WHAT ABOUT THE WORKERS?
THE SOCIO-ECONOMIC ANATOMY OF CONTEMPORARY BRITAIN

Britain is an economically successful country. Its long-term rate of GDP growth equates to most other developed countries. At the aggregate level, it also features amongst the richer countries with an average Gross Domestic Product per head of $31,800 in 2006. This lines up alongside most Northern European and Scandinavian countries and is only significantly behind the United States and in Europe, Luxembourg.

Massive growth in the financial services sector, based mainly in London, and in other services, has masked a marked decline in technology and manufacturing, historically major sources of skilled and semi-skilled employment. As a result of the decline in manufacturing and technology, the UK now has a permanent and growing Balance of Payments deficit.

Our leaders often take comfort in the fact that Britain is the 4^th (or 7^th, depending on how it is measured) largest economy in the world, a centre of world finance and legal services, and an attractive location for inward investment and immigration. They can point to an improving health service, and an education system, which at its best, rivals anything in the world. Serious crime and public disorder are lowish by world standards and we can congratulate ourselves on adapting to a multi-cultural society without 'rivers of blood'.

British arts, culture and media are world class, and the national take-up of new technologies such as digital and satellite TV, mobile telephony, personal computing and home video are all relatively high.

Britain is also an international air transport hub, with worldwide access to and from London and many other airports. Additionally, the country is culturally open, receiving people, ideas and fashions from the outside world easily.

This relatively benign picture provides a cheerful front cover for Britain, especially when multiplied by a varied and beautiful geography, and a wide range of cultural variety. Those in a position to participate fully in all that Britain has to offer can congratulate themselves on living in a 'good' country. For them, even the climate creates relatively low risks of drought, freezing to death, heat exhaustion, skin cancer and exposure to dangerous fauna and flora!

But behind the aggregated numbers and headlines lies a very different range of stories. The UK contains a vast range of differences and extremes.

Still Two Nations

1. Life at the top

   Britain is a wealthy country and growing more so. The last twenty years or more have seen a massive increase in the gross and relative wealth of those in the top 60% socio-economic groups.
   People in these brackets have experienced substantial increases in financial wealth and also in the range of levers they can grasp and pull with this growing wealth.
   Despite noises by some politicians and the media, taxation is relatively low in international terms, and those with the wherewithal can access excellent education for their children either through private education or the best state schools.
   A mix of private insurance and improving public health provision ensures access to excellent medical facilities.
   For upper-middle and upper income citizens, especially those already on the ladder, good housing has been relatively easy to access, with the prospect of a second house in a cheaper location, such as the Dordogne.
   There is a huge range of consumer goods available, from luxury foods to summer holidays in exotic locations and ski resorts in winter.
   Recent immigration from 'New Europe' has been a boon to the wealthy, providing ample supplies of labour for services and domestic help and support.
   All of this good life can be played out in the context of relative safety from crime and murder, in a polity that offers considerable freedom to individuals, despite recent increases in the threat of terrorism. Richer citizens can, and do, insulate themselves from the effects of crime and hooliganism by isolating themselves physically - the incidence of gated communities and affluent neighbourhoods separated from poorer strands of society has grown rapidly. Of course, there are threats to this pleasant equilibrium. The state of the global economy, the threats from financial instability and bubble economics; the growing perception of danger from domestic crime and terrorism make some feel distinctly insecure. But, by and large, those in the upper reaches of society can look out from their workplaces and neighbourhoods and feel relatively satisfied with the current state of affairs, secure in the knowledge that governments of any colour are likely to be desperate to seek their support by pleasing them.

