Urban Studies, Vol. 33, N o.

8, 1407± 1430, 1996

Social Polarisation, Econom ic Restructuring and

W elfare State Regimes

Chris H amnett

[Paper received in ® nal form , March 1996]

Sum m ary. T he central argu m ent of this paper is that it is miscon ceived to view social polaris-
ation of occu pation al stru cture and incom es in glob al cities as eith er inevitab le or as a direct
prod uct of econom ic restruc turing. It is argu ed that this neglects the key role of differen t welfare
state stru ctures which can and do in¯ uence both occup ation al and incom e stru ctures indepen-
dently of the processes of econ omic restru cturing. T he form and exten t of polarisat ion in different
cities are likely to re¯ ect the nature and form of w elfare state regim es in differen t cou ntries as
w ell as the form of econ om ic restru cturing and other factors such as the scale of im m igration .
Evidence from London suggests that grow ing incom e polarisat ion is accom panied by a profes-
sion alisatio n of the occu pation al stru cture.

Introduction
In recent years, the concepts of social polar- relatively and possibly absolute ly, at the ex-
isation and duality have becom e the conve n- pense of the middle. This is the dominant
tional wisdom regarding the changing social interpretation and re¯ ects the concerns of a
structure of major cities in W estern capitalist num ber of com mentators (Harrison and
countries. Although the precise de® nitions of Bluestone, 1988; Kuttner, 1983; Lawrence,
polarisation vary (M arcuse, 1989; Pahl, 1984; Levy, 1987). M arcuse (1989, p. 699)
1988; Pinch, 1993), it is widely accepted that put it well:
major cities are increasingly being divided
into a grow ing highly skilled and highly paid The best im age¼ is perhaps that of the egg
upper stratum and a grow ing low-skilled, and the hour glass: the populat ion of the
low -incom e stratum with a high proportion city is norm ally distribu ted like an egg,
of ethnic minority groups . The middle social widest in the middle and tapering off at
stratum is declining, both absolutely and both ends; when it becomes polarized the
relatively. Thus, pola risation is a term refer- middle is squeezed and the ends expand
ring to a change in certain social distribu tions till it looks like an hour glass. The middle
such that there is a shift away from a statisti- of the egg may be de® ned as intermediate
cally norm al or egg-shaped distribu tion to- social strata¼ Or if the polarization is be-
wards a distribu tion where the bottom and tw een rich and poor, the middle of the egg
top ends of the distribu tion are grow ing, refers to the middle incom e group¼ The
Chris Ham nett is in the Department of Geography, King’ s College London, Strand, London WC2R 2LS, UK. Fax: 0171-873-2612.
E-mail: C.H AMNETT@ KCL.ac.uk. The author wishes to thank the many individuals at seminars in the Departments of Geography
at Birkbeck College, the London School of Economics, and Shef® eld, Edinburgh and Loughborough Universities as well as colleagues
at the 1995 ESF Conference on the Future of European Cities, the London Seminar, and the 1995 Urban Change and Con¯ ict
Conference who made many perceptive and critical comments on earlier versions of this paper. He doubts that this version w ill entirely
satisfy them.

