Magazine article Public Finance

Hung out to Dry?

Magazine article Public Finance

Hung out to Dry?

Article excerpt

THE GAP BETWEEN rich and poor is now greater within different social and ethnic groups than it is between them, the National Equality Panel report on inequality revealed last month. The rigorous evidence shows wide disparities from cradle to grave across the UK. Class shapes people's lives from the grades they achieve at school to the amount they earn and the age at which they die.

Responding to the NEP report, minister for women and equality Harriet Harman said that class now 'trumps' ability, race and gender as a driver of disadvantage. This echoes Communities Secretary John Denham's assertion a few weeks ago that race inequality can be addressed only by creating 'equality for all'.

But the debate on whether class or race drives disadvantage hides the real problem: a lack of political appetite or fresh policy responses to tackle the deep-seated causes of inequality. We would do well to start with a more honest debate about the future of the labour market and its implications.

The UK labour market has changed enormously over the past four decades. In workplaces ranging from manufacturing plants to offices, technological advances have replaced British workers in many unskilled and semi-skilled jobs. There are far fewer workers on production lines and hundreds of thousands of secretarial, clerical and administrative jobs have disappeared. Increasing international competition has led to the decline of industries that were once central drivers of economic growth in this country.

New jobs have not always emerged in the same places as old jobs were lost - creating a patchwork of deprived innercity areas, where 70% of people from ethnic minorities live.

The same trends are responsible for deprivation among the white working classes, a fact the British National Party has capitalised on. Low-skilled men have fared particularly badly in the shift to a service economy. For people who have grown up in traditional industrial or mining communities, a career in customer service might not present an attractive prospect.

The National Equality Panel found that in England's most deprived 10% of areas, an astounding 45% of working age adults are unemployed. While private firms gravitate towards the Southeast, many Northern regions rely on the public sector for jobs. Prospective job cuts in public services will only intensify the geography of inequality.

Over this period, UK industry has failed to generate sufficient numbers of semiskilled jobs in new industries to compensate for those lost, principally in manufacturing. Manual jobs lost in recent years have often been replaced with lowpaid, insecure jobs that rarely provide obvious routes to better-paid, high-status employment. The contrast with those who have ridden the wave of a burgeoning knowledge economy could not be more stark. Bosses now earn 98 times the average wage of their workers - a tenfold increase since 1979.

In the face of such changes, politicians across the spectrum have voiced concern about low aspirations among deprived groups and pledged to help improve individuals' ambitions and skills. The key to social mobility, they argue, is to give everyone the chance to better themselves.

But while such an approach is surely the hallmark of a fair society, Britain's economy looks set to remain reliant on low-skilled, low-wage employment. …

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