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High-income nations

The World Bank defines high-income nations as having a gross national income of at least $12,746 per capita. The OECD (Organization for Economic and Cooperative Development) countries make up a group of thirty-four nations whose governments work together to promote economic growth and sustainability. According to the World Bank (2014b), in 2013, the average gross national income (GNI) per capita , or the mean income of the people in a nation, found by dividing total GNI by the total population, of a high-income nation belonging to the OECD was $43,903 per capita and the total population was over one billion (1.045 billion); on average, 81 percent of the population in these nations was urban. Some of these countries include the United States, Germany, Canada, and the United Kingdom (World Bank 2014b).

High-income countries face two major issues: capital flight and deindustrialization. Capital flight refers to the movement (flight) of capital from one nation to another, as when General Motors automotive company closed U.S. factories in Michigan and opened factories in Mexico. Deindustrialization , a related issue, occurs as a consequence of capital flight, as no new companies open to replace jobs lost to foreign nations. As expected, global companies move their industrial processes to the places where they can get the most production with the least cost, including the building of infrastructure, training of workers, shipping of goods, and, of course, paying employee wages. This means that as emerging economies create their own industrial zones, global companies see the opportunity for existing infrastructure and much lower costs. Those opportunities lead to businesses closing the factories that provide jobs to the middle class within core nations and moving their industrial production to peripheral and semi-peripheral nations.

Capital flight, outsourcing, and jobs in the united states

A run-down auto parts building is shown here.
This dilapidated auto supply store in Detroit is a victim of auto industry outsourcing. (Photo courtesy of Bob Jagendorf/flickr)

Capital flight describes jobs and infrastructure moving from one nation to another. Look at the U.S. automobile industry. In the early twentieth century, the cars driven in the United States were made here, employing thousands of workers in Detroit and in the companies that produced everything that made building cars possible. However, once the fuel crisis of the 1970s hit and people in the United States increasingly looked to imported cars with better gas mileage, U.S. auto manufacturing began to decline. During the 2007–2009 recession, the U.S. government bailed out the three main auto companies, underscoring their vulnerability. At the same time, Japanese-owned Toyota and Honda and South Korean Kia maintained stable sales levels.

Capital flight also occurs when services (as opposed to manufacturing) are relocated. Chances are if you have called the tech support line for your cell phone or Internet provider, you’ve spoken to someone halfway across the globe. This professional might tell you her name is Susan or Joan, but her accent makes it clear that her real name might be Parvati or Indira. It might be the middle of the night in that country, yet these service providers pick up the line saying, “Good morning,” as though they are in the next town over. They know everything about your phone or your modem, often using a remote server to log in to your home computer to accomplish what is needed. These are the workers of the twenty-first century. They are not on factory floors or in traditional sweatshops; they are educated, speak at least two languages, and usually have significant technology skills. They are skilled workers, but they are paid a fraction of what similar workers are paid in the United States. For U.S. and multinational companies, the equation makes sense. India and other semi-peripheral countries have emerging infrastructures and education systems to fill their needs, without core nation costs.

As services are relocated, so are jobs. In the United States, unemployment is high. Many college-educated people are unable to find work, and those with only a high school diploma are in even worse shape. We have, as a country, outsourced ourselves out of jobs, and not just menial jobs, but white-collar work as well. But before we complain too bitterly, we must look at the culture of consumerism that we embrace. A flat screen television that might have cost $1,000 a few years ago is now $350. That cost savings has to come from somewhere. When consumers seek the lowest possible price, shop at big box stores for the biggest discount they can get, and generally ignore other factors in exchange for low cost, they are building the market for outsourcing. And as the demand is built, the market will ensure it is met, even at the expense of the people who wanted it in the first place.

