New Economy

[Jim heartfield]

In message <p04310101b534a1a8aa68@[216.254.77.128]>, Doug Henwood
<dhenwood at panix.com> writes
>
>A lot of the New Economy rhetoric is just a cover for a "flexible" 
>labor market - i.e., a big low-wage sector. Eileen Appelbaum of EPI 
>once said that the major difference between the U.S. and German 
>national accounts, as far as she could tell, was a much higher level 
>of purchased household services in the U.S. - fast food, laundry 
>services, out-of-pocket health care, etc. In other words, the use of 
>low wage labor by middle- and upper-income HHs.

There is a parallel in the UK.

London boroughs that abut the City of London (ie the financial district)
have for a few years now been trying to promote the 'City Fringe' as an
area of service industries for the City - cleaning firms, security, and
so on.

This supine version of local Keynesianism, though, isn't very
successful. What happens mostly is that the boroughs of Hackney and
Tower Hamlets have vast swathes of unemployed, largely immigrant
populations in social housing, with a southern fringe of yuppies.

The boroughs tried to encourage new (service) industries in the 'City
Fringe' (only they use this terminology) by encouraging offices
building. But new offices were not used, they just forced down the price
of office space, until they were converted into high rent apartments.

The boroughs' nightmare is that there would be yuppies on one side and
the underclass on the other, with nothing in between.

That said, though, there is rising employment, greater use of services,
greater proportion of household expend. on services. etc etc. Not all of
this is low paid work. There does seem to be a lot of well-paid work out
there.

All this alongside a reported fall in manufacturing employment of 250
000 in the period since New Labour took office.

-- 
Jim heartfield