Classification of Economies (Edexcel A Level Geography)

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

 

The location of Middlesbrough and Reading

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

Economic Sector	Characteristics
Primary	Collection of raw materials (mining) and producing good crops (farming) Mainly located in rural areas Tends to be low-paid, manual work
Secondary	Manufacturing of raw materials into a finished product (car manufacturer) More regular income than the more seasonal primary jobs More secondary employment is located in northern cities - Sheffield, Middlesbrough These sectors have declined over time
Tertiary	Providing a service (education, sales) Private (retail ) or public sector (government department) Concentrated in urban areas Wages vary from cleaners on minimum wage to highly paid professionals like doctors
Quaternary 8.5	Providing specialist services in finance, law, hi-tech industries, and research and development Requires a highly educated workforce Mainly located in London and the South East The fastest-growing sector in the UK

• 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 Clark-Fisher Model

• 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

• 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) 

Pay and education	People employed as:	Reading (%)	Middlesbrough (%)
Highly paid and highly educated Low pay and low education levels	Management	8.8	6.4
	Professional (e.g. lawyers, doctors)	28.9	16.4
	Professional and technical	20.2	12.1
	Administrative	8.3	8.6
	Skilled trades	8.8	7.5
	Caring, leisure and other services	5.9	13.8
	Sales and customer services	5.7	8.7
	Process plant and machine operators	3.3	11.3
	Manual work	9.9	14.6

• 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

Economic activity for 16-64 year-olds (2020)

• 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

• 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