Employment and Earnings

Princeton University Press
Chapter Title: Employment and Earnings
Book Title: The Global City
Book Subtitle: New York, London, Tokyo
Book Author(s): Saskia Sassen
Published by: Princeton University Press. (1991)
Stable URL: https://www.jstor.org/stable/j.ctt2jc93q.15
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Eight
Employment and Earnings
THE ADMITTEDLY PROVOCATIVE inquiry set out for Part Three of the
book begins, in this chapter, with a straightforward description of the
overall economic base of each of these cities. The focus is particularly on
the employment and earnings distribution in each city and how they
compare with that of the corresponding country. It completes the picture
introduced in the preceding chapters, focused largely on the leading sec­
tors of the economy—finance and producer services—with some detail
on the place of manufacturing and services in these cities. This chapter
seeks to establish whether the occupational and income distribution of
the city’s resident work force reflects the existence of a thriving highprofit economic core.
This is very much an analysis of the official data on employment and
an analysis anchored in the formal labor market. The next chapter ad­
dresses the more difficult question of what the official data may not be
counting or activities not encompassed by the formal labor market.
Three Cities, One Tale?
All three cities have experienced changes in their industry and occupa­
tional structure over the last two decades. Alongside the growth in the
producer services and finance, discussed in Chapter Six, there were pro­
nounced losses during the 1970s in overall job levels in New York and
London and in manufacturing in all three cities. Both New York and To­
kyo had severe fiscal crises in the mid-1970s, which forced their govern­
ments to take strict measures, notably cuts in government jobs and ser­
vices. In London the fiscal crisis assumed the form of a more protracted
shrinkage in government jobs and services. Let me illustrate with a few
figures, to be developed in greater detail below.
Table 8.1 shows employment levels in New York, London, and Tokyo
for 1977, 1981, and 1985; Table 8.2 shows the manufacturing and service
shares for those years. The aggregate data for New York City from 1970
to 1980 show a decline in the absolute level of employment, from 3.7
million to 3 million; a 35% loss in manufacturing jobs; a 41% loss of head­
quarters’ office jobs; a 15% overall decline in office jobs; and the depar-
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198
THE SOCIAL ORDER
TABLE 8.1
New York, London, and Tokyo: Population and Employment, 1977-1985
1977
New York
Population (N)
Employment (N)
Employment as % of population
London
Population (N)
Employment (N)
Employment as % of population
Tokyo
Population (N)
Employment (N)
Employment as % of population
1981
1985
(5,618,000)
(5,564,000)
(3,056,000)
54.4%
(3,098,000)
(5,748,000)
(3,225,000)
55.7%
56%
(7,012,000)
(6,806,000)
(6,767,500)
(3,652,600)
(3,564,800)
52.1%
52.4%
(3,476,000)
51.4%
(1975)
(1980)
(11,663,000)
(11,655,000)
(11,828,000)
(5,620,000)
48.2%
(5,672,000)
(5,910,000)
50.0%
48.7%
Sources: Employment Review, (New York State) 40, no. 5 (May 1987); Employment Gazette, (U.K.)
95, no. 10, historical supp. no. 2 (Oct. 1987); U.K. Central Statistical Office, Regional Trends, 1981 and
1987; id., Annual Abstract of Statistics, 1985; Japan Statistical Yearbook 1986.
ture of a significant number of corporate headquarters. To this should be
added the decay in much of the city’s infrastructure and a severe fiscal
crisis in 1975-1976.
Employment in London also fell, from 4.3 million in 1961 to 3.5 mil­
lion in 1985. There was a tenfold increase in unemployment from 40,000
in the mid-1960s to 400,000 in 1985, a figure that would rise if we in­
cluded unregistered unemployment. Much of this unemployment was
due to large cuts in public sector jobs, beginning in the late 1970s. And,
as in New York City, there has been a significant decline in manufactur­
ing jobs, from 1.4 million in 1961 to 1 million in 1971 and 572,000 in
1985, less than a fifth of all jobs.