0042-0980/96/081407-24 $6.00 Ó 1996 The Editors of Urban Studies

1408 CH RIS H AM N ETT
metaphor is not structural dividin g lines,
but of a continuum , whose distribu tion is
becom ing increasingly bi-m odal.
M ollenkopf and Castells (1991, p. 406)
also note that the dual city notion: ª usefully
emphasises one trendÐ both the uppe r and
the low er strata of a given society grow at
disprop ortionate ratesº .
The purpose of this paper is to outline and
challenge the dom inant theory of urban so-
cial pola risation. It is not disputed that in
recent years a num ber of major cities have
experienced grow ing incom e inequa lity in
that the gap between the average incom es of
the rich and poor has widened, nor is it
disputed that, in many cases, the incomes of
the low est deciles have actually fallen in real
terms whilst those of the highest deciles have
risen substantially. It is accepted that the
num ber of individu als and households at
both the bottom and top ends of the incom e
distribu tion have grow n considerably over
the last decade in many capitalist countries
(Atkinson, 1993; Jenkins and Cow ell, 1994;
Stark, 1992; Gardiner, 1993; Hills, 1995),
and that this trend has been parallelled by the
grow th of unem ploym ent and greater insecu-
rity in the labour market (Burgers, 1996).
W hat I do wish to dispute are three things.
The ® rst is that the existence of social polar-
isation is often simply taken for granted. It
has becom e the conve ntiona l wisdom regard-
ing social division s in W estern capitalist cit-
ies. But we should not fall into the trap of
uncritically accepting the existence of polar-
isation as a dem onstrable fact of contem por-
ary urban life, as som e com mentators tend to
assum e. As Fainstein et al. (1993, p. 13)
pointed out:
The im ages of a dual or polarised city are
seductive, they prom ise to encapsulate the
outc ome of a wide variety of com plex
processes in a single, neat and easily com-
prehensible phrase. Yet the hard evidence
for such a sweeping and general con-
clusion regarding the outcom e of econ-
omic restructuring and urban change is, at
best, patchy and ambiguous . If the concept
of `dual’ or `pola rising’ city is of any real
utility, it can serve only as a hypothe sis,
the prelude to empirical analysis, rather
than as a conclusion which takes the exist-
ence of con® rmatory evide nce for granted.
Secondly, and follow ing from this, I wish to
dispute the way in which the concept of
social polarisation and the associated concept
of the dual city is com monly used as a
general, all-purpose signi® er of grow ing in-
equality and social divisio ns. W hile I accept
that social polarisation has an im portant rep-
resentational, ideologica l and rhetorical role
regarding grow ing social divisio ns in cities
(Beauregard, 1993; M ollenko pf and Castells,
1991), there is a parallel danger that, by
uncritically accepting the existence of social
pola risation as some sort of general, catch-all
process, we may fail to see the existence of
different form s of polarisation in different
cities. Social polarisation is not a single ,
hom ogeneous, process which operates in the
same way in different places.
Thirdly, and perhaps most im porta ntly,
there is the danger that, by uncritically ac-
cepting the conve ntional wisdom , we may
fail to realise that the forces driving polaris-
ation in different cities differ or are mediated
in various ways.
It is thus necessary conceptually to unpac k
the term polarisation and to examine the
extent to which different form s of polaris-
ation are found in different contexts and to
theorise the reasons for such variations.
Otherwise we risk becom ing slaves to unex-
amined, im precise or ill-de® ned concepts. As
M ollenkopf and Castells (1991, p. 405) point
out:
The dual city is a useful ideologica l notion
because it aims to denoun ce inequality,
exploita tion, and oppre ssion in cities. But
its underlying assumptions are rarely made
explic it, because those who employ it tend
to favour social critique over social theory.
The politic al and emotiona l charge of a
dualist approach and the failure to spell
out its assumptions means that it cannot
comprehend the com plexity of urban so-
cial reality.
M ollenkopf and Castells highligh t the exist-
 SO CIAL PO LA RISA TIO N
ence of two different form s of polarisation:
the social and the spatial. These may or may
not be related, as it is hypothe tically possible
to have social polarisation (at the city level)
without spatial pola risation/segregation and
vice versa, though in capitalist cities social
divisio ns generally go hand-in-hand with
spatial segregation via the operation of the
housing market and the price mechanism.
The issue of spatial segregation will not be
discussed in this paper.
Finally, and follow ing on from the con-
cerns outlined above , it is the intention of
this paper to challenge the dom inant theory
of polarisation advanced by Sassen and oth-
ers which sees occupational and incom e
polarisation as the outcom e of a general shift
from manufacturing to services which is par-
ticularly marked in global cities as a result of
their concentration of key advanced business
and ® nancial services, gentri® cation and the
grow th of sweated manufacturing. This the-
sis of pola risation is essentially uni-c ausal,
focusing on the dominant role of economic
restructuring. It will be argued that, whilst
there is strong evidence for grow ing incom e
inequality in capitalist econom ies, there is no
evide nce of occupational polarisation on the
basis of of® cial statistics, and that the devel-
opm ent of incom e pola risation may be the
result of changes in taxation and differences
in the structure and form of welfare provision
and other factors in som e W estern countries.
The thesis to be put forward is that the
extent and the form s of social pola risation in
different countries are unlikely to be hom o-
geneous or uni-dir ectional, that they are a
result of a combination of econom ic restruc-
turing which is changing the structure of the
labour market, the structure of occupations
and incom es in the paid labour market and
the division betw een the econom ically active
and the inactive and unemployed. In ad-
dition, it will be argued that there may be
other forces generating incom e polarisation
such as shifts in house hold com position and
the age structure of the population. Finally, it
will be argued that the extent of polarisation
in the occupationa l and incom e structures of
W estern societies is likely to be mediated by
1409
structures of welfare provision and taxation
which are instrum ental in in¯ uencing both
the necessity to enter the paid labour market,
and the incom es derived from paid employ-
ment and from welfare bene® ts. It will fur-
ther be argued that the extent of pola risation
in many US cities is a result of the speci® c
institutiona l conte xt in that country , particu-
larly the high and grow ing level of im mi-
gration and its im plication for labour supply ,
the relative paucity of welfare provisions and
incom e support for the poor, and the absence
of effective minim um wage legislation and
the grow th of a large, low -paid casualised
service sector. The rapid grow th of incom e
pola risation in the UK in the 1980s and early
1990s may also re¯ ect som e similar trends,
although the absence of a grow ing low-skill
section of employed labour force in Britain
and in other western Europea n countries may
re¯ ect differences in job opportu nities and
welfare provision which inhibit the growth of
this section of the paid labour force. In recent
years we have seen the emergence of tw o
different literatures: one on polarisation and
econom ic restructuring, and another on wel-
fare state regim es. These literatures have
rarely been brought toge ther but, as this pa-
per will attempt to show , the relationship
between the two is crucial.
The paper is divide d into three major sec-
tions. The ® rst outlines the main elements of
the dom inant social polarisation thesis, par-
ticularly as advanced by Sassen. The second
section gives empirical evide nce for the UK
and London regarding changes in incom e
inequality and occupationa l structure during
the 1980s. It show s that whilst there is strong
evidence for incom e inequality there is no
evidence for occupational polarisation which
would be expected if Sassen’ s thesis is cor-
rect. The third section puts forward an
alternative thesis based on the idea of welfare
state regim es. It argues that the grow th of
incom e pola risation in the 1980s in Britain
and other W estern capitalist countries ow es a
great deal to changes in government policie s
regarding the welfare state, and argues that
while industrial restructuring in global cities
and elsewhere is im porta nt, it is miscon-
1410 CH RIS H AM N ETT
ceived to view this as the sole cause of
incom e pola risation.
Social Polarisation: Sassen’ s Thesis
In a well-known series of books and papers,
Saskia Sassen (1984, 1985, 1986, 1990,
1991) systematically outline d a thesis for
global cities whereby social polarisation in
these cities is seen as the result of a form of
econom ic restructuring which is particularly
concentrated in such cities. This restructuring
has several key elements. First, there is the
shift from manufacturing to services, particu-
larly advanced business services. This shift is
seen to result in a polarised occupational and
incom e structure which is characterised by
grow th both at the top and at the bottom end
by virtue of the more polarised nature of the
service sector, and the contraction of the
manufacturing sector which contained more
skilled-manual, middle-incom e jobs.
Secondly, Sassen points to the grow th of
low -grade service jobs which are seen to be
dependent on the grow th at the top end of the
occupationa l and income structure. These
jobs are concentrated in the personal service
sector and provide services for the wealthy.
She pointe d out (Sassen, 1984, p. 145) that:
The dem and for low-wage workers to ser-
vice the high-inc ome lifestyles of the rap-
idly expanding top-level workforc e is a
key factor in the expansion of an inform al
sector in cities like New York and Los
Angeles.
Thirdly, Sassen points to the grow th of infor-
malisation within what remains of the
`dow ngraded’ manufacturing sector. These
low -skill, low -pay jobs are strongly concen-
trated in the im migrant labour force which is
seen to be attracted to globa l cities by virtue
of the grow ing labour market opportu nities.
This grow ing occupationa l and incom e polar-
isation is said to be linked to a grow ing
geogra phic al polarisation as the top and bot-
tom of the occupationa l and incom e structure
