Radical
Statistics
Employment in British cities
Ivan Turok
There has been no systematic analysis of employment trends in Britain's cities for a decade. Meanwhile, there have been significant changes in the structure of the UK economy and arrangements for local governance which may have made a difference to the performance of cities. Commentators have asserted that there has been a rediscovery of cities, based on the growth of business services, finance and consumer services, but with little supporting evidence. Moreover, many government policies towards the labour market, welfare reform and macro-economic management have overlooked the significance of geographical disparities in economic conditions. In a recent study for the Joseph Rowntree Foundation, a colleague and I examined the contours of urban economic change over the last two decades and the impact on the local population (Turok and Edge, 1999).
Research questions
The central questions addressed by the research were:
- What has happened to the scale and composition of employment in Britain's cities in the last decade? In particular, has the pattern of major job loss in the 1970s and 1980s abated?
- Do any sectors of the urban economy show signs of leading a revival? Which sectors have been worst effected by decline and decentralisation?
- How have people responded to the economic changes in cities? In particular, how effectively have the adjustment mechanisms of upward occupational mobility, out-migration and outward commuting offset any job losses?
- What are the implications of these changes for policy?
Methods
The focus was on the 20 British cities with a population of over 250,000 in 1991: eight 'conurbations' with over three-quarters of a million people and 12 'freestanding cities' with between a quarter and half a million population. Together they comprise two-fifths of Britain's population and jobs. The conurbations were West Midlands, Greater Manchester, West Yorkshire, Clydeside, South Yorkshire, Merseyside, Tyneside and Greater London. The freestanding cities were Bristol, Edinburgh, Stoke-on-Trent, Leicester, Wigan, Coventry, Sunderland, Doncaster, Cardiff, Nottingham, Hull and Plymouth. All other parts of Britain, including smaller cities, all towns and rural areas were grouped together in a broad category called 'towns and rural areas'. The two main data sources used were the Annual Employment Survey and the Census of Population.
Changes in urban employment
Figure 1 shows the most recent available data on urban employment, indexed to compare trends in different types of area. It shows a steady, continuing divergence between the major conurbations, freestanding cities and rest of Britain. Looking through the peaks and troughs of the general economic cycle, employment in the conurbations has continued to decline, while the long-term trend for the freestanding cities seems to be little change, or marginal contraction bearing in mind that sizeable losses occurred in the 1979-81 recession. Meanwhile, employment in other parts of Britain has continued to expand. The 20 major cities lost 500,000 jobs between 1981 and 1996, while the rest of the country has gained 1.7 million jobs.
Figure 1: Change in Employment by Type of Area, 1981-1996 (1981=100) - CLICK HERE
Source: Annual Employment Survey, via NOMIS
The period 1993-96 may have prompted some of the speculation about a recent revival of cities because of their expansion of employment. In fact, this is attributable to the upswing of the economic cycle and does not represent a reversal of previous trends. The cities' share of national employment actually fell during this period.
The most striking feature of employment in and around London is the sharp divergence between Greater London and the Rest of the South East (ROSE). Between 1981 and 1996 London lost 212,000 jobs while the ROSE gained 556,000. This reflected continuing deindustrialisation and a broader-based decentralisation of employment.
Sectoral trends
The urban-rural divergence in employment trends is apparent across all economic sectors, against suggestions of a revival attributable to the emergence of the 'knowledge economy', cultural industries and consumer services. Broad trends in the 1990s were little different from those in the 1980s, or indeed the 1970s and 1960s.
Manufacturing jobs have fallen everywhere, but most in the conurbations. Manufacturing is responsible for the bulk of the decline in urban employment. Private services have expanded everywhere, but least in the conurbations. The financial and business services sector has grown most in all areas, but least in the conurbations. Public services have also expanded, but at a more uniform rate across the country.
The decline in conurbation employment is attributable to factors such as the availability of land suitable for development rather than their industrial mix. The better-performing cities have invested in their physical infrastructure, made serviced land available for development, provided premises for expanding firms and inward investors, and replaced or modernised their older buildings.
