 per hour - union
  • 2006 18.53/week - nonunion

13
Labor Costs Versus Labor Productivity/Skill as a
Factor in Regional Development
  • Washington State Investment In Human Capital
    Study
  • of companies dissatisfied with employee skills
  • (1) Basic- ca. 35 communication ca. 40,
    problem-
  • solving 48, work habits - 42
  • (2) Educational - difficulty in finding
    employees
  • basic skills below high school 38, high
    school 56,
  • job related specialized skills 86, liberal
    arts degree 59,
  • advanced degree 67.
  • (3) Key needs - in Training Programs, and in
    types of
  • training provided.

14
Local Examples of Labor Force Programs
  • Washington State Workforce Board
  • Puget Sound Regional Council Prosperity
    Partnership
  • WorkSource Oregon
  • Idaho Workforce Development Training Program

15
Geographers New Views of Labor and Regional
Advantage
  • Storpers vision of untraded interdependencie
    s as regional assets
  • Economic Sociology
  • - Institutionalism embeddedness structure
    and social reproduction networks other key
    factors?

16
Thomas Friedman NYT Reporter
  • Advocate of globalization, but also the need for
    labor force development here in the U.S. in the
    face of this trend
  • His recent book was on the NYT best-seller list
  • He editorialize for support for an ex-M.I.T.
    president-headed report called Rising Above the
    Gathering Storm.
  • Link www.nationalacademies.org

17
  • Friedmans Ten Flatteners
  • Outsourcing
  • Offshoring
  • Open- Sourcing
  • Insourcing
  • Supply Chaining
  • In-forming (search engines)
  • The Internet
  • Fall of the Berlin Wall
  • Netscapes Public Offering
  • Work Flow Software
  • The Steroids (Digital,
  • Mobile, Personal and
  • Virtual)
  • He argues together they have
  • allowed unparalleled
  • collaboration

18
Friedman Concludes about the U.S.
  • Clearly, offshoring business services is
    intimately tied to
  • other ongoing forms of restructuring
  • It provides challenges and opportunities for
    advanced
  • economies as well as developing countries
  • There are significant research opportunities
  • There are also many policy challenges

19
Capital Sources Startup versus Later in Firm
Life
  • Startup Personal Sources, mattress money,
    Business Angels, Venture capital, IPOs, and
    business loans
  • After Startup Internal retention of profit,
    (further) stock offerings
  • reliance on formal capital markets
  • Selling out, being acquired to obtain capital
  • for expansion

20
The Circular Model of Capital Flow
  • Interest rates
  • Tax policy public
  • investment

Stock of Productive Capacity
Industrial Output
Final Consumer Demand
Investment
Savings
Business Income (Value Added)
Payments to Households
Savings - retained earnings, household savings,
institutional investors, international capital
sources
21
U.S. Capital Investment Trends
22
2006 Capital Stock Per Employee
Mean 149,776
23
Manufacturing Capital and Wages Per Worker 2006
24
Net Stock Private Fixed Assets Per Employee - 2007
25
Evidence of long-term reductions in capital tied
up in inventories due to better logistics in the
product delivery system
26
Manufacturers Ratio of Inventories to Shipments
Impact of the Great Recession
27
Regional Differences in the Availability of
Capital
Interest Rate
DB
SB
SA
DA
QA
QB
Capital Flows respond to interregional/internation
al variations in interest rates, but 1.
Lender conservatism 2. Institutional
impediments 3. Structural differences
28
Capital Mobility
  • Immobility of physical capital
  • High level (potentially) of mobility for
    monetary capital, but
  • (A) institutional impediments - nations, trading
    blocs, currencies
  • (B) industrial differences - firm size, age,
  • business concept
  • (C) public policies - incentives such as tax
    write-offs, lower interest rates
  • (D) new forms of integration (IT networks),
  • new types of securitization (e.g. REITs) use
    of Modern Portfolio Theory

29
Spatial Variations in the Cost of Capital
  • Historic fragmentation of capital markets
  • Much more integration now, but still
  • A herding and fleeing in commercial real
    estate markets
  • B internationalization of markets yet
    institutional/cultural variations in practices
  • C changes in investor culture IPOs .com
  • phenomena

30
Managerial and Technical Skills Corporate
Headquarters
  • The concentration of these in a few very large
    cities
  • Synergistic interactions at the top of the
    corporate hierarchy
  • Decentralization of these headquarters
  • Structural relationship between headquarters
    location and location of RD facilities
    historic geographic co-location

31
Borcherts Changes in Industrial Headquarters
32
Patents As Indicators of Technical Knowledge
Effort
33
Change in State Level Distribution of Patents
34
Distribution in cities has gotten more unequal
in recent years, largely due to big changes in
the West. The big gainers have been Driven by
Boise, Rochester NY, Austin- San Marcos,
Burlington, Ft. Collins-Loveland, And Rochester
MN
35
Technical Knowledge
  • Fundamental to any type of production system
  • Constantly changing - Schumpeters view of the
    process of creative destruction -
  • invention autonomous vs. induced
  • innovation widespread adoption of inventions
  • product versus process change
  • The RD Process in manufacturing
  • patents as indicators of success at invention

36
2008 U.S. RD Sources of Funds
Source Statistical Abstract of the United States
2012
37
Historic Sources of RD U.S.
38
RD Objective Use of Funds 2008
Source Statistical Abstract of the United States
2012
39
Use of RD Funds U.S.
40
Composition of RD Effort 2008
Source Statistical Abstract of the United States
2012
41
Performance Sector, R D United States 1999
N.P 2.6
7
University 13.9
8.1
67.1
Source Statistical Abstract of the United
States, 2000
42
Performance Sector RD U.S. 2008
Source Statistical Abstract of the United States
2012
43
Washington RD by Users of Funds
Source NSF 2012 D data not disclosed NA
data not available for this year Indexed ranks
are against Gross State Product, which controls
size of state economies
44
Other Industries - 40.9 billion Source
Statistical Abstract of the United States, 1998
45
RD as a of Sales - 2008
46
Technical Knowledge
  • Spatial Concentration of RD activity Mobility
    and Availability of Technical Knowledge in Space
  • Regional Consequences of RD Effort
  • Research at the UW - Impacts on local
    industrial development

47
Data not Disclosed
Alabama in this group
48
Not Disclosed
AL in this group
49
1.19
2.84
50
D
0.27
51
1.34
1.10
52
.61
.52
53
(No Transcript)
54
(No Transcript)
About PowerShow.com