becom e increasingly differentiated in space.
As the main elements of Sassen’ s thesis
have been outlined in this journal and else-
where (Hamnett, 1994a,b ; 1995), it is unne-
cessary to go into detail. Suf® ce to say that
Sassen (1984) argues on the basis of her
work on Los Angeles and New York that
econom ic restructuring has had several major
im plications in global cities and suggests that
new form s of econom ic grow th no longer
produc e the type s of job supply that ª were
constitutive of the massive expansion of the
middle class in the post-W orld W ar II pe-
riodº . Instead, there has been ª a vast expan-
sion in the supply of low-wage jobs and a
shrinking supply of middle -incom e jobsº
(Sassen, 1984, p. 139).
In 1991 she generalised the thesis from
New York and Los Angles to all global
cities, arguing that new structures of econ-
omic activity in globa l cities, particularly
the rapid grow th of ® nancial and busine ss
services and the sharp decline in manufac-
turing industry have ª brought about changes
in the organization of work re¯ ected in a
shift in the job supply and polarization in
the incom e distribution and occupation al
distribution of workersº (Sassen, 1991, p. 9;
emphasis added).
Sassen sum marised her thesis as follow s:
New conditions of growth have con-
tributed to elements of a new class align-
ment in global cities. The occupational
structure of major grow th industries char-
acterised by the locational concentration of
major grow th sectors in global cities in
combination with the polarised occu-
pationa l structure of these sectors has cre-
ated and contributed to grow th of a high
incom e stratum and a low-incom e stratum
of workers. It has done so directly through
the organization of work and occupational
structure of major grow th sectors. And it
has done so indirectly through the jobs
needed to service the new high-in com e
workers, both at work and at home, as well
as the needs of the expanded low-wage
work force. (Sassen, 1991, p. 13; emphasis
added)
It is clear that Sassen sees social pola risation
as the outc om e of econom ic restructuring.
Indeed, chapter 9 of The Global C ity is titled
 SO CIAL PO LA RISA TIO N
`Econom ic Restructuring as Class and Spa-
tial Polarisation’ . It is also clear that Sassen
sees the outcom e of econom ic restructuring
as an absolu te increase at both the top and
bottom of the occupational and incom e struc-
tures. She also sugge sts that the process of
econom ic restructuring and polarisation are
com mon to all global cities. She argues that
New York, London and Tokyo ª have under-
gone massive and parallel changes in their
econom ic base, spatial organization and so-
cial structure’ (Sassen, 1991, p. 4; emphasis
in origina l) and she suggests that:
ª transformations in cities ranging from Paris
to Frankfurt to Hong Kong and SaÄ o Paulo
have responded to the same dynam icº . These
are bold claims, but not everybody accepts
them . Levine (1992, p. 175) for instance,
asks
To what extent is econom ic restructuring a
`single global process’ ? To what extent
does the social polarisation of cities ¯ ow
inexorably from the intrinsic nature of
post-Fo rdist produc tion or the inherent
division of the service sector into high-
wage and low-wage employm ent?
It is here argued that this thesis, while very
stim ulating, is simultaneously partial and
overge neralised by virtue of its dual focus on
econom ic restructuring and the econom ically
active labour force, and its failure to exam ine
differences in welfare state regim es. It also
generalises from the experience of New York
and Los Angeles to global cities as a whole.
Social polarisation is seen as a direct un-
mediated consequence of econom ic restruc-
turing. It is also here argued that, while there
is undoub ted evidence of grow ing incom e
polarisation in som e capitalist econom ies,
and particularly in the major cities, the evi-
dence on the occupational structure of the
econom ically active labour force points to-
wards professionalisation (or an increase in
the proportion of professionals and man-
agers), rather than pola risation. This is not to
say that major changes in employm ent struc-
ture and opportu nities are not taking place,
but that in many western Europea n countries,
they are more likely to create a large and
1411
grow ing unemployed and econom ically inac-
tive group excluded from the labour force
rather than the grow th of a large, low -skilled
and low -paid labour force. W hile this may be
true in the US, with its large and grow ing
im migrant labour force, willing to work for
low wages (possibly forced to because of the
lim ited nature of welfare provision) it is not
necessarily true of all W estern capitalist
countries (Burgers, 1996).
W hat is missing from Sassen’ s treatment
of pola risation is that the causes of polaris-
ation may be multi, rather than mono-causal,
that polarisation may be grow ing in terms
of incom e but not occupation, and that the
extent and form of social and spatial polari-
sation may be linked to the structure of
welfare state in different countries. It is
argued here that Sassen’ s model of polari-
sation is US-based, prim arily mono-causal,
and fails to appreciate that the econom ic
pressures tow ards polarisation are mediated
by different welfare state regim es. W hat
may be happening in certain cities in the
US is not necessarily happening in similar
cities in other countie s because of differ-
ences in the econom ic, social and institu-
tional context. The next section looks at
the empirical evidence for incom e and occu-
pational polarisation in London to see to
what extent it suppor ts or contradicts
Sassen’ s thesis.
Income Polarisation : The Empirical Evi-
dence in Britain
First, some of the evide nce on incom e and
earnings inequality both in London and in
Britain as a whole will be sum marised. It is
well established that the level of incom e
inequality increased substantially in Britain
during the 1980s. This is not the same thing
as incom e pola risation in that incom e in-
equality between rich and poor can grow
without any increase in the num ber or pro-
portion s of the rich and poor groups (Kloost-
erman, 1996). Also, it should be stressed that
Sassen’ s thesis focuses on polarisation of
individu al earnings from employment. This
differs from incom e, which is usually de® ned
1412 CH RIS H AM N ETT
as incom e from earnings, transfer and wel-
fare paym ents, etc. This can be measured
either in terms of individ ual incom e units or
households. Household income is som etim es
`equiva lised’ to take into account the differ-
ent number of people in a household. If
Sassen is correct, both incom e inequality and
num bers of earners at the top and bottom
ends of the distribution should have in-
creased in London . This trend should be
more marked than in Britain as a whole.
Otherw ise, it can be argued that it is nationa l
factors which are responsib le, rather than
London’ s role as a global city.
Stark (1992), using Family Expenditure
Survey data, show ed that the distribu tion of
gross norm al weekly household pre-tax in-
com e in the UK became more unequal during
the 1980s. The top decile’ s share of total
incom e increased from 24.4 per cent in 1980
to 28.9 per cent in 1990 and the share of the
second decile rose from 16.1 per cent to 16.7
per cent. Conve rsely, the share of the bottom
70 per cent decreased, particularly those of
the lowest 30 per cent. The share of the
low est decile fell from 2.2 per cent to 1.6 per
cent. The Gini coef® cient of inequality rose
consistently from 35.8 in 1980 to 42.0 in
1990. There were similar changes in the dis-
tribution of annua l disposable house hold in-
com e (Stark, 1992). The top decile’ s share of
total incom e rose from 22.7 per cent in 1979
to 26.9 per cent in 1989, while the shares of
the next two deciles rose slightly and those
of the bottom 70 per cent fell. There is no
doubt that household incom e distribu tion in
the UK became markedly more unequal dur-
ing the 1970s, due in part to the ® scal, mon-
etary and labour market polic ies adopted by
government but also because of changes in
household com position .
These ® gures are for overall house hold
incom e including transfers. Stark next looked
at individu al earnings from employment us-
ing the New Earnings Survey. He found that
shares of the top decile rose substantially
betw een 1979 and 1991 (from 18 per cent to
23 per cent) the share of the second decile
rose marginally ; while that of the bottom
seven deciles fell. The real, in¯ ation-adjusted
incom es of the top decile group rose by 71
per cent while that of the other decile groups
rose by betw een 38 per cent (second decile)
to 16 per cent (low est decile). In 1979 aver-
age earnings of the top 10 per cent were 3.9
tim es greater than the average earnings of the
bottom 10 per cent. B y 1991, the inter-decile
ratio had risen to 5.75. There is thus little
doubt that the distribution of earnings from
employm ent became markedly more unequal
during the 1980s.
These are national ® gures, however. They
tell us nothing about the extent to which
incom e inequality has increased differen-
tially over space, particularly in London
com pared to the rest of the country. First,
there is evidence that incom es rose much
faster in London and the South East than
they did in the rest of the country . Stark
(1992) shows that from 1979 to 1991 real
average gross norm al household incom e rose
by 37 per cent in London and by 31 per cent
in the rest of the South East, compared to a
national average of 23 per cent (Stark, 1992,
Table 30). In the Midlands and the northern
regions by contrast, the real increase ranged
from 9 per cent to 19 per cent. But these
® gures do not show an increase in incom e
pola risation or inequality.
Looking speci® cally at income inequality,
the shares of the top decile of household
incomes in London rose from 24.8 per cent
of the total in 1979/80 to 28.3 per cent in
1985/86 and to 33.5 per cent in 1989/90. The
share of the next decile rose only marginally
(from 16.1 per cent to 16.5 per cent), whilst
those of all othe r deciles fell. A similar,
though less marked, pattern was found in all
the othe r regions (Stark, 1992, Table 31).
Perhaps the most telling evide nce, how ever,
is that when Stark looke d at the changing
percentage of households in each region in
the national top 10 per cent and bottom 10
per cent of gross house hold norm al weekly
incom e in 1979/80 and 1989/90, he found
that the percentage of house holds in London
in the top 10 per cent of national incom es
rose from 14.3 per cent in 1979 to 20.1 per
cent in 1989, while the proportion in the
bottom 10 per cent also rose from 8.4 per
 SO CIAL PO LA RISA TIO N 1413

