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25 Mar 2015

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While politicians and commentators continue to focus attention on the growth rate and Britain’s position in league tables of GDP per head, the historical evidence shows that changes in the country’s economic wellbeing over the last 50 years owe more to de-industrialisation than variations in the growth rate. That is the conclusion of research by Professor Jim Tomlinson to be presented at the Economic History Society’s 2015 annual conference.

His study notes that the radical changes in employment patterns brought about by de-industrialisation are a key part of the explanation for the widely noted increase in income inequality since the 1980s: many of these jobs are also highly insecure, creating a large ‘precariat’ at the bottom-end of the labour market. But de-industrialisation also helps to explain two other important but less-noted features of recent British history:

  • First, the enormous growth in ‘in-work’ benefits, such as working family tax credits and housing benefit, paid to supplement the wages of those in low paid employment.
  • Second, the growth of publicly funded employment, which was such a striking feature of the years between the 1970s and 2008. Periodic cuts in the numbers directly employed in the public sector disguise the fact that the numbers funded by the public sector have been estimated to have risen from 5.6 million in 1978 to 8 million in 2008.

Professor Tomlinson comments:

‘De-industrialisation has in many ways been as significant a process as the transition from an agricultural to an industrial economy in the eighteenth and nineteenth centuries.

‘Its impact on employment and economic wellbeing in Britain has been so rapid and dramatic in scale compared with other industrial countries.’

It is well known that variations in average GDP per head levels among rich counties tell us little about their relative economic wellbeing. Most strikingly, the high level of GDP per head in the United States goes along with a relatively poor performance (for a rich country) on a whole range of social indicators, from educational attainment, infant mortality and life expectancy, to obesity.

In this context, laments about Britain’s long-term ‘decline’ measured by a slow fall down the GDP per head league table, or boasts about our short-run growth rate exceeding that of other countries, are seriously misplaced.

In contrast, de-industrialisation has shaped a range of crucial changes in economic wellbeing since the mid-1950s, when Britain’s industrial employment peaked. It has destroyed a vast number of jobs available to relatively poorly educated workers who nevertheless often had significant ‘job-specific’ skills.

While the jobs that have replaced this old industrial work are in part more highly skilled, offering prosperous employment to the educated, large numbers of them are low-skilled and low-waged.

For example, the fastest growing sector of employment since the end of the 1970s has been ‘care assistants and attendants’ whose numbers have grown more than five-fold to well over half a million. There have been large if not so spectacular increases in the number of job in a range of other personal service and retail sectors.


Professor Jim Tomlinson
University of Glasgow

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