Sep 15, 2017 in Research


The United Kingdom has changed dramatically over the last thirty years in several ways. Being the capital of the United Kingdom, London is a classic example of a multi-cultural, unequal society producing corresponding benefits and flaws. The contemporary London labour market and housing market together shocking numbers in terms of inequality patterns. The wealth gap is growing from day to day, creating unequal earnings and ownership patterns. The working-age poverty and the housing costs are the critical factors explaining the vast inequality of the city of London. The last thirty years show the progression of the inequality patterns of London as compared to the rest of the United Kingdom. The major reason for the economic inequality of Londoners is the growing amount of unemployed working-age adults and low-income families. Both of the groups cannot afford a decent life in the city of London.

Changes in the labour market

Inequality in London over the last thirty years was predominantly dictated by its transformation patterns. According to Chris Hamnett, London's transformation started several decades before the beginning of the new millennium. This rapid transformation was primarily characterized by the shift from being an industrial city to a post-industrial one. Thirty years ago London was concentrated on manufacturing and had a large number of skilled and semi-skilled manual workers (Hamnett 2003). Nowadays, London is a city dominated by financial and business services employment. The work performed by the Londoners is predominantly of non-manual and is most often referred to the sphere of professional management. Nevertheless, the study conducted by the Trust of London and the New Policy Institute at the end of the 2011 provides shocking statistical data regarding the income rates of Londoners. The number of the unemployed population in London was above 400,000 in 2011, which can be viewed as the highest unemployment rate since 1996 (London's poverty profile 2011). Almost a million of Londoners are either facing unemployment or have an insufficient part-time job. Enemployed people are desperately looking for a full-time job to cover their basic living needs. Young Londoners are more qualified to be employed than the young population from other UK cities. Nevertheless, 25% of the young working age population of London is unemployed making the highest unemployment rate for more than twenty years. Up to 20% of all working experiences in London qualify for being low-paid jobs. Thus, a large amount of people do not obtain enough income to fit in the London Living Wage which is presently 8.55 per hour as announced by Boris Johnson at the end of 2012 (The Guardian 2012). High earners and high-income household hold over 40% of the income wealth being only one tenth of the overall population of London (London's poverty profile 2011).

Changes in the housing market

The income gap created by the labour market strongly affects the housing market, as well. Housing costs are the major factor for the development of poverty and the primary cause of inequality in London. It goes without saying that the house price depends of the London boroughs, nevertheless the average housing price in London is 445,651 (BBC News 2012). Almost quarter of a million households can be characterized as overcrowded accommodations (London's poverty profile 2011). Buying a house has become an unaffordable opportunity for those unemployed or part-time job representatives. The only perspective for such people is to rent a home. Nevertheless, rent rates are rapidly growing every year with no significant salary changes. An average London family has to jointly earn 52,000 to afford renting a two-bedroom home while the average income is ordinarily less than 35,000 (London's poverty profile 2011). People face financial problems not only with rent but also with the general household expenses. According to BBC News London, 55% of the interviewed population claimed that they experienced severe difficulties managing their household expenses (BBC News 2012). The inequality is especially visible since 90 percent of the population of London possess 60% of income wealth, 55% of property wealth and 35 % of financial wealth declared in London (London's poverty profile 2011). This indicates that the 10% of the richest population owns almost a half of the overall property in London and has on average wealth worth 933,563 (Doughty 2010).


The interviewee Simon T., an IT Operations Manager earning 60,000, who has lived in London since birth states that housing in particular is a burden in London with rental costs and mortgage costs skyrocketing over the last thirty years. Mr. T. also mentioned the influx of immigrants from eastern Europe and Muslim countries such as Pakistan. This issue is especially actual for borough of Tower Hamlets where he lives. According to Mr. T. 50% of the population of the borough of Tower Hamlets are immigrants claiming housing benefit and job seekers allowance to allow them to stay in the borough. According to Simon T., the salaries and contract market in London is buoyant. The interviewee supported the idea of the London inequality gap in terms of housing and jobs in the city itself and as compared to the rest of the United Kingdom.


Evidently, London has become more unequal over the last thirty years. The city has experienced dramatic changes in the spheres of labour and housing. The labour market has faced severe unemployment rates. This fact has subsequently affected the housing market and created unaffordable renting patterns for the majority of the population of London. The economic inequality of the city has resulted in the fact that London is divided into two groups: the richest group which is around 10% and the rest of the population that serves this group. London posses the concentration of the highest incomes in United Kingdom but also presents terrifying growing unemployment rates leading to the unequal life opportunities.

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