Table 1. Percentag e of househo lds in each region in the national top 10 per cent
and bottom 10 per cent of gross househo ld norm al weekly incom e

T op 10 per cent Bottom 10 per cent

1979/80 1989/90 1979/80 1989/90

G reater London 14.3 20.1 8.4 10.3

R est of South East 14.8 19.4 7.0 6.6
East M idlands 9.3 10.0 8.2 8.2
W est M idlands 10.3 9.8 8.2 10.8
East A nglia 7.7 11.6 9.6 7.3
South W est 7.5 10.6 9.5 7.0
Y orkshire /Hum berside 6.1 6.2 12.2 12.2
N orth 7.1 6.4 14.6 13.3
N orth W est 8.3 8.8 11.1 10.7
W ales 7.3 7.2 11.0 11.6
Scotland 8.9 8.0 11.9 13.3
N orthern Ireland 6.1 9.2 18.2 18.0

Source: Stark (1992, Table 32; from Family Expenditu re Survey).

cent to 10.3 per cent (Table 1). In the South
East, by contrast, although the proport ion of
households in the national top 10 per cent
of incom es rose from 14.8 per cent to 19.4
per cent, the proportion in the bottom 10
per cent of national incom es fell from 7 per
cent to 6.6 per cent. This clearly indicates
that households in London became more
polarised in incom e terms relative to the
national average during the 1980s. The de-
gree of incom e inequality between rich and
poor rose sharply and the proportions of rich
and poor also increased. Incom e inequa lity
also increased sharply in Britain as a whole.
These are household incom e ® gures, how-
ever, and Sassen’ s thesis relates speci® cally
to earnings from employm ent. But, once
again, Stark shows evidence of grow ing
earnings inequa lity in London. In 1979, the
inter-decile ratio for adult males in London
was 2.60, the highe st ® gure of all regions
except Northern Ireland where special factors
are at work. By 1991, the inter-decile ratio
had increased to 3.58 in London, com pared
to 3.16 in Great Britain as a whole (Table 2).
This is a bigger increase than in any other
region. The pattern of inter-decile change for
full-tim e females was less clear, rising from
2.30 to 2.74 in London, but more sharply in
all othe r regions. Recent research (Hamnett
and Cross, 1996) con® rms these trends from
1979 to 1994. It is clear that male earnings
inequality increased more rapidly in Greater
London than elsewhere during the 1980s, but
earnings of full-tim e wom en workers did not.
This is a re¯ ection of higher increases in
wom en’ s earnings at the bottom end in Lon-
don than elsewhere.
The Changin g Socio-econom ic Structure
of Lond on, 1981± 91
Sassen (1991, p. 24) argues that ª New York,
London and Tokyo show parallel employ-
ment and earnings trendsº and she argues
that, while London has witnessed an increase
in professionals and managers, ª the num ber
of clerical and blue-collar service jobs has
also increased signi® cantly in the City and in
London at largeº (p. 269). Although she
provide s data on the changes in the industrial
structure of London, she provide s no data to
back up her argum ent that London has seen
an ª occupationa l transform ationº (p. 233).
This section examines census data on the
socio-econom ic structure of London to see
what evidence there is for a polarisation of
occupations.
The data used in the paper are derived
from publish ed data for the 1961, 1971, 1981
and 1991 censuses on socio-econom ic
classi® cation of economically active (em-
1414 CH RIS H AM N ETT

Table 2. D istributio n of earning s by region, as percenta ge of mean earnings (full-tim e earnings

only)

1979 1991
Inter-de cile ratio
Lower U pper Lower U pper
decile decile decile decile 1979 1991

Males
Greater London 58.2 151.4 46.8 167.7 2.60 3.58
Rest of South East 61.4 145.3 50.6 160.0 2.37 3.16
Great B ritain 61.0 145.3 50.4 159.2 2.38 3.16
Fem ales
Greater London 63.1 144.9 54.9 150.5 2.30 2.74
Rest of South East 65.1 147.1 57.1 156.3 2.26 2.74
Great B ritain 64.4 147.0 54.3 158.9 2.28 2.92

Source: Stark (1992, Table 34).