Changes in occupation and employment status
The conurbations lost nearly a quarter of their 1981 stock of full-time male jobs by 1996, equivalent to over half a million (figure 2). Their modest growth in female part-time employment did little to offset the effect on household incomes of the loss of full-time male jobs. Meanwhile, there was considerable growth in part-time female employment in the towns and rural areas.
Figure 2: Change in Employment by Status (000s), 1981-96 - CLICK HERE
Source: Annual Employment Survey, via NOMIS
The changes in occupation have been just as significant. The conurbations and cities lost between a fifth and a sixth of their manual jobs between 1981 and 1991, far more than the towns and rural areas. They gained some professional and managerial jobs, but these are no substitute because upward mobility is low. The decline of skilled manual jobs has tended to result in downward movement for men into less-skilled, lower-paid jobs or unemployment and casual work.
The consequences for the population
The loss of urban jobs has led to out-migration, reduced economic participation and higher hidden unemployment among residents. The growth in employment outside the cities has led to in-migration, increased economic participation and lower unemployment. There has been much continuity in the direction and strength of these trends over the last two decades. This has reinforced the divergence in conditions between the cities and other areas.
This can be shown most effectively by constructing what are called 'labour market accounts' (table 1). About three-quarters of a million male jobs were lost in the cities between 1981 and 1991, equivalent to 12.2 per cent of the 1981 male workforce. Recorded male unemployment actually fell slightly because labour supply was reduced through out-migration and increased economic inactivity. Out-migration was socially-selective, favouring those in work and with non-manual jobs. Few city residents were able to respond to urban job loss by commuting elsewhere to work because of physical access difficulties or a simple shortage of jobs. The rise in economic inactivity impacted disproportionately on older male manual workers and disguised a reality of higher unemployment.
Table 1: Labour market accounts for Britain's cities, 1981-91
Source: Census of Population, 1981 and 1991 Note: 1 - as a % of the economically active men/women of working age in 1981
The situation for women was very different because employment expanded. Where the demand for labour rose quickest, there was strong growth in female economic participation, reflecting employers efforts to draw additional people into the workforce. There was also an increase in inward commuting.
Differences between cities
Merseyside's decline has been deeper and broader than any other city. Edinburgh and Cardiff have experienced the steadiest growth. The decline of manufacturing has had a big influence in most cities. Job creation in other sectors has not been an effective substitute in terms of quantity or quality. Although most cities have experienced falls in both labour supply and demand, the latter has fallen faster than the former, creating a jobs gap for men. This is highest in the conurbations of Clydeside, Merseyside and Greater Manchester.
The coincidence between cities with high job loss and high unemployment rates indicates the adjustment difficulties and relative immobility of displaced workers and their families. It also disproves the argument that high unemployment is attributable to welfare dependency and low incentives to work.
Employment expansion for women was greatest in cities such as Plymouth, Bristol, West Yorkshire and Cardiff, leading to increased female participation and inward commuting. Merseyside, Clydeside and Greater Manchester fared less well than the other cities and appear also to have relatively high real rates of female unemployment.
Conclusions and implications
There is a sizeable jobs gap in Britain's major cities, i.e. an increasing imbalance between labour supply and demand. Many policies misdiagnose urban unemployment as caused by inadequate skills and motivation, rather than a lack of jobs. National economic growth will not rectify the situation on its own. Nor will supply-side measures such as training, employment advice, improved work incentives and child-care, all encapsulated in the New Deal programme. Such measures are likely to have limited impact on the level of unemployment in a context of generally deficient labour demand, with growth confined to professional and managerial jobs.
Greater emphasis in national economic and social policy and urban regeneration needs to be given to expanding labour demand in the cities. The city-wide scale risks being subordinated between the current focus on neighbourhoods in addressing 'social exclusion' and the region-wide remit of the Regional Development Agencies. The urban jobs gap needs to be taken more seriously since it threatens the functioning of the national labour market, economic growth, welfare reform and social cohesion.
REFERENCE
Turok, I. and Edge, N. (1999), The Jobs Gap in Britain's Cities: Employment Loss and Labour Market Consequences, Bristol: The Policy Press
Professor Ivan Turok
Department of Urban Studies, University of Glasgow
25, Bute Gardens, Glasgow G12 8RS
Scotland. Tel: 0141 330 6274; Fax: 0141 330 4983
