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Roula Khalaf, Editor of the FT, selects her favorite stories in this weekly newspaper.
We often talk about the housing affordability and related economic problems facing young adults as if they are the same in every developed western country. Inadequate housing construction has driven up rents and prices, leading to overheated housing markets that leave twenty- and thirty-somethings forced to choose between a broken income bank and broken dreams.
On the surface, the conditions in different countries look similar. In America, rising prices and housing prices have caused a group of young people to leave famous cities like San Francisco and New York and head for the likes of Austin and Denver. In Britain, those leaving London are going to cities like Bristol.
But, if it is not immediately apparent, this migration is not the same.
Suppose a high-flying young Briton – defined for the purposes of this argument as someone in the 75th place on the income spectrum among under-40s – chooses Bristol over London to avoid eye rent and seven-figure home prices. . Indeed, their living expenses would be low, but their income would be very high. Housing costs included, choosing a cheap house in Bristol would still result in a 23% reduction in income, according to my calculations.
On the other hand, the same young American renting in New York can go to very cheap Denver and end up better off overall, or head south to Austin and be 1 percent worse off. two at the end of the month. This speaks to the incredible and growing power of America’s second-tier cities.
This gap in alternatives highlights the unspoken half of any housing problem, and particularly in Britain – it is about the availability of good jobs as well as house prices and rental costs. .
For students looking for a successful, high-paying career, America offers many avenues in many areas. In the UK, it’s growing in London or exploding and getting bigger. Less than half of Britain’s highest paying jobs were in London 30 years ago. Today that number is about 75 percent. Top wages have fallen sharply in the US, and are not growing as much.
In fact, the share of American skilled worker jobs to be found in New York and California has been declining in recent years. Instead these features are becoming more common in states like Texas.
On the other hand, the UK is the only western member of the G7 where good jobs have been concentrated in the aerospace sector for the past two decades. Le mono-polar France is no longer the center of Paris while Lyon continues to follow the share of top jobs. And although it is true that Japan continues to be the center of Tokyo, at least they are building houses.
The high cost of housing in big cities is a common problem today, but young Brits face the unique and toxic contrast of living in a looted capital that is also the only place where high-quality work is available. possible. This makes it vital that two of the Labor government’s main policies are successful.
First, design changes which are set to usher in a new era of house building across the UK is one important step in reducing the pressures on young adults. However, people need fulfilling jobs, not just cheap rent. Here are some steps to surrender power distance from London and strengthening the towns to compete with the capital are also important.
A report last week showed that Britain has the highest proportion of workers who are highly qualified for their jobs in all OECD countries. It is thought that the number of student jobs in its capital is largely to blame for this.
If you want to avoid the destruction of the faith of the youth for them to succeed, you have to fulfill the public promise that if they work hard, they will get the future they have worked for.