ployed and unem ployed ) usual residents.
There are some 17 socio-economic groups
and these are show n in Table 3. From these
groups is derived a standard classi® cation
into 6 large groups . The ® rst group (1, 2 and
13) consists of employers and managers; the
second (3 and 4) of professional workers
(both employe rs and employe es); the third
group (5 and 6) consists of othe r non-m anual
workers (artists, allied workers, intermediate,
and junior non-m anual workers including
clerical workers). The fourth group com-
prises the skilled manual and supervisory
workers and self-employed (non-pr o-
fessional) workers ( 8, 9, 12 and 14). The
® fth group is comprised of semi-skilled and
personal service workers (7, 10 and 15).
Finally, there are the unskilled (11). In ad-
dition, 16 is Armed Forces and 17 is
ª occupation inadequately describedº . All
data are 10 per cent. It should be stressed that
a major change in the classi® cation of occu-
pations occurred in 1980 which affected the
socio-econom ic group classi® cation of the
1981 census. This had the effect of reducing
the proport ion of professionals, increasing
the proportion of interm ediate non-m anual
workers, reducing the propor tion of junior
non-m anual workers and raising the pro-
portion of semi-skilled and personal service
workers.
It should also be noted that a new category
has been added to the socio-econom ic ® gures
in the 1991 census, nam ely those on gove rn-
ment training schem es. In this analysis, they
are counted along with groups 16 `Armed
forces’ and 17 ª occupation inadequately de-
scribedº . The three categories form a residual
category of limited num erical importance
and they can be disregarded for the sake of
the analysis.
Looking ® rst at the occupational structure
of all persons in London, it is clear that there
was a sharp increase in the number of man-
agers and in the num ber of professionals
between 1981 and 1991. The num ber of
managers increased by 27 per cent and the
num ber of professionals by 25 per cent. By
contrast, the num bers of persons in every
othe r socio-econom ic group fell: by almost 3
per cent in the case of junior and interm edi-
ate non-m anual workers; by 18 per cent for
skilled manual workers, manual ow n-account
workers and supervisors; 26 per cent for
semi-skille d and personal service workers;
and by 22 per cent for unskilled workers
(Table 4).
As a result, the proportion of managers
and employers rose by 4.7 percentage points
from 12.6 to 17.3 per cent. The proportion of
professionals also rose from 4.5 to 6.1 per
cent and, despite the absolute decline, the
proportion of all othe r non-m anual workers
rose from 37 per cent to 39 per cent. The
 SO CIAL PO LA RISA TIO N 1415

Table 3. The standard 17 OPC S/socio-ec onom ic groups

1 Em ployers and managers in large establish ments

2 Em ployers and managers in sm all establish m ents
3 Professio nal workers, self-em ployed
4 Professio nal workers, em ployees
5.1 A ncillary workers and artists
5.2 Forem en and supervis ors, non-m anual
6 Junior non-m anual workers
7 Personal service w orkers
8 Forem en and supervis ors, manual
9 Skilled m anual workers
10 Semi-skilled m anual w orkers
11 U nskilled m anual w orkers
12 O wn-accou nt workers, other than professio nal
13 Farm ers (em ployers and managers )
14 Farm ers (ow n-accou nt)
15 A gricultur al w orkers
16 M em bers of Arm ed Forces
17 Inadequ ately describe d occupati ons

percentage share of all three manual groups
fell, by 2.2 percentage points in the case of
skilled manual workers; 3.1 per cent for
semi-skilled and personal service workers;
and by 0.8 points for unskilled manual work-
ers. It is clear that, on the basis of the of® cial
statistics, the process of change is one that
can be termed `professionalisation’ Ð that is,
an increase in the proportion of professionals
and managers. There is no evidence of polar-
isation, or of `proletarianisation’ in the occu-
pational structure.
These are overall changes, however. W hat
of the changes in the occupational structure
of econom ically active men and women?
Looking at the occupationa l structure of
males, we ® nd (Table 5) a very similar pat-
tern of changes. There was an absolute in-
crease in the num bers of employers and
professionals (11 per cent and 13 per cent
respectively), and a decline in the num bers in
all othe r categories: a 5 per cent fall in the
num ber of intermediate and junior manual
workers; a 19 per cent fall in the num ber of
skilled manual workers; 24 per cent in the
semi-skilled and personal service workers;
and a 32 per cent fall in unkskilled workers.
The proportion of managers grew by 4.2
percentage points, professionals by 1.8
points, and intermediate and junior non-
manual workers by 1.7 points. All three man-
ual groups declined in proportionate terms.
Again, there is no evidence of pola risation
and a strong movement tow ards what can be
termed professionalisation.
The changes in the occupational structure
of econom ically active females are broadly
similar, although the structure of wom en’ s
occupations is very different from that of
men. The num ber of managers and profes-
sionals grew extremely rapidly, by 76 per
cent and 93 per cent respectively, though
adm ittedly from a very low initial base. This
indicates the wom en are beginning to move
into managerial and professional jobs in con-
siderable num bers. The proportion of women
in all other occupational groups fell, by a
remarkable 28 per cent in the case of semi-
skilled and personal service workers (Table
6). In proportionate terms, the percentage of
female managers and professionals rose by 6
and 1.6 points respectively. The proportions
almost doubled : from 7.6 per cent to 13.5 per
cent for managers and from 1.7 per cent to
3.3 per cent for professionals. By far the
largest female occupationa l group is inter-
mediate and junior non-m anual workers,
which includes clerical workers, and this
group remained stable at 58 per cent. The
bigge st decline was in the proport ion of un-
 1416

T ab le 4. S ocio-econom ic change in L ondon, 1981± 91: all residents, econom ically active, em ployed and
unem ploy ed

Percentage
Percentage point
Grouped A bsolute Percentage change
S EG s 1981 1991 change change 1981 1991 1981± 91

1,2,13 42 521 54 070 11 549 27.16 12.6 17.3 4.7

3,4 15 055 18 892 3 837 25.49 4.5 6.1 1.6
5,6 124 936 121 432 2 3 504 2 2.80 37.1 39.0 1.9
8,9,12,14 66 048 54 214 2 11 834 2 17.92 19.6 17.4 2 2.2
7,10,15 53 368 39 630 2 13 738 2 25.74 15.8 12.7 2 3.1
CH RIS H AM N ETT

11 18 502 14 510 2 3 992 2 21.58 5.5 4.7 2 0.8

S ub-total 320 430 302 748 2 17 682 2 5.52 95.1 97.1 2.1
16,17,gov . 16 654 8 933 2 7 721 2 46.36 4.9 2.9 2 2.1
T otal 337 084 311 681 2 25 403 2 7.54 100 100 0

Source: 1981 and 1991 C ensuses of Population, Econom ic A ctiv ity T ables (10 per cent data).
T ab le 5. S ocio-econom ic change in L ondon, 1981± 91: m ales econom ically activ e, em ployed and unem ployed

Percentage
Percentage point
Grouped Percentage change
S EG s 1981 1991 Change change 1981 1991 1981± 91

1,2,13 31 961 35 472 3 511 10.99 16.1 20.4 4.2

3,4 12 697 14 316 1 637 12.91 6.4 8.2 1.8
5,6 43 528 41 361 2 2 167 2 4.98 22.0 23.7 1.7
8,9,12,14 59 809 48 142 2 11 667 2 19.51 30.2 27.6 2 2.6
7,10,15 28 377 21 635 2 6 742 2 23.76 14.3 12.4 2 1.9
11 11 402 7 739 2 3 663 2 32.13 5.7 4.4 2 1.3
SO CIAL PO LA RISA TIO N

S ub-total 187 756 168 665 2 19 091 2 10.17 94.8 96.8 1.9
16,17,gov . 10 225 5 630 2 4 595 2 44.94 5.1 3.2 1.9
T otal 197 981 174 295 2 23 686 2 11.96 100 100 0