Employment in Tokyo remained fairly constant in the decade of the
1970s and rose from 5.6 million in 1977 to 5.9 million in 1985. Though
absolute losses were on a much smaller scale than in London and New
York, the share of manufacturing employment also fell in Tokyo, from
30% in 1970 to 25% in 1975 and 22% in 1985. The actual components of
this decline, however, are somewhat different from those in New York
and London. Besides the decline of the old traditional manufacturing dis­
tricts, there was a government-directed dispersal of highly polluting fac­
tories, notably chemical plants. Perhaps less known is the fact that To­
kyo’s deficit reached 101 billion yen in the mid-1970s, a record high for
the Tokyo Metropolitan Government. In 1979, Tokyo’s governor set up a
committee to address and work out the financial crisis.1
1
The ratio of current expenses to total revenues had been increasing for many years and
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199
EMPLOYMENT AND EARNINGS
TABLE 8.2
New York, London, and Tokyo: Distribution of Employment
in Manufacturing and Service Industries, 1970s and 1980s
(percent of total employment)
New York
1977
1981
1985
Manufacturing
Tertiary industry
Wholesale/retail
FIRE
Services
21.9
63.7
19.4
15.9
28.4
18.7
68.6
20.2
16.6
31.8
15.4
73.8
20.2
17.3
36.3
London
1977
1981
1985
Manufacturing
Tertiary industry
Wholesale/retail
FIRE
Services
22.0
73.0
13.5
9.9
49.6
19.2
75.2
19.2
15.9
40.1
16.0
78.5
20.5
18.2
39.8
Tokyo
1975
1980
1985
Manufacturing
Tertiary industry
Wholesale/retail
FIRE
Services
25.1
54.5
27.5
6.4
20.6
23.5
57.2
28.5
6.0
22.7
22.0
59.8
28.4
6.1
25.3
Sources: County Business Patterns, issues for New York,
1977,1981, and 1985; Greater London Council, Labour
Market Report, Spring 1987; id., London LabourMarket
Review, 1980/1981, (1981); Tokyo Metropolitan Govt, Plain
TaIkAbout Tokyo, (1984); 1980 Population Census of Japan;
Japan Statistical Yearbook, 1986.
Note: Percentages do not total 100 because the following
industries are excluded: agriculture, forestry, mining,
construction, electricity, gas, water and heat supply,
transport and communication, and government.
It is against this background of fiscal crisis and government job cuts in
all three cities in addition to absolute employment declines in New York
and London that we need to place the high growth rates in select indus­
tries discussed in the preceding chapter. An examination of the overall
economic base in these cities shows a pattern of pronounced declines and
had already reached deficit levels in 1975. After the severe deficit of 1978, Tokyo’s govern­
ment set up a commission, whose recommendations led to the implementation of a plan for
financial rehabilitation by bringing down expenses to 90% of revenues by the end of 1982.
The recommendations were as follows: (1) reductions in staffing ceilings of the Tokyo Met­
ropolitan Government and revision of the wage scale; (2) review of projects of the Tokyo
Metropolitan Government and promotion of reasonable cost-sharing by the beneficiaries;
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200
THE SOCIAL ORDER
equally pronounced growth, especially in the case of New York and Lon­
don and to a lesser extent in Tokyo.
New York
Several major facts dominate the economic history of New York City
since 1960. First, there was a massive decline in manufacturing, with a
loss of over half a million jobs. Second, there was a massive loss of head­
quarters and hence of office jobs. Third, there was a rapidly deteriorating
fiscal situation, culminating in an officially declared crisis in 1975-1976.
Fourth, amidst the overall decline in the period after the fiscal crisis,
there was rapid growth of finance and producer services, concentrated in
Manhattan, beginning in 1977, and accelerating in the early 1980s.
