Classification of Economies (Edexcel A Level Geography)

Economic Sectors

How and why places vary

• A place is shaped by:

  • The physical nature of the place 

  • What its residents do for a living

  • Connections:

• Internal - people, employment, housing, services

• External - government policies, globalisation

• Changes:

  • Locally e.g. counter-urbanisation

  • Nationally e.g. government policies

  • Globally e.g. climate change, pandemics

• The nature of a place affects the type of work on offer and therefore the type of employee required e.g.
  

  • The town of Reading, due to its proximity to London, has a lot of professional people living there 

  • The industrial town of Middlesbrough, located in North East England, has more manual workers living there

     

Classifying economic sectors

• Economic activity and job type vary from place to place within the UK

• The structure of the local economy can affect the characteristics of a place e.g.

  • The income of the locals

  • The lifestyle of individuals and communities

  • The perception of a place

The Four Economic Sectors

• A place’s main economic industrial sector is likely to change over time.

• These changes are depicted in the Clark-Fisher Model

  • Pre-industrial - The majority of the population works in the primary sector with only a small percentage of people employed in the secondary sector

  • Industrial - The proportion of employees in the primary sector declines due to the mechanisation of farming, and as land is taken up by manufacturing, the secondary employment increases

  • Post-industrial -  There is a decrease in amount of secondary jobs due to the movement of factories overseas and cheaper imports; this coincides with an increase in employment in the tertiary and quaternary industries due to higher incomes and more demand for holidays, technology etc

• The UK has followed the expected trends in the model:

  • A decline in the primary and secondary sectors due to deindustrialisation - employing just 1% of the workforce in primary, and 15% in secondary

  • A huge growth in the tertiary and quaternary sector, known as the new economy - employing around 84% of the population

Employment type

• Jobs can be classified on whether they are:

  • Full-time (35+ hours per week) or part-time (less than 35 hours per week)

  • Temporary or permanent

  • Employed or self-employed

• A place can be defined by the nature of economic activity and people's employment:

  • A less successful place can have a large amount of economically inactive people (retired, unemployed, long-term sickness or disability) 

  • A place with low levels of economic growth can have a large proportion of people on temporary, part-time or 'zero hours' contracts, who earn little

  • A rural place can have lots of seasonal work (farming, tourism)

  • A place with a higher percentage of self-employed people, who identify gaps in the local market and meet the needs of the area, can have a greater sense of community

Economic Activity & Social Factors

• Places vary according to their economic activity 

• The economic activity is analysed using employment data and economic output data e.g.Gross Domestic Product (GDP), Gross Value Added(GVA)

Employment Data for Reading and Middlesbrough (2020) 

• From the data:

  • Reading has:

    • Nearly double the number of professionals than Middlesbrough

    • Far fewer people working in manual work

    • Fewer of the population are: 

      • Process plant and machine operators

      • Carers and leisure workers

• The GVA is almost three times greater in Reading (£48,377 per person) compared to £16,856 in Middlesbrough

• This evidence suggests that Reading is more economically successful than Middlesbrough

• Differences in economic activity can be measured by variations in social characteristics:

• Health - those with the lowest income have the poorest quality of health

• Life expectancy - it can be 5 years longer for people in management compared to manual workers

• Levels of education - children from lower-income families are more likely to underachieve at school and have fewer qualifications. This often results in them having lower-income jobs

• The differences in economic activity vary due to education and pay:

  • Almost double the amount of adults had no educational qualifications in Middlesbrough (15.4%) compared to Reading (8.2%)

  • Over double the amount of adults had a university qualification in Reading (43%) compared to Middlesbrough (19%)

  • The average hourly pay for a male worker in Middlesbrough was £13.13 and a full-time female worker earned £509 per week, compared to Reading, which was £16.73 and £621 respectively

Inequalities in Pay & Quality of Life

• Quality-of-life indices reflect the inequalities in pay levels across economic sectors 

  • Families with a low income rank as having a lower quality of life than richer families

Income inequality

• Inequalities in pay levels are linked to differences in the type of employment

  • The use of food banks has increased by 50% over the last 4 years, as people on casual contracts struggle with the rising cost of living

  • Managers and professionals are more highly paid than manual workers

  • Low-level tertiary workers will get lower pay than more skilled workers, who have more qualifications

  • Jobs may be seasonal and insecure compared with manufacturing and higher-level service

  • The top ten percent of workers earned around £62,583 a year (2022)

  • The bottom ten percent of full-time workers earned an average of £19,403 a year (2002)

  • Around 3% of the population is on zero-hour contracts, which can increase the chance of going into debt

• There are huge differences in income and cost of living, both locally and nationally

  • London and the South East are more expensive to live in than the rest of the UK

  • Jobs offers in London often have the ‘London allowance’ to help make up for the higher prices of goods and service

Quality of life indices

• Quality of life closely correlates with income levels as many of the things that contribute to quality of life have to be paid for:

  • Goods - house, furniture, food, electrical items

  • Services - transport, leisure, utilities

  • In 2016, the uSwitch Quality of Live Index ranked Berkshire (Reading) 6th out of the 138 UK regions, with South Teesside (Middlesbrough) ranked 129th