Source: 1981 and 1991 C ensuses of Population, Econom ic A ctiv ity T ables (10 per cent data).
1417
1418 CH RIS H AM N ETT
skilled wom en workers, from 18 per cent to
13 per cent: a ® ve-poin t fall. Once again, the
evide nce points strongly tow ards profession-
alisation. There is no evidence of polarisation
in the female occupationa l structure between
1981 and 1991 on the basis of census socio-
econom ic data.
The three sets of changes analysed above
are consistent. They all show a trend towards
professionalisation rather than polarisation.
There is no census evidence at all for occu-
pational polarisation in Greater London
1981±91. There is also no evide nce for ab-
solute grow th of clerical or less-skilled ser-
vice jobs, as Sassen claims. All the
less-skilled groups show ed declines, both for
males and females.
There are two possible counte rs to this.
The ® rst is that pola risation may not have
manifested itself in the 1981±91 decade, but
may have done so earlier. The second is that
it may exist at a more local scale. Given the
nature of Sassen’ s polarisation thesis, both
arguments are quite dubious . First, Sassen
argues that global cities have risen to prom i-
nence in the 1980s with the increased im port-
ance of ® nancial and busine ss services, and
the polarisation thesis is seen as conting ent
on these changes in econom ic structure. If
the changes had not occurred in the 1980s,
they are unlikely to have occurred in the
1960s or 1970s. Secondly, while polarisation
may not be occurring in certain areas or may
be intensi® ed in others, the thesis is a city-
wide one. If it is not occurring at a city-w ide
scale, then its im portance is much dim in-
ished. Finding pola risation in a few neigh-
bourho ods or census tracts would not
establish it as a major social phenom enon.
The analysis below looks at male occu-
pational change 1961±91 for Greater London
as a whole and female occupation al change
1971±91.
The absolute ® gures and absolute change
® gures are not give n as they would add
unnecessarily to the num ber of tables. In-
stead, Table 7 show s the percentage ® gures
for men for each of the four census, overall
percentage point change and overall percent-
age change. The junior and interm ediate
group declined by 33 per cent, 1961±91; the
skilled manual group by 49 per cent; the
semi-skille d and personal service group by
45 per cent; and the unskilled by 65 per cent.
By contrast, the number of managers grew
by 10 per cent and the num ber of pro-
fessional workers by 9 per cent. Table 7 also
show s that the proportion of managers and
professionals has risen consistently in every
intercensal decade. Conve rsely, the manual
groups have fallen more or less consistently
in every intercensal decade. Looke d at over-
all, the proportion of managers and profes-
sionals increased by 11.8 percentage point
over the period 1961±91 (from 16.7 per cent
in 1961 to 28.5 per cent in 1991). This is a
very large increase. Conversely, the share
taken by manual groups and personal service
workers has fallen by 13.2 points (from 57.6
per cent to 44.4 per cent). The proportion in
the interm ediate and junior non-m anual cate-
gories rose by 0.7 percentage points. W here
econom ically active males are concerned, it
is clear that the last 30 years are marked by
a grow ing degree of professionalisation.
There is no evidence of polarisation.
Table 8 show s the comparable ® gures for
wom en, 1971±91. Although the occupational
distribu tion is very different, the overall pat-
tern of changes is similar with a marked
increase in the proportion of wom en in the
professional and managerial categories and a
percentage decrease in all othe r categories.
The number of skilled manual workers fell
by 37 per cent, the semi-skilled by 42 per
cent and unskille d by 29 per cent, com pared
to a rise of 140 per cent for professionals and
managers. In proportionate terms, the pro-
fessional and managerial group almost tre-
bled, rising from 6.3 per cent to 16.9 per cent
of the total num ber of economically active
females.
It may be objected that the census data are
biased in som e way, perhaps because of the
well-know n undercount of young males in
the inner cities in 1991, particularly in inner
London where it may have amounte d to 10
per cent of the total. It is likely to be most
marked among the less skilled trying to avoid
poll tax. I have thus draw n on another
T ab le 6. S ocio-econom ic change in L ondon, 1981± 91: fem ales econom ically activ e, em ploy ed and
unem ploy ed

Percentage
Percentage point
Grouped A bsolute Percentage change
S EG s 1981 1991 change change 1981 1991 1981± 91

1,2,13 10 560 18 598 8 038 76.12 7.6 13.5 5.9

3,4 2 376 4 576 2 200 92.59 1.7 3.3 1.6
5,6 81 408 80 071 2 1 337 2 1.64 58.5 58.3 2 0.2
8,9,12,14 6 239 6 072 2 167 2 2.68 4.5 4.4 2 0.1
7,10,15 24 991 17 995 2 6 996 2 27.99 18.0 13.1 2 4.9
SO CIAL PO LA RISA TIO N

11 7 100 6 771 2 329 2 4.63 5.1 4.9 2 0.2

S ub-total 132 674 134 083 1 409 2 1.06 95.4 97.6 2.2
16,17,gov . 6 429 3 303 2 3 126 2 48.62 4.6 2.4 2 2.2
T otal 139 103 137 386 2 1 717 2 1.23 100 100 0

Source: 1981 and 1991 C ensuses of Population, Econom ic A ctiv ity T ables (10 per cent data).
1419
1420 CH RIS H AM N ETT

Table 7. Proportion ate socio-ec onom ic change in London 1961±91: econom ically active m ales

Percentag e Percentag e Percentag e

point change change
Grouped SEG s 1961 1971 1981 1991 1961±91 1961±91

1,2,13 11.9 13.9 16.1 20.3 8.4 10.3

3,4 4.8 6.0 6.4 8.2 3.4 9.4
5,6 23.0 23.5 22.0 23.7 0.7 2 33.2
8,9,12,1 4 34.8 32.8 30.2 27.6 2 7.2 2 48.7
7,10,15 14.5 13.4 14.3 12.4 2 2.1 2 44.8
11 8.3 7.2 5.8 4.4 2 3.9 2 65.3
Sub-total 97.4 96.9 94.8 97.8 0.4 2 35.8
16,17, gov. 2.6 3.1 5.2 3.2 0.6 2 20.5
Total 100 100 100 100 0 2 35.4

Source: 1961, 1971, 1981, 1991 Censuses of Populatio n (10 per cent tables).

source. Nick Buck (1994) has carried out the national econom y, as the global cities
an analysis of occupational change in thesis would sugge st. (Buck, 1994, p. 8)
London using a Labour Force Survey micro-
W e have then, what in terms of Sassen’ s
data set for 1979 and 1992 and employing
thesis is rather a paradox: grow ing incom e
Esping-A nderson’ s (1993) occupational and
inequality, but no polarisation of the occu-
industrial classi® cation of Fordist and `post-
pational structure. Similar evidence from the
industrial’ occupations. This classi® cation
Netherlands (Hamnett, 1994a ) suggests that
groups managers, clerical and sales, skilled
Britain is not unique in this respect, and
manual and unskille d manual workers as
preliminary evidence for Paris (Preteceille,
`Fordist’ occupations and professional, semi-
1995) agree. Indeed, there is strong evidence
professional, skilled service and unskilled
that, despite the grow th of part-tim e service
service as `post-industria l’ occupations. Buck
jobs, the occupationa l structure of the US is
notes the existence of sampling errors,
becom ing increasingly managerial and pro-
changes in occupational and industrial
fessionalised (W right and M artin, 1987).
classi® cations and the problem s they can
This interpretation is supported by Esping-
pose and, like the census data, his ® gures are
Anderson (1993) who argues that occu-
for residents of London and do not include
pational upgra ding is inherent in the
com muters. This said, he found that in both
post-industrial trajectory of the US. Klooster-
the `Fordist’ and `post-industria l’ hierarchy,
man (1996) adds that
there was a marked grow th at the top end and
a decline at the bottom . As he noted, ª In The trend towards occupational upgrading
sum mary, neither hierarchy show s polariza- does not tell the whole story of the Amer-
tion, in the sense of grow th of top and bot- ican employm ent structure. During the
tom at the expense of the middle º (Buck, 1970s and 1980s, a decoupling seems to
1994, pp. 7±8). He concludes that: have taken place betw een the occupational
level and the wage level in the United
States. According to Esping-A nderson, a
The relative grow th of the service sectors
depola risation of the occupational struc-
has led to an expansion of the upper sec-
ture has been accom panied in the US by a
tions of the hierarchies, including man-
polarisation of wage structure. (Klooster-
agers. W hile unskilled service workers
man, 1996)
have retained their share, in contrast to
unskille d manual workers, they have not To the extent that this is true, and profession-
expanded, either absolutely, or relative to alisation is not merely a statistical artefact of
 SO CIAL PO LA RISA TIO N
Table 8. Proportio nate socio-ec onom ic change in London, 1971±91: econom i-
cally active fem ales
Percentag e
1971 1981
1,2,3,4 6.3 9.3
5,6 56.4 58.5
8,9,12.1 4 6.3 4.5
7,10,15 20.4 18.0
11 6.2 5.1
16,17, gov. 4.4 4.6
Total 100 100
Source: 1971, 1981, 1991 Censuses of Populatio n (10 per cent tables).
the devaluation of job titles which is ac-
com panied by a dow nwards shift in work
skillÐ a question W right conside rs but dis-
missesÐ then the paradox of grow ing incom e
polarisation without occupationa l polaris-
ation may apply to the US as well as to
Britain and other similar countries (see
Clarke and M cNicolas, 1996, for evide nce on
Los Angeles). There is, how ever, a strong
view that of® cial data take no account of
changes in the meaning of job titles or the
conte nt of job categories and it is argued that
the reality is one of deprofessionalisation
rather than professionalisation (Bruegel and
Lyons, 1985). W hile this may be true to
som e extent, I think it is highly questiona ble
to argue that deprofessionalisation casts
doubt on professionalisation, but not on the
evide nce for polarisation (which involve s
grow th at both the top and bottom ends).
Either the number of managers and profes-
sionals is increasing, or it is not. It cannot be
argued both ways as som e attempt to do.
Incom e Inequality W ithout Occupational
Polarisation: An Attempt to Explain the
Paradox
It has been shown that incom e inequa lity
grew in London during the 1980s, but that
the occupationa l structure shows no sign of
polarisation. How and why has this com e
about and what light does it shed on Sassen’ s
thesis of econom ic restructuring as the major
1421
Percentag e
point Percentag e
change change
1991 1961±91 1961±91
16.9 10.6 1 140.4
58.3 1.9 2 7.4
4.4 2 1.8 2 36.9
13.1 2 7.3 2 42.5
4.9 2 1.3 2 28.7
2.4 2 2.0 2 51.6
100 0 2 10.4
driving force of pola risation? At this stage, it
is im porta nt to return to the argum ents re-
garding state monetary, ® scal and welfare
policies and their im portanc e for incom es
and occupational structures. Buck (1994, p.
6) has suggested that
Globa l cities argum ents focus on polaris-
ation within occupational hierarchies, and
would argue that these are what is speci® c
to large cities. On the other hand one
might expect changing patterns of employ-
ment and inactivity, as well as the relative
incom es of these groups to the employe d
popula tion, to depend largely on state pol-
icy and national economic performance.
In an attempt to shed som e empirical light on
the im porta nce of changing patterns of em-
ploym ent and on welfare policy, Buck at-
tempted to analyse the rapid grow th of
household incom e inequality in London us-
ing FES micro-data sets. He found, looking
at all house holds, that whereas the inter-
decile ratio betw een the incom es of the low-
est and the highest decile in London and the
UK was very similar during 1978±80 at 3.85
and 3.75 respectively, the ratios rose to 8.17
and 5.94 during 1989±91. In London, the
inter-decile ratio had more than double d in a
decade. The inter-decile ratio rose sharply in
the UK as a whole , but it rose far more
sharply in London (Table 9).
Buck (1994) also presented ® gures for
households with an employed `head’ . These
1422 CH RIS H AM N ETT