New York City’s employment was stable at about 3.5 million in 1950
and 1960, increasing to 3.8 million in the late 1960s. After 1969, there
was a relentless decline, with overall employment reaching its lowest
level in 1977, after the fiscal crisis, at 3 million (including government
jobs). Since then two major trends are evident. One is the continuing
decline of manufacturing, notwithstanding small increases in particular
branches and periods. The other is the rapid growth in the producer ser­
vices, which accelerated at the turn of the decade and into the 1980s. By
1987 employment stood at 3.6 million, a significant recovery based on
producer services growth. But New York’s was clearly a transformed
economy, with a severely reduced manufacturing sector, a thriving fi­
nance and producer services complex, and 0.2 million fewer jobs than at
its peak in 1969.
Manufacturing accounted for 1 million jobs in 1950, 0.9 million in
1960, 0.8 million in 1970, half a million in 1980, and 387,000 in 1987.
Between 1969 and 1987, New York City lost half of its manufacturing jobs
and more than half of its office jobs in manufacturing headquarters. It
(3) reasonable sharing of administrative responsibilities and fiscal burden between the To­
kyo Metropolitan Government and the wards of other municipalities; and (4) improvement
of various taxation and fiscal systems through increase and expansion of taxable sources in
large cities such as Tokyo, through the reform of the financial resources allocation adjust­
ment system, and through promotion of the national government’s financial assistance to
maintain Tokyo’s police. The Tokyo Metropolitan Government, like New York City’s gov­
ernment, concentrated much of its effort on the first, reducing staff by 9,255 employees, in
addition to a cut in services, imposition of fees on consumer services, and a reduction or
abolition of subsidies. A first reduction in the deficit was reached in 1979, and a surplus by
1981, the first time in twenty years that the Tokyo Metropolitan Government did not have
a deficit. Thus, Tokyo’s financial rehabilitation was completed a year before the scheduled
date of 1982. It went from a 101 billion-yen deficit in 1979 to a 31 billion-yen surplus in
real terms in 1981.
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EMPLOYMENT AND EARNINGS
201
also had severe losses in related wholesale and distribution jobs. While
New York City was never as important a manufacturing center as London
was in the United Kingdom, the manufacturing sector was once central
to the city’s economy. Thus, in their landmark study, Hoover and Vernon
(1962) predicted an actual increase from 1956 to 1985 in the absolute
number of manufacturing jobs. Instead of the predicted increase of 0.8
million manufacturing jobs for the region, there were losses of 0.6 million
in the region and of 0.5 million in the city. New York City’s was a diver­
sified manufacturing sector, which included important concentrations of
electrical engineering and machine goods manufacturing, in addition to
the more traditional consumer industries of furniture and apparel. Be­
yond the city, the broader New York metropolitan region extending into
New Jersey, contained a vast industrial complex which included chemical
and instruments manufacturing and a broad range of factories producing
components for military suppliers. New York’s harbor and distribution
facilities were an important element in the growth of this industrial com­
plex and made it a key location for headquarters.
While it is true that average wages in production in New York City
were never among the highest in the country because of the absence of
such key industries as steel, auto, and aerospace, it is also true that av­
erage wages were increasing and reached their highest relative level as
recently as 1970—101.2% of the national average hourly wage in produc­
tion. One indicator of the extent of change in manufacturing is the de­
cline of that wage level, which had fallen to 87.6% of the national average
by 1982. (A similar relative decline can be seen in Los Angeles, whose
manufacturing sector is radically different from New York City’s, being
dominated by aerospace and electronics; nonetheless, hourly production
wages fell from 108% of the national average in 1970 to 100.7% in 1982.
As in New York City, that wage level would be significantly lower if
sweatshops and industrial homework were included.)