2. The view from below

   The world of those in the lower echelons of the socio-economic scale is very different to that of their wealthier fellow-citizens.
   For many, the world of the rich is a very distant place - literally, as the physical segregation of rich and poor is increasing, and 'mixed' neighbourhoods becoming scarcer. To quote Danny Dorling, professor of human geography at Sheffield University: "We have been sleepwalking into segregation by race, but towards even greater segregation by wealth and poverty".
   The gap between rich and poorer is actually widening in Britain, despite some attempts by government to narrow it. Social mobility, the ability of people to rise in the socio-economic scale through their legitimate economic or educational efforts, is actually decreasing. In this regard, the UK is unique - even in the United States, social mobility is at least static.
   So, many people live in sinks of relative or absolute deprivation. In many of these places rates of petty crime and hooliganism are relatively high, the physical fabric of many estates has been deteriorating for decades, public health provision is less effective, leading to high incidences of stroke and heart attacks. Building programmes aimed at increasing the stock of quality affordable housing are currently (2007) at an all-time low.
   Local council building, once a staple provider of social housing, is nil and the slack has not been anywhere near picked up by housing associations and, in particular, private sector builders.
   Poor education and diet, abuse of drugs, alcohol and smoking leads to obesity and further health problems, and life expectancy amongst less priveleged sections of the population is far lower than the rich - for example, male life expectancy in parts of Glasgow is less than 60 years, about the same as Moscow after the fall of the Soviet system and the disintegration of state social provisions. This figure compares with a national average of about 78 years.
   Education is tending to become increasingly segregated, with, in addition to private provision, growing competition for access to the better state schools by parents able to practice 'postcode privelege', thus raising housing prices far beyond the reach of below-average earners. Whatever the reader's beliefs, the growth of faith schools is another force fostering segregation.
   Despite the minimum wage, the growth of employment in the economy has increasingly been in lower skill, lower wage jobs in the service sectors. Many are having to take more than one job to get by. Relative poverty has two dimensions - low income and low wealth. In Britain, the two tend to elide - for example, 70% of lowest income families have no savings at all.
   Whilst their economic and social conditions have not improved at anything like the rate of the better-off, the less wealthy have been subjected to a media bombardment exhorting people to be fashionable and trendy, to aspire to a 'celebrity' lifestyle and to 'have it all, now'.
   Huge inducements have been offered by an almost unregulated financial services sector aimed at encouraging people to borrow now and pay later for housing, consumer goods, fashionable holidays and lifestyle accessories. This has led to rapidly increasing levels of consumer debt, much of it taken up by those who are least able to compute the longer term consequences of their actions. From time to time, financial collapses, scams and overexposure to debt hurt the poorest members of society most. Research by the Financial Services Agency indicated that about 30% of the population was unable to cope with even relatively simple numerical problems, like percentages and APR rates.
   Of course, the picture is not all gloom and misery - many people living in relative poverty are quite content, they have a good life with their peers, regarding the domain of the rich as another world. Membership of clubs and societies is quite high, and levels of association with special interest groups like football clubs and supporters groups has grown.

On a wider canvas, there is widespread suspicion and distrust of those in political, financial and business leadership. Participation in the political process has declined significantly, indicated vividly by voting patterns, which are low overall, but lowest for the more deprived members of society. The popular press is also widely distrusted and only such professionals as doctors, the military and the clergy elicit much esteem.
If this sounds an excessively grim picture, remember that this is not the experience of the wealthier 60%, who are insulated from life at the bottom - but who also share a pervasive distrust of the institutions of authority.

NOTEWORTHY FACTS

, from the EurLIFE survey, 2003

Equality/inequality of Income distribution

GINI Index: 0= perfect equality 100 = perfect inequality (one person owns all the wealth)

In Europe, only Greece has more unequal income distribution than Britain. The US stands out as having the highest level of inequality in the developed world

Poverty - % of population living in households with less than 60% of the national median income

Wealth inequality

Inequality of income also spawns wealth inequality. For example, in 2001, 28% of poorer households, 70% of single parents and nearly 50% of poor people had no savings. And the number of households with no assets is rapidly increasing.