Many people at workstations in a call center are shown here.
Is this international call center the wave of the future? (Photo courtesy of Vilma.com/flickr)

Questions & Answers

what is the difference between asocialist group on all definitions?
Koko Reply
what is the value of sociology
Banao Reply
What are the patterns of social interaction with regard to gender, religion and education
Norman Reply
define functionalist perspective
Jalil
what is cultural
nusrat Reply
culture is the way of life of a particular group of people
Philemon
culture is the backbone of society.
shahnam
culture consists of the beliefs' behaviour' objects' and other characteristics common to the members of particular group of society.
Zahid
culture is our way of life, customs ,traditions ,norms nd behavoiur
musharaf
can anyone explain what is socialogy as science in detail ?
Sydish Reply
sociology is a science because it adoptes and applies the scientific method . sociology does make a scientific method in the study of its subject matter.hence sociology is a science
Zahid
because its study the systematically about society
Akak
in secince we use tools such as thermometers telescopes microscope verniercliper etc similarly in sociology we tools interview questionare servey case study sampling etc so sociology is a science.
shahnam
scientific study of society is called sociology it involves scientific method, observation, hypothesis, experiments, and conclusions , this study produces theories and facts about society , that's why it is science
sohrab
explayn philosopher of socilogy
Mujahid
is caste system dangerous in politics? how
Zahid Reply
In present days the main caused for winning the election,after that they influence in any field
Akak
by those activities a father will become enemy to his son hence we should control it
Zahid
is it possible that marriage some places is being done between man's
Zahid Reply
No it is not possible.
umar_king
yeah itz hpns
musharaf
but in western some places it is possible as I considered a book there shows
Zahid
dear friends how then there born babies plz help me
Zahid
mee toooo
musharaf
dear friends I just know that there doesn't born babies
Zahid
they dont bother about thier offsprings nd it hpns in very rare cases in western societies
musharaf
ya right
Zahid
what is mean by ID
Bk Reply
what is counter culture
Jalil
what are the importance of social science on health care
Philemon Reply
the social sciences can contribute to preventing and treating illness by pinpointing the env.settings nd social relationships
musharaf
child poverty in social influences
Hash Reply
Often associated to food insecurity, children living below the poverty line are at an increased risk for becoming both malnourished and overweight. This can highly affect a child’s confidence. Moreover, evidence suggests that many of the effects of poverty on children are often added to by their fam
manisha
India is battling poverty for nearly 60 years now. And, with the help of new policies that strive to empower and spread awareness about the fundamental rights of children, along with participation and activities initiated by CRY – Child Rights and You, the children of India are sure to see a better
manisha
Does sociology have to deal with only interaction and society
Glory Reply
no
Illiasu
no it touches every aspect of social system...
Gh
hmm. :-)
manisha
it deals with society also but as whole....
Gh
tells about drawbacks and government plans..and makes us focus on what can be done for improvement. like for. eg. in agricultural practices what farmers need to do for better crops.
manisha
yeh absolutely
Gh
according to Emile Durkheim sociology is study of social institutions also.....
Gh
and financial institutions also like commercial banks
manisha
hmm also study about market as a social institution....
Gh
world topics like globalisation modernization and different movements. government plans.
manisha
socilogy also study process such as..... sanskritisatoion ,westernization and modernization also
Gh
yes
MRM
YES
Anas
yeah
gerardo
how we will define status and role?
Saqib
maybe
gerardo
what are the effects of sociology to education
Ndubuisi
what is culture integration
Tariq Reply
define socialization
Ndubuisi
Socialization iz a process of learning.
Dr
Education for effective citizens and civic responsibility discuss
Ndubuisi
Thank you Dr Muzammil
Ndubuisi
nature of social work , please
Shabir Reply
what is an institution? with examples please
Mriganka Reply
what 8 sociocultural practices which are harmful to woman specific in Tanzania
GREEBY Reply

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Source:  OpenStax, Introduction to sociology 2e. OpenStax CNX. Jan 20, 2016 Download for free at http://legacy.cnx.org/content/col11762/1.6
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