The losses in manufacturing were not simply due to closing or depart­
ing factories but also due to the departure of manufacturing headquar­
ters, particularly those of the so-called Fortune 500 companies, the larg­
est industrial firms in the country. In 1965 New York City had 128 of
these headquarters; in 1976 there were 84, and in 1986, 53 (Drennan
1987: 25). In 1917, before there was a Fortune 500 list, data compiled
from Moody’s Industrials and annual reports indicate that 150 of the 500
largest industrial corporations were headquartered in New York City
(Conservation of Human Resources Project 1977: 38-40). These losses
represent departures to suburban locations and outside the region, ac­
quisitions by other corporations, and corporations no longer on the list
because of reclassification or changed size. The change is further under­
lined by the fact that there were also 28 gains: mostly companies that
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202
THE SOCIAL ORDER
moved their headquarters into New York City or were added to the list
because of size or reclassification (Conservation of Human Resources
Project 1977: 40). It is evident that the headquarters of industrial corpo­
rations became more mobile toward the 1970s. Data for the ten largest
old metropolitan areas of the Northeast and North Central states show
that together they accounted for 302 of the Fortune 500 headquarters in
1957, a level they had maintained since 1917 according to the data from
Moody’s Industrials, when they had 316 such headquarters. But by 1974,
seven of the ten metropolitan areas had losses, leaving a total of 237 head­
quarters (Conservation of Human Resources Project 1977: 38).
Some of the reasons that led to the decline in manufacturing in New
York City are the same as in London: inadequate amount and kinds of
space at a time of growing needs by industry; the development of an
interstate highway system, which further contributed to the declining
relative advantage of a central city location and contributed to the move­
ment of manufacturing, wholesale trade, trucking, and warehousing out­
side the city; the weaknesses in certain branches, which reduced their
competitiveness for land and resources with other sectors of the econ­
omy. In addition there are the general factors that affected all old indus­
trial areas—growing international competition, inadequate investments
for modernization of plants, leading to lower productivity, the develop­
ment of technologies that made possible locating production and assem­
bly facilities in low-wage countries or low-wage regions of the United
States. In brief, the combination of factors that led to the large concen­
tration of plants and headquarters in cities such as London and New York
came to lose its relevance and importance in the late 1960s because of
changes in international, political, economic and technical conditions.
In contrast, services, excluding FIRE, increased from half a million in
1950 to over 1 million in 1987, and FIRE went from 0.3 million to over
half a million—a figure that incorporates sharp losses of insurance jobs
over this period. A more refined analysis of the city’s economy shows that
the producer services and finance reached over 1 million jobs in 1987, in
a perfect reversal of the manufacturing trajectory. None of the other ma­
jor industry groups had such pronounced changes. Thus wholesale and
retail trade declined from 0.7 million to 0.6 million, and transportation
and utilities declined from 0.3 million to 0.2 million. After a fall to 77,000
jobs in 1980, construction, not surprisingly, regained much of its loss,
almost reaching its 1950 level of 0.12 million jobs by 1987. Government
jobs overall increased from 0.37 million in 1950 to 0.6 million in 1987.
In the years following the 1975-1976 fiscal crisis, when overall employ­
ment continued to decline, several industries had pronounced growth
rates. The overall 17% increase in white-collar industries from 1977 to
1980 was even higher in some industries, with rates of over 50% (com­
puter services) and others hovering around 20% to 30% (management
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203
EMPLOYMENT AND EARNINGS
consulting and public relations, engineering and architecture, account­
ing, protective services, securities, etc.) (U.S. Department of Labor, Bu­
reau of Labor Statistics various years). In this period employment in­
creased by 7.7% in finance, insurance, and real estate, by 9.4% in
communications and media, and by 24.7% in business services. Also, em­
ployment expanded by 8.9% in educational services and research insti­
tutions, by 7.4% in entertainment, culture, and tourism, and by 3.9% in
social services (U.S. Department of Labor, Bureau of Labor Statistics,
various years). (See Table 8.3 for related data.)
A comparison of the industry distribution in the private sector (U.S.
