Some interesting comments on the concomitant decline of manufacturing and rise in inequality in London.
The transformation in the occupational structure of London (and other major cities) has been paralleled by changes in its earnings structure. The past 25 years have seen a major growth in high paid jobs, particularly in finance. As a result, the distribution of earnings has shifted sharply upwards. According to the New Earnings Survey, in 2002 average gross annual earnings for full time workers on adult rates in the UK as a whole was �24,500. In Greater London it was �34,760 and in the City of London it was a remarkable �59,000.Earlier this month Angry Bear was on a tear over housing prices in the "red states" (voting for Bush in 2000) versus in the "blue states" (voting for Gore in 2000), making the argument that liberal politics makes for higher housing prices, which for some reason is inherently good. The experience of London sheds a different light on the phenomenon.
Averages are just that, however, and in London in 2002 10 per cent of full-time workers earned less than �260 a week whereas 10 per cent earned more than �1,070 a week. In the City, the top 10 per cent earned more than �1,670 per week, or almost �87,000 a year. One consequence of the gains at the top end has been a sharp increase in inequality. The ratio of the top 10 per cent of earnings to the bottom 10 per cent has risen sharply since the 1970s. The rich are now much richer and London is a much more unequal city than 25 years ago. Dick Whittington was part right: the streets of London are paved with gold, but only for some.
Not surprisingly, the growth of the well paid professional and managerial middle class has had an impact on the housing market. The size of the owner occupied sector has grown rapidly in recent decades, and prices have risen dramatically. Land Registry data show average prices in London in the second quarter of 2003 were �246,000 but they varied between �642,000 in Kensington to �142,000 in Barking.So, sure, new middle class professionals voted Gore in 2000, as they voted Labour in 2001. Yet the story of the rise of this liberal class is hardly good news. It is contributing handsomely to the dramatic rise in inequality across all the industrialized countries, reflected in home ownership trends where this class dominates. This class is the one which keeps the Republican lock on the governor's office in Massachusetts despite it being a virtual one-party state (not a single Republican serves in Congress from MA), the same class which has nearly destroyed social democratic politics in its old bastion of Minnesota. As the new middle class has risen, the Twin Cities metropolitan region (Minneapolis--St. Paul) has grown richer, more suburban and more Republican. Neither MA nor MN -- signature "liberal" states if there is such a thing -- have had Democratic governors since the 1980s, even though both voted Gore in 2000.
Perhaps the biggest impact, however, has been on the growth of gentrification. Forty years ago most of inner London was white working class. Today, middle class home ownership has pushed steadily outwards into Islington, Hackney and the East End. What remains of the traditional working class has either moved out to the suburbs or become more concentrated in the council and social housing sector where unemployment and economic inactivity is high.
Let's not sing the praises of the latt� set too loudly.