Table 9. Incom e distribut ion measures: Greater London and the UK 1978±81
and 1989±91

Lowest H ighest Inter-dec ile

decile M edian decile ratio

A ll househo lds
1978± 80
G reater London £50.5 £107.8 £194.3 3.85
UK £45.1 £93.5 £169.0 3.75
G L/UK 1.12 1.15 1.15 1.03
1989± 91
G reater London £88.2 £322.4 £720.6 8.17
UK £91.3 £256.4 £542.0 5.94
G L/UK 0.97 1.26 1.33 1.38

H ousehol ds with employed `head’

1978± 80
G reater London £65.3 £120.0 £204.8 3.14
UK £61.2 £103.7 £179.5 2.94
G L/UK 1.07 1.16 1.14 1.07
1989± 91
G reater London £188.2 £399.0 £791.0 4.21
UK £157.7 £310.0 £604.2 3.83
G L/UK 1.19 1.29 1.31 1.10
Source: Family Expendit ure Survey (m icro-dat a).

® gures show that the inter-decile ratio for
Greater London for 1978±80 was 3.14 com-
pared to 2.94 for the UK as a whole. By
1988±91, the inter-decile ratios had risen to
4.21 and 3.83 respectively: a marked in-
crease, but not as great as that for all house-
holds.
The differences in the tw o sets of ® gures
suggest that while the increase in incom e
inequality was greater in London than in the
UK as a whole, the increase in incom e in-
equality was much greater for all house holds
than for households with an employe d head.
This suggests that the causes of greater in-
com e inequality in both London and in the
UK as a whole lie as much outside employ-
ment as they do within it. Buck com ments
that
There is no evidence of any distinc tive
change in incom e inequality among the
employe d population in London, and we
might be better looking at nationa l expla-
nations of change. The conclusion one
could draw is that what appears speci® c to
London is not changing occupational in-
equality but changing patterns of in-
equality between the employed popula tion
and in Esping-A nderson’ s terms the
ª outside r surplus popula tionº . (Buck,
1994, p. 5)
Buck examined a num ber of factors which
might explain the differences in inter-decile
change ratios betw een London and Britain as
a whole. He argued that a major part of the
rise in earnings inequality since the 1970s
was com mon across the country , althoug h
London did show a greater change. But he
show ed that while unem ploym ent and inac-
tivity rates had risen sharply across Britain
from 1979 to 1992, they had risen much
more rapidly in London.
W hereas in 1979 London enjoye d
markedly lower rates than the country as a
whole , by 1992 it had markedly higher
rates. Thus for men the London rate was
20 per cent below the national rate in
1979, but by 1992 it was 20 per cent
above. For wom en the change is even
more extreme. (Buck, 1994, p. 10)
 SO CIAL PO LA RISA TIO N
He also found, using a household-le vel
de® nition of unem ploym ent and inactivity,
that in 1979 around 7.5 per cent of the
working- age households in both London and
the UK had no employed workers. By 1992
this had increased to 15.6 per cent in the UK
and 19.2 per cent in London. He argued that
It is in the grow th of the `outsider surplus
population’ that London has experienced a
change that is distinctive compared to the
nation as a whole, and to a much greater
degree than changes within the employed
labour market. (Buck, 1994, p. 11)
To con® rm this interpretation he undertook
decom positio n analysis of incom e inequa lity
change. This showed ® rst that the contribu-
tion of differences in employm ent status be-
tw een households with an employed `head’
and those with an inactive or unem ployed
head as the major factor in explaining change
in incom e inequality, but that its im portanc e
was almost tw ice as marked in London as in
the UK as a whole. This, says Buck, re¯ ects
both the higher grow th of unem ploym ent
in London, but also the higher and more
rapidly rising incom es of those in work,
which sets them at a greater distance in
London than elsewhere from those on state
welfare bene® ts. (Buck, 1994, p. 12)
The occupation al differences contributed to
the grow th of incom e inequality, but they
had a relatively minor effect com pared to the
changing patterns of unem ploym ent. Buck
(1993) has also underta ken com parative
work on the scale and causes of incom e
polarisation in New York and London and
has found that changes in occupational struc-
ture were a more im porta nt cause of incom e
polarisation in New York than in London
where the grow th of unem ploym ent and
econom ic inactivity proved more im portant.
At this point, it is appropriate to try to gener-
alise the argum ent.
Econom ic Restructuring, W elfare Regim es
and Social Polarisation
Sassen does touc h on the issue of welfare
1423
state policy. She says in the introdu ction to
The Global City that one of its key questions
concerns the relationship between state and
city where strong links exist between a city
and the world econom y (Sassen, 1991, p.
14). Her answer is clear. She is of the view
that: ª the nation state is becom ing a less
central actor in the worldº (p. 167), and that
the welfare state is less im porta nt under the
ª new econom ic regim eº (p. 338). She argues
that there has been a general trend towards
the ª dism antling of a system that provide d a
measure of job security, health bene® ts, and
othe r com pone nts of a social wage to a criti-
cal mass of workersº (p. 333) and she sug-
gests that this raises several questions about
the intersection of econom ics and politics
and the state and about the ª naturalº tenden-
cies of capitalist econom ies. She asks if in-
creasing econom ic and social pola risation ª is
the `natural’ outc om e of the operation of the
econom ic system when politica l claims carry
little weightº (p. 334).
Sassen is quite correct that there has been
a tendency towards the dismantling of the
social welfare system in a num ber of capital-
ist countries, but I would question that there
has been: ª a generalized dism antlingº or a
grow th of incom e polarisation in all coun-
tries (see Hills, 1995, and Gardiner, 1993, for
a discussion). The signi® cance of the welfare
state has varied conside rably from country to
country , as do the extent and the pace of the
retreat from the welfare state. In order to
appreciate the causes of variations in social
pola risation, it is necessary to focus on dif-
ferences in welfare state regim es, including
the availability and level of social bene® ts,
the extent of collective consum ption such as
education, health and child care, state labour
market intervention and the like.
Econom ic restructuring is extrem ely im -
portant as a major force shaping the nature of
W estern capitalist countries, but econom ic
restructuring does not occur in a social and
political vacuum. On the contrary, it every-
where and always takes place within the
context of nation states with different regula-
tory regim es, legal structures and welfare
1424 CH RIS H AM N ETT