Department of Commerce, Bureau of the Census, 1977-1987) for Man­
hattan, New York City, and the United States as a whole (see Table 8.4)
shows that the single sharpest difference is in the FIRE sector. While
23.6% of all workers in Manhattan are employed in FIRE, this share falls
to 17.4% for the city as a whole and to 7.4% for the United States as a
whole. It would be less than 7.4% if New York City were excluded, since
the city’s FIRE sector accounts for 11% of the U.S. total. A second set of
differences between the occupational distribution for the city and that for
the country as a whole is in manufacturing and in retail. While 24.8% of
all workers in the United States were in manufacturing, this share fell to
16.4% for New York City and 14.6% for Manhattan, with a good number
of these in the offices of manufacturing firms. However, in an interesting
reversal also evident in other major cities, 4.4% of workers in Manhattan
were in apparel compared with 1.5% in the country as a whole. Only
9.9% of workers in Manhattan were in retail, compared with 12.5% in
New York City and 20.6% in the country as a whole. Clearly, this does
not point to inadequate retail facilities in New York City, but rather to
the marked overrepresentation of other sectors, such as FIRE. Also of
TABLE 8.3
New York: Employment Change by Industry, 1977-1985
% Change
Legal services
Business services
Banking
Retail
Wholesale
Real estate
Transportation
62
42
23
17
14
6
Manufacturing
-20
-22
Construction
Insurance
-30
-2
Source: County Business Patterns, issues for New York,
1977 and 1985.
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204
THE SOCIAL ORDER
TABLE 8.4
United States, New York, and Manhattan: Employment
Distribution by Industry, 1984 (percent)
United
States
Construction
New
York Manhattan
5.3
3.7
2.0
24.8
16.4
14.6
1.5
4.2
4.4
6.0
8.1
6.9
6.7
7.6
8.0
Retail
20.6
12.5
9.9
FIRE
7.4
17.4
23.6
Business services
4.9
8.9
11.6
Legal services
0.8
1.9
2.6
Personal services
1.3
1.0
0.7
Health services
7.9
8.1
4.9
Educational services
1.9
3.2
3.1
Other services®
9.2
10.3
11.0
Manufacturing
Apparel
Transportation, communications,
and utilities
Wholesale
Source: County Business Patterns, issues for the United
States and New York, 1984.
Note: Percentages do not total 100 because other catego­
ries are not listed. Such categories include agricultural
services, forestry, fisheries, mining, and nonclassifiable es­
tablishments.
a Other services include hotels and other lodging
services, auto repair services and garages, social services,
miscellaneous repair services, motion pictures, amusement
and recreation services, museums, botanical and zoological
gardens, and miscellaneous services.
interest to this inquiry is the fact that while less than 1% of workers in
the United States were in legal sevices, the share was more than three
times higher in Manhattan; business services showed a similar differen­
tial, accounting for 4.9% of all workers in the United States compared
with 8.9% in New York City and 11.6% in Manhattan. Most of the other
industries had similar shares of workers in all three areas under consid­
eration.
While New York City is according to many criteria a single labor mar­
ket, there are pronounced differences among the various boroughs and
especially between Manhattan and the other four boroughs. One could
argue that for certain industries we are dealing with separate markets or,
certainly, separate submarkets. The distribution of economic activity by
borough points to a number of trends. First, there is a disproportionate
concentration (60%) of all activities in Manhattan. This disproportion be­
comes even more accentuated when we consider certain types of activi-
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EMPLOYMENT AND EARNINGS
205
ties. In 1985, over 89% of FIRE and almost 86% of business services in
New York City were located in Manhattan. The extent of manufacturing
concentration in Manhattan, while lower than in earlier periods, still re­
mained high, at 59%, particularly so for apparel, with 69%. These figures
also show that the concentration of apparel in Manhattan is much higher
than that in other boroughs and than that of manufacturing as a whole.
The distribution of economic activity within boroughs shows a few pro­
nounced differences. Most pronounced is the greater concentration of
FIRE and business services in Manhattan, totaling 35% of all the bor­
ough’s workers compared with about 10% in each of the other boroughs.
