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Report shows nearly half UK cities have low-wage and high-welfare economies

by on January 28, 2016

A new report by leading think tank Centre for Cities reveals that more than 980,000 new jobs were created in UK cities between 2010 and 2014 but that urban wages fell by five per cent in the same period – a decrease in average annual salary of £1,300 per city dweller in real terms.

It shows that despite the jobs boom between 2010-14 – with cities accounting for around three quarters of new jobs created in this period – nearly half of UK cities are currently classified as having ‘low-wage, high-welfare’ economies. These include places like Doncaster, Hull, Plymouth, Stoke and Sunderland.

However, the report also shows that 14 UK cities are already delivering ‘high-wage, low-welfare’ economies. These include Aberdeen, Chatham, Edinburgh, London and Milton Keynes.

Cities with high wages have also seen faster jobs growth – the number of jobs in high-wage places has risen by 10 per cent since 2010, compared to three per cent in low-wage cities.

The report highlights the need for all cities to focus on supporting high-skilled jobs in knowledge-intensive sectors – such as the digital and professional industries – and also boost jobs in other industries including retail, leisure and hospitality.

The report stressed that if the Government is serious about reducing welfare spending and enabling high-wage cities to continue to grow, it needs to urgently address the housing crisis.

There is a clear geographical divide across the country, with eight of the top 10 ‘high-wage, low-welfare’ cities located in the Greater South East, while nine of the bottom 10 cities for wages are in the North or Midlands.

The report argued that the Government should continue to increase investment in regional economies through initiatives like the Northern Powerhouse, while bolstering devolution deals by giving cities more control over local tax revenue, skills, infrastructure and housing.

Learn more about the research. 

 

Roger Milne

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