The latest instalment of our series, in which we use the Centre for Cities’ data tools to crunch some of the numbers on Britain’s cities.
Why, one may wonder, is everyone in Britain so angry? In 2016, against the advice of experts and the confident expectations of almost everybody, a slim majority of Britons voted to leave the European Union, in a move widely interpreted as a sign of quite how miffed the voters had become.
Ten months later, Theresa May called an election in the hope of capitalising on this anger, apparently forgetting that she was now Prime Minister so people were probably angry with her too, and promptly lost her majority. Despite the apparent return of two party politics after several decades’ absence, there’s an overwhelming sense abroad that most British voters don’t think very much of any of them.
The stream of books and columns purporting to explain this anger has been flowing for some time, and doesn’t soon seem likely to stop. But there are times, when trawling through the Centre for Cities’ economic data, that I’ve wondered if the explanation might actually be rather straightforward.
Below is a chart showing how average real wages – that is, those adjusted for inflation; their actual value, rather than their number – changed in Britain’s biggest cities the decade to 2017. This is a period that covered the financial crash and austerity, so you’d expect the results to not be brilliant.
Nonetheless, it’s still quite staggering to realise quite how tough on the wallet this last decade has been. Of the 63 cities shown, just 15 – less than a quarter – have seen real wages rise in the last 10 years. Just as many have seen wages fall by more than 6 per cent. In three, the fall is over 15. (The national average in this time, incidentally, was a fall of 2.8 per cent.)
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What’s more, the numbers shown on this chart don’t really match the patterns of economic geography I’ve grown to know and love. Those where wages have risen include Belfast, Glasgow and the three north eastern cities of Newcastle, Sunderland and Middlesbrough: not places one associates with booms. At the other end of the scale, in several cities I tend to think of as prosperous – Edinburgh, Warrington, London – wages have still not returned to where they stood in 2007.
All this seemed so weird that I wondered whether it might be a function of starting in 2007 – so I looked at the same data from several other starting points. By and large, though, this pattern still holds.
Start the clock earlier, and you’ll find that in slightly more than half of British cities (35 out of 63), wages are still lower than they were in 2004. The national average since then: a fall of 1.9 per cent.
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Or start in 2010, the year the Conservatives returned to power and embarked upon austerity. Since then, real wages have fallen by an average of 1.3 per cent. In 40 out of 63 cities, they were lower in 2017 than they’d been in 2010.
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At risk of undermining my own narrative, things have got better recently. This is the same chart, for the period from 2015 to 2017. Suddenly, things are much sunnier: the national average is a rise of 6.2 per cent, and there are only nine cities where wages haven’t risen.
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So perhaps things are getting better – or at least, perhaps they were. Whether that will continue after Brexit – a move every economist on earth except Patrick Minford believes will hamper the British economy’s growth potential – remains to be seen.
These are only averages, of course: in some cities, they may be influenced by big shifts in specific professions (the fall in pay in London’s financial sector, for example). And a significant minority of the population doesn’t live in any of these cities.
Nonetheless: the reasons why, by 2016, so many voters were so angry with their political leaders suddenly seem rather obvious.
Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.
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