policie s and with different nationa l and local has been no national conve rgence in social
cultures. The outcom es of globa l economic variations in socio-econom ic trends.
restructuring are essentially variable depend-
She quotes Howell (1992) as saying
ing on the ways in which restructuring pro-
cesses are mediated within different states. It is alm ost a truism of comparative politi-
Different structures of welfare and labour cal econom y that econom ic im peratives
market practices will cushion the im pacts in create basic constraints on states but do
different ways. They can also have an inde- not determine the way in which states
pendent effect. As Kloosterman (1996) must deal with those constraints. (Howell,
points out 1992; quote d in Silver, 1993, p. 339)
Silver goes on to argue that states indirectly
Descending from global logic to nationa l
shape the social structures through trade and
and local variation¼ does not necessarily
industrial policie s such as labour law and
im ply that the outcom es of economic re-
industrial relations policies that in¯ uence na-
structuring will be identic al in every ad-
tional labour markets. She instances grow th
vanced city. Differences in the economic
of a ¯ exible workforce in the US and the UK
base, the national institut ional framework
com pared to France where the Labour Code
and urban policy have contributed to a
retarded its developm ent. She also argues
variety of urban experiences in the 1980s.
that states directly in¯ uence social structures
(Klooste rman, 1996, p. 1)
through welfare progra mmes and tax struc-
tures which redistribute wealth (see also
It has long been recognised in the social
Hamnett, 1996, forthcoming).
policy sphere that variations in state welfare
Silver conclude s by pointin g out that, in
structures and policie s are of major im port-
recent years, the globalisation of markets and
ance in shaping the patterns of social out-
rising unem ploym ent have led many to be-
com es. The US has virtually no public
lieve in the econom ic im pote nce of nation
housing , whereas the UK, Sweden, the
states. Silve r argues on the contrary, that
Netherlands, France and Germany all have a
nation states
large social housin g sector (though now un-
der threat in som e countries). Thus, out- Remain a vital mode of econom ic organi-
com es in terms of social and residential zation within the emerging international
segregation are likely to be very different divisio n of labour¼ By modifyin g com -
(Harloe and Martens, 1985; Harloe, 1993). mon global forces in produc t and labour
Hilary Silver (1993) sugge sts that inter- markets and through redistributa tive wel-
national econom ic restructuring has led to fare polic ies, nation-states continue to vary
similar changes in employm ent and incom e in their social structures. W hile undergo-
structure in Britain, France and the US. ing similar social trends, nationa l conve r-
There is a shift from manufacturing to ser- gence is muted. (Silve r, 1993, p. 348)
vices; the absolute share of credentialled
Sim ilar argum ents have been put forward by
workers increased; more jobs became more
Lash and Urry (1993) regarding polarisation.
insecure; organised labour declined in mem-
They argue that the process of `re¯ exive
bership; female labour force participation
accumulation’ in capitalist society that give s
rates rose; regional employm ent opportu ni-
rise to a large service class and a smaller
ties dive rged; and unem ploym ent, incom e
working class also give s rise to a new low er
inequality and poverty all increased. But she
class. But they also argue that these kinds of
argues that
structural change do not always lead to the
developm ent of an unde rclass or a large-
W hile all these trends move in the same
scale lower class. Instead, they argue that
direction, they also proceeded at different
rates in different countries, so that there the extent of underclass and new low er
 SO CIAL PO LA RISA TIO N
class formation depends on a de® cit of
institutiona l regula tion in econom y and
society. (Lash and Urry, 1993, p. 146)
and suggest that in societies such as Sw eden
and Germany, different institutional set-ups
lead to
a different outcom e, that is to a preser-
vation of quite a large working class and a
much more lim ited developm ent of a new
lower class. (Lash and Urry, 1993, p. 146)
By far the most important work for my argu-
ment, how ever, is that of Esping-A nderson
and his colleagues (1993). His earlier (1990)
work on welfare state regim es is well know n.
He argued, on the basis of labour and social
security policies, that it was possible to
group countries into three major types
depending on the character of their welfare
regim es. Esping-Anderson’ s more recent
work (1993) on com parative changes in class
structure and mobility in different welfare
regim es takes this argum ent further to argue
that ª conte mporary social strati® cation is
heavily shaped by institutions, the welfare
state in particularº (p. 1).
The argum ent advanced by Esping-A nder-
son and colleagues is that the welfare state
revolutionise d the structure of the labour
market and labour market behaviour. They
argue that the social wage violate s the as-
sum ption that classes and life chances can be
identi® ed through com mon labour market
condition s, in that welfare states introdu ce
the possibility of a ª welfare state client
classº (p. 19). They also argue that
The sometimes massive expansion of wel-
fare state employment implies not only new
occupational groups, but also the emerg-
ence of a huge production and reward sys-
tem isolated from the operation of market
forces. (Esping-Anderson, 1993, p. 19)
They argue that this expansion manifests it-
self not just by education and training pro-
grammes, but also by labour market
measures and direct welfare state employ-
ment grow th. They note that in Scandina via,
welfare state employm ent grow th accounts
1425
for ª almost the entire net employm ent in-
crease over the past decadesº (p. 19). They
also note that welfare state institutions dic-
tate the choice of non-e ntry via the provision
of a social wage and tax and service treat-
ment of households and their im pact on child
care and working wom en. Finally, they sug-
gest that the welfare state also furnishes the
basic means for labour market exit through
the introdu ction of early retirement which
provide s many redundant workers with the
option of a social wage rather than having to
move into bottom -end jobs. In sum
The structure of the welfare state is a key
feature in the contem porary process of
social strati® cation: it creates and abol-
ishes `empty slots’ , it helps decide who
® lls them and how they are to be re-
warded, it de® nes what is unde rtaken
within them, and, ® nally, it shapes the
pattern of mobility between them. (Esping-
Anderson, 1993, p. 20)
The principal im plication of this analysis is
that there are marked differences between the
occupational and incom e structures of differ-
ent W estern capitalist countries. They argue
that while the Scandinavian countries:
ª exemplify an extrem e case of a gendered,
welfare state service-led trajectoryº , Canada
and the US are characterised by their ª large
low-end consumer service labour marketº
(Esping-A nderson, 1993, p. 4). They sugge st
that
In North America, unskilled service jobs
tend to be very poorly paid, predom inantly
® lled by youth and im migrants, and func-
tion very much as ® rst-entry, or stop-ga p
jobs. In both (Canada and the US) a dis-
tinct low-end mobility circuit emerges
which is unpa ralleled elsewhere: unskille d
sales, clerical and service jobs appear to
constitute a com mon job reservoir for peo-
ple with low education. (Esping-A nderson,
1993, p. 5)
They add that the welfare state, the industrial
relations system and education are key insti-
tutiona l ® lters for employm ent structuration,
noting that
1426 CH RIS H AM N ETT
If the welfare state is service intensive, it
will bias service employm ent trends; if it
provide s a high social wage guarantee, the
scope for a low-wage-based service econ-
omy is sharply reduced. (Esping-Anderson,
1993, p. 33)
They point out that where trade unions are
centralised, strong and bargain nationally, as
in Germany and Scandinavia, the employ-
ment outcom e will be very different from
that in North America where unions tend to
be weak, fragmented and localised. In these
circum stances, a low -paid, low -skilled stra-
tum of workers is more likely to develop.
Esping-Anderson and his colleagues un-
dertook a com parison of trends in class struc-
turation in six countries in the 1960s and the
1980s. They assess the professionalisation,
prole tarianisation and the polarisation theses
using an occupation al classi® cation which
groups occupations into `Fordist’ and `post-
industrial’ categories. The countries they
examine are Canada, Germany, Norway,
Sw eden, the UK and the US. They note that,
at one extreme, the US and Canada (and to a
lesser degree, the UK) have relatively re-
sidual welfare states, characterised by only a
low social wage guarantee and by a passive
approa ch to full employm ent policy. At the
other extreme, they note that Norway and
Sw eden have welfare state and industrial re-
lations institut ions that are
Explicitly designed to in¯ uence the em-
ploym ent structure. The social wage
guarantee is extraordinarily high, thus re-
ducing the individu al’ s compulsion to ac-
cept unattractive jobs; both welfare states
feature a strong com mitm ent to collective
services, thus directing employm ent to-
wards welfare state service jobs. In both
cases we ® nd com prehensive and central-
ized trade union systems which, for
decades, have pursue d solida ristic wage
bargaining policie s aimed at minim izing
earnings differentials. (Esping-A nderson,
1993, p. 35)
They argue that Germany represents a third
regim e with a welfare state which is both
generous and com prehensive but where so-
cial rights are strictly tied to employm ent
record and there is a strong com mitm ent to
preserve the traditional caring functions of
the family. Thus, there is a bias against col-
lective social services, except health, and an
im plicit discouragem ent of female labour
market participation. Clearly, this is an ideal-
type schema which ® ts countries unevenly,
but Esping-A nderson argues that one of the
characteristics of strong welfare states is that
they tend to produce a relatively large
ª outsider surplus popula tionº , consisting of
people unable to enter into employm ent, of
early retirees, long-te rm unem ploye d and
othe rs subsisting on the social wage. This
conclusion is supported by Burgers’ (1996)
analysis of the im plications of the unemploy-
ment and disability bene® t system for the
form of social pola risation in the Netherlands
which has an increasingly professionalised
employe d workforc e and a large group of the
unemployed and econom ically inactive. In
countries such as the US, on the othe r hand,
where the welfare state is weaker, there is a
large, low-wage, service proletariat. Thus,
post-industrial societies can experience tw o
alternative kinds of polarisation. In the strong
welfare states, the polarisation is betw een
A small, but highly upgra ded insider struc-
ture and a large outsider surplus popu-
lation. In the othe r case, a large service
class proletariat will constitute the pivotal
source of polarization. (Esping-A nderson,
1993, p. 28)
It is not possible to sum marise all their
® ndings, but they examined the degree of
pola risation by exam ining the changing ratio
of top±bottom jobs within the Fordist and the
post-industrial occupational hierarchy. In the
Fordist hierarchy, they took the ratio of un-
skilled manual workers over managers; and
in the `post-industrial’ , they took unskille d
service workers over professionals. They ex-
amined the declining middle thesis by taking
the percentage share of the middle within
each of the two hierarchies. Lookin g at the
top±bottom ratio in the hierarchies, they
found ª a clearly declining degree of pola riza-
 SO CIAL PO LA RISA TIO N
tionº , particularly in the Fordist hierarchy
owing to the decline of unskille d workers.
They also found that the percentage share of
the middle groups increased in all countries
bar Sweden which saw a sharp increase in
the middle of the Fordist groups.
They were only able to study the occu-
pational earnings structure for Germany,
Sw eden and the US, but they state that
The pervasive low-wage effect on job
trends within the American consum er ser-
vice sector stands out clearly. The Ameri-
can earnings distribu tion is alm ost the
exact opposite of the German. Instead of
an extraordinarily privile ged top, the
United States is characterized by its ex-
tremely under-privile ged bottom . The un-
skilled service workers are¼ a very badly
paid workforce. (Esping-A nderson, 1993,
p. 50)
They argue, more contentiously, that com-
paring the 1960 and 1988 earnings distri-
bution in the US
There does not appear to be much suppor t
for the declining middle thesis since ex-
actly the opposite has happened: in every
case, the middle-layer occupations have
im proved relatively while the top levels
have lost. (Esping-A nderson, 1993, p. 51)
They conclude by arguing that
The Fordist hierarchy has everywhere ex-
perienced a marked decline of the tra-
ditiona l manual working class; to a degree
this has been offset by a modest rise in
clerical and sales occupations. Fordism is,
so to speak, becom ing post-industrial-
ized¼ Despite the divergent shape of the
post-industrial hierarchy, there is very lit-
tle evidence to suggest strong polarization.
Everywhere, the trend favours higher
grade occupations such that the shape of
the post-industria l occupational hierarchy
is biased towards the top and the middle
rather than the bottom . (Esping-A nderson,
1993, p. 53)
It is clear from this analysis that the US is
distinctive in the im porta nce of its low-
1427
skilled and low -paid consum er service jobs.
M y argum ent is that Sassen has neglected the
crucial role of different welfare state systems
in the production on social polarisation, and
has erroneously generalised from the US ex-
perience to global cities in other societies
where the form of the welfare state has pro-
duced a range of very different outcom es.
Immigration, Low -wage Job s and Polaris-
ation in the US
I also wish to argue that the American situ-
ation is very different because of the large
and continu ing volum e of new im migrants
who help to swell the ranks of new entrants
into low-paid consum er service jobs. Esping-
Anderson notes that minoritie s occupy a dis-
proportionate share of these jobs, and Soja
and Scott (1986) point out that
Over the past twenty years¼ nearly 2 mil-
lion im migrants from the Third W orld
(Latin America and Asia especially) have
moved into the Los Angeles region, cre-
ating what is perhaps the largest ¯ oating
pool of cheap unskilled labor in any ad-
vanced capitalist city. This localized labor
pool (conta ining a high proportion of un-
docum ented workers) reproduc es many of
the conditions of Third W orld labor mar-
kets and plays a vital role in the sweatshop
econom y of the city¼ (it) swells the bur-
geoning service sector¼ provide s cheap
dom estic services for the¼ wealthy’ . (Soja
and Scott, 1986, p. 253)
The role of ethnic minoritie s in pola risation
receives considerable attention from Sassen
(1991, pp. 299±317). She states that
It is im possible to disregard the facts of
race and nationality in an exam ination of
social and econom ic processes in New
York. To a lesser extent this is also the
case with London. (Sassen, 1991, p. 299)
Sassen adds that
The large in¯ ux of im migrants into the
United States from low -wage countries
over the last ® fteen years cannot be unde r-
1428 CH RIS H AM N ETT
stood separately from this re-structuring.
(Sassen, 1991, p. 316)
Sassen is quite correct in this. The problem
concerns the nature of the causal process. As
I have argued elsewhere (Hamnett, 1994a ),
Sassen argues that it is the expansion of
low -wage jobs that has led to the grow th of
im migration.
The expansion in the supply of low -wage
jobs generated by the major grow th sectors
is one of the key factors in the continu-
ation of the ever-higher levels of the cur-
rent im migration . (Sassen, 1991, p. 316)
In other words, econom ic restructuring has
led to change s in labour demand and migrant
¯ ow s. She is opposed to the reverse expla-
nation, namely that the existence of large-
scale im migration from low-wage countries
has enabled the grow th of low-wage service
jobs. She argues that advanced capitalism
ª may promote conditions for inform alisation.
The presence of large im migrant com muni-
ties¼ can be seen as mediating in the process
of inform alization rather than directly gener-
ating itº (p. 282) and ª it is the econom y
rather than im migrants which is producing
low -wage jobsº .
I have considerable sym pathy with this
argument, partly for political reasons, in that
it is easy to slip into a right-w ing, anti-im mi-
grant stance, blam ing im migrants for under-
cutting wages. I ® nd it dif® cult, however, to
overloo k the fact that the US, particularly
the major cities, has a level of immigration
unpara llelled in most other W estern coun-
tries, and that it is also almost the only
W estern country to have seen the rapid
grow th of large num bers of low -wage service
jobs. Sassen refers to ª the vast supply of
low -wage jobs required by high incom e gen-
tri® cation in its residential and com mercial
settingsº (Sassen, 1991, p. 9).
M any of these jobs are, of course, com-
mon to all W estern cities, particularly globa l
cities, but New York and Los Angeles are
perhaps unique in the ease with which it is
possible to hire cheap im migrant labour to
underta ke low -paid consumer service jobs. In
part, they have no other option. The welfare
bene® ts available in the Netherlands, Scandi-
navia, Germany and, to a lesser extent, in
Britain, are simply not available at the same
level in the US. To this extent, occupational
pola risation in the US may be the produc t of
both the nature of the welfare state and a
high level of im migration from low-wage
countries. I am not alone in making this
suggestion. Addressing the suggestion of
why: `increasing inequality apparently pro-
duces a shrinking middle in the US and a
fattening middle in the UK’ , Pahl (1988,
p. 260) stated that
The answer presum ably lies in the differ-
ent household structures and patterns of
incom e in the tw o societies and in particu-
lar, the role of illegal im migrants and es-
tablishe d ethnic minorities that make
distinctive im pacts on labour markets and
who also have distinctive family house-
hold structures. The different systems of
welfare will also be crucially im portant.
The core of my argum ent is that while
Sassen may be right that, in New York and
Los Angeles, there is occupational and in-
com e polarisation within the paid labour
force, the evidence from other W estern cities
does not support this. In most large non-
American cities, grow ing incom e inequality
is com bine d with professionalisation of the
paid labour force. This is not to suggest, of
course, that large and grow ing num bers of
people are not experiencing low incom es.
Rather, it is to argue that, in countries with
stronger welfare states, a larger proportion of
the popula tion may be able to live outside the
paid labour force on state bene® ts. I accept,
of course, that in a grow ing num ber of W est-
ern countries the welfare state is under grave
threat. W e may be facing the sort of future
currently found in New York and Los Ange-
les. But, this is not simply a result of the
unm ediated operation of market forces and
privatisation. It is also an outcom e of the
historical legacy and also of politica l struggle
to preserve welfare states against neo-liberal
econom ic pressures. As Dieleman and Ham-
nett (1994) have observed, ª there is no single
 SO CIAL PO LA RISA TIO N
global city, only global cities, located within
the context of their ow n particular nation
state.º W e have to bring the state, the struc-
ture of civil society and politic al strategy
back into discussions of polarisation
alongsid e econom ic restructuring.
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