Upper secondary education attainment aged 25 to 64: %

Access to higher education: % from unskilled and professional households

Trust in other people generally

10=very high, 0=very low

Trust in democratic representatives; %

Voting in last Parliamentary election, %

The UK had the lowest voter turnout in Europe

Trade Union Membership, % working population

Trade unions in Nordic countries participate with government, management and industry bodies in the formulation and implementation of national economic and employment policy

Immigration and emigration, 2005

Human development Index

In the UN Human Development Index, which measures how effectively countries convert their wealth into educational, health and life expectancy outcomes, the UK comes 18^th, trailing behind the US, Japan and most of Europe.

Index of Economic Freedom

The UK comes high at 6^th after Hong Kong, Singapore and the USA in the Index of Economic Freedom, prepared by the (US) Heritage Foundation, a neo-liberal free-market institution.

Relative wealth and poverty

• Since 1970, area rates of poverty and wealth in Britain have changed significantly. Britain is moving back towards levels of inequality in wealth and poverty last seen more than 40 years ago.
• Over the last 15 years, more households have become poor, but fewer are very poor. Even though there was less extreme poverty, the overall number of 'breadline poor' households increased - households where people live below the standard poverty line. This number has consistently been above 17 per cent, peaking at 27 per cent in 2001.
• Already-wealthy areas have tended to become disproportionately wealthier. There is evidence of increasing polarisation, where rich and poor now live further apart. In areas of some cities over half of all households are now breadline poor.
• There has been slower change in wealth patterns overall. The national percentage of 'asset wealthy' households fell slightly in the early 1990s but rose dramatically between 1999 and 2003 - 23 per cent of households are now wealthy in terms of housing assets.
• The general pattern is of increases in social equality during the 1970s, followed by rising inequality in the 1980s and 1990s.
• Urban clustering of poverty has increased, while wealthy households have concentrated in the outskirts and surrounds of major cities, especially those classified as 'exclusive wealthy', which have been steadily concentrating around London.
• Both poor and wealthy households have become more and more geographically segregated from the rest of society. 'Average' households (neither poor nor wealthy) have been diminishing in number and gradually disappearing from London and the south east.

Source: Joseph Rowntree Foundation

Synthesis

From the late 1970's, Britain experienced a socio-economic revolution, begun under Margaret Thatcher, and continued by New Labour. In the beginning, it was called monetarism, but it rapidly evolved into a deep faith in the free market and rejection of the state as having a role in controlling the operation of free market forces.

The UK is now praised by such institutions as the US Heritage Foundation for its economic freedom, which neo-liberal free-market theory claims is the basis for a successful economy. Are they correct?

The results of this massive socio-economic experiment, which has run for nearly 30 years, are extremely mixed - the British economy has grown in this time, but no more rapidly than those of the Netherlands and the Nordic countries, which have a markedly different social market version of capitalism.

Nor does the UK outstrip these countries in creating full employment, new business starts, investment in modern technology or R&D spend.

But the most telling results are in relation to inequality. The Nordic countries have far lower levels of income and wealth, educational and health inequalities than Britain.

The top 60% of the UK population have experienced considerable advances in their income and wealth. The poorer minority have found life much harder - their incomes and access to the health, education and employment systems have diminished and are still doing so. Social mobility is now rapidly declining and economic inequality is the highest in Europe.

Economically, the UK has seen a considerable growth in banking and financial services, but has failed dramatically to keep up with the developed world in technology and scientific knowledge-based industries.

Most of the job growth in the last 20 years has been in lower skilled, lower-paid service occupations. Many families now need two job-holders to support an average lifestyle.

In summary, the advances gained by introducing a free-market economy have been enjoyed by a diminishing majority of rich people, and particularly by an elite minority of the super-rich, but have left the now-permanent 30% of poorer people trailing ever further behind.

If a 'good' society is one which bestows the fruits of its economic success on all its citizens, Britain is failing by comparison with the Nordic countries and many others.