A second difference is the much larger share of retail activity in the four
outer boroughs, where it reached about 17% of employment in 1985,
while in Manhattan it was under 10%.
These growth rates together with the decline in offices and manufac­
turing jobs point to a recomposition in the city’s economy. In 1950, man­
ufacturing supplied almost one job in three while services supplied one
in seven. By 1980, these figures were reversed. There was a parallel loss
of office jobs, particularly headquarters’ office jobs, which declined by
41% between 1969 (highest employment) and 1980 (Ehrenhalt 1981: 46).
The producer services also had a decline in employment of 9.4% from
1970 to 1977. But over the ensuing five years, from 1977 to 1982, they
grew by 19%. This sector continued to grow, but at a much slower rate,
of 8% for the three-year period from 1982 to 1985 and by 2% from 1985
to 1986. By then, almost a third of New York City’s employment was in
these industries, while the share of manufacturing had been further re­
duced from 22% in 1977 to 15% in 1985.
London
Three facts dominate London’s economic history since 1960: first, the loss
of 800,000 manufacturing jobs in a city that was once an important center
for light manufacturing; second, a rather stagnant economy for about
twenty years, with steady losses in employment and population; and
third, a new phase of rapid growth based on finance and producer ser­
vices, beginning in 1984, with employment in these industries overtaking
that in manufacturing in 1985. That was the year when net employment
gains replaced net losses in London, after twenty-five years of losses. The
equivalent event took place in New York City in 1984. In only fifteen
years, there has been a pronounced shift from manufacturing to services.
In 1971, 27% of all London jobs were in manufacturing, and 68.6% were
in services. By 1986, these shares had changed to, respectively, 15% and
80%. In a period of two decades, there has been a pronounced transfor-
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206
THE SOCIAL ORDER
mation in the employment distribution of London, pointing to a restruc­
turing of the economic base.
London’s employment fell from 4.3 million in 1961 to 3.9 million in
1971 and to 3.5 million in 1981 (U.K. Office of Population and Surveys
1963, 1973, 1983).2 It fell to its lowest level of the postwar period in 1983
at 3.4 million, and began to increase again after 1985, reaching 3.5 mil­
lion by 1987 (Department of Employment estimates). As in New York
City, this fall in employment was dominated by the loss of manufacturing
jobs, which fell from 1.4 million in 1961 to 680,000 in 1981 and about half
a million in 1985. A further loss of 100,000 jobs occurred from 1985 to
1988. This parallels trends in the rest of the country, where manufactur­
ing has declined from 10.7 million in 1961, to 5.8 million in 1982 and 5.3
million in 1985. But it is a relatively larger loss. In the two decades after
World War II, about a third of London’s population was in manufactur­
ing. In their detailed study of the London economy, Buck, Gordon, and
Young (1986) established that in the postwar decades the city’s manufac­
turing sector was, with a few exceptions, structurally sound, paying rel­
atively good wages overall, with considerable inputs of skilled and craft
work, and relatively high levels of specialization. London accounted for
significant output shares in several industries.
As with any large manufacturing sector, the reasons for the decline of
London’s are complex. There are general reasons shared by most old in­
dustrial countries in the West: growing international competition, declin­
ing productivity as a result of insufficient investment in modernizing
plants, and, in some cases and at certain times, foreign exchange rates
that did not favor manufacturing exports. In addition, there are specific
conditions (primarily inadequate space and high land prices) in large,
older cities, such as London and New York and to some extent Tokyo,
that toward the late 1960s began to exercise constraints on many indus­
tries. Fothergill and Gudgin (1982) argue that the decline of manufactur­
ing in London was in part related to the constraints on expansion at a
time of greater needs for large-scale spaces in industrial production, an
argument also advanced by analysts of New York City’s manufacturing
decline. This would seem to explain partly the finding of Buck, Gordon,
and Young (1986) that job losses in London were negatively related to
national changes in manufacturing. After controlling for changes ex­
pected on the basis of the national rate of change, they found that London
lost relatively more jobs in nonrecession periods and relatively fewer dur­
ing national recessions. This suggests that the losses in London were in
part a result of constraints on growth specific to London. It is worth not2 The figures for 1961 are adjusted to be comparable with a Census of Employment basis.
See Buck, Gordon, and Young (1986).
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EMPLOYMENT AND EARNINGS
207
ing that much of London’s manufacturing loss was not due to shifts of
jobs out of London; it is estimated that about 200,000 job losses can be
attributed to factory closures (Greater London Council 1986: 46-47) and
that first-time locations outside of London, notably in the Southeast re­
gion, have also contributed to the manufacturing loss in London. In the
same line of analysis, Buck, Gordon, and Young (1986) found that some
of the weaker manufacturing branches in London were increasingly un­
able to compete under the conditions of higher prices for inputs in Lon­
don, again a trend parallel to the case of several industries in New York
City. London, like New York, experienced a rapid loss of low-wage man­
ufacturing jobs in the 1960s and 1970s, especially in the apparel and fur­
niture branches. My fieldwork in London points to a very minor expan­
sion in some of these industries in London in the last few years, notably
clothing and leather accessories. Though on a much smaller and re­
stricted scale, it parallels New York City. In the late 1970s, New York
City began to experience a renewed expansion in some of these
branches, though under different conditions from the pre-1970 period.
Finally, as in New York City, London today has several,fairly strong
manufacturing industries notwithstanding continuing overall losses. They
are high-wage, high value-added industries, such as printing (tied to Lon­
don’s leading industries: finance and producer services), the high-tech
sector based in the M4 corridor, and the communications industries. Av­
erage wages for full-time manual workers in the larger London area are
higher than the national average.
A comparison of employment changes in various industries for London
and Britain shows how deep the losses were for the country as a whole
since the late 1970s. From 1978 to 1985 there was an absolute decline in
total employment of 5% in Britain and 4% in London. The country as a
whole had a 24% decline in manufacturing jobs. London lost 10% of pub­
lic service jobs compared with 3% for Britain as a whole. In addition to
manufacturing and public services, other major sectors lost jobs in Lon­
don during the 1970s: construction, utilities, transport and communica­
tions, and the distributive trades. From 1973 to 1983 these sectors lost
218,000 jobs. As in New York City, public sector services employment
fell during the 1970s after decades of growth. Public services had contin­
ued to grow up to 1976 and since then have been cut back. Local author­
ity and central government employment both suffered severe cuts. Con­
struction, on the other hand, declined by 21% in London, compared with
24% for Britain.
The total of service jobs has remained more or less constant at 2.6 mil­
lion jobs in London and has increased in the rest of Britain from 13.1
million to 13.6 million jobs. Behind constant levels for service jobs in
London, there are declines in some industries, notably transport and
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208
THE SOCIAL ORDER
communications, and increases in banking, insurance and finance jobs,
which grew from 379,000 in 1971 to 633,000 in 1985. London’s preemi­
nence as a location for the latter jobs is evident from the share it holds in
these jobs, which in 1985 stood at one-third of Britain’s total of 1.9 mil­
lion. This share increases if we exclude insurance, a sector where London
lost 10% of its jobs during the 1970s. London’s share of jobs is far less
pronounced in other service industries—for example, 376,000 wholesale,
hotel, and catering jobs out of a national total of 2.2 million, which is
equivalent to its share of all workers. A high percentage of services can
be expected in a large city. But London’s concentration of producer ser­
vices and finance is higher than the overall concentration of services.
A more detailed analysis of trends in recent years shows extremely pro­
nounced changes in certain industries during the 1980s (see Table 8.5).
From 1981 to 1987, business services increased by 30%, personal ser­
vices by 20%, and banking and finance by 13%. In contrast, several key
manufacturing industries had severe declines. Electrical engineering de­
clined by 22%, footwear and clothing by 30%, and mechanical engineer­
ing and vehicles by 37%.3
Wh