For centuries, London has been the work capital of the world

Brick Lane in London’s East End, 2008. Image: Getty.

In Migrant City: A New History of London, Panikos Panayi explores the role immigration has played in the capital's development. In this extract, he looks at the role the city's economy had in attracting migrants.

The freedoms of London, especially in contrast to European cities, acted as a key factor in attracting all manner of refugees to the metropolis: the exiles escaping the French Revolution in the 1790s,3 German revolutionaries in the Victorian period, governments in exile during the Second World War, those fleeing persecution in the Cold War, and the global crisis which followed the end of this conflict from the end of the 1990s – even though, by this time, British refugee policy limited and controlled those who could enter and settle in London.

However, this book has revealed London as the work capital of Britain and Europe and, for much of the past two hundred years, the world. The numerous personal accounts quoted essentially tell the story of foreigners moving to London in search of employment, as that remains the main motivation for migration for the vast majority of those who have settled in the metropolis. Once again, the economic significance of London, its size and the scale of the economy have all combined together to bring in people from all over the world working in all manner of occupations throughout the social scale and, increasingly, throughout the entire geographical area covered by the metropolis.

One of the unique factors about this city lies in its ability to attract people throughout the economic and social scale. The idea of London acting as a magnet for cheap labour offers just one explanation as to why this metropolis has proved such an important global magnet. Clearly, most of those who have entered the city seeking employment have worked in low-end manual and service-sector jobs since the 18th century, as the example of the long history of the Irish in the London building trade demonstrates. However, numerous other social groups have settled in the city. Few other international urban centres could claim the range and scale of global elites.

The importance of London as an international financial centre from the 18th century has proved fundamental, a status which European Jews helped to cement from the Napoleonic period onwards and which attracted bankers from other parts of Europe over the following century. The proportion of foreign bankers may have remained stable or declined during the course of the 20th centurym but the ‘Big Bang’ in financial services at the end of that century gave the City of London a new lease of life and power comparable with its Victorian and Edwardian status. This in turn helped to create a new service sector to provide for the needs of the growing international bourgeoisie with a key centre in the City, whether, for example, as cleaners or restaurant staff.

But these elites have also included individuals who moved to London directly as a consequence of the opportunities which the presence of British and international bankers provided. The arrival of classical musicians from the early 18th century occurred because of the employment opportunities which no other city could offer, because none had such a developed middle and upper middle class, both foreign and domestic born. The presence of a large bourgeoisie offered all types of job openings from those working in classical music to those who founded the restaurant trade as waiters, cooks and owners. 

Musicians and waiters filled a skills gap. Trained in occupations which had emerged on the European continent, they transferred their abilities to the European city where the greatest economic opportunities existed. As we have seen, during the course of the 20th century London also attracted a new group of musicians from Black America and the West Indies in particular, who imported jazz but also helped to develop musical forms such as ska and reggae.

Similarly, the presence of a dozen football teams in London meant that it had become well positioned to develop some of the most globalised football teams in the world whether in terms of ownership or from the point of view of the playing staff. Arsenal and Chelsea in particular illustrate this process.

But between Nathan Mayer Rothschild, as a banking elite, and Didier Drogba, as a sporting superstar, the Irish builders from the 18th century onwards and the South Asian women preparing aeroplane food in West London in the second half of the 20th century, come numerous others. They have settled in London and established all types of small businesses, from the Jewish and Irish street-peddlers interviewed by Henry Mayhew, many of whom existed on tiny profit margins (if any), to the plethora of migrant shopkeepers and restaurant owners residing in the capital in the second half of the 20th century.

The size of the London economy therefore offers the key explanation as to why people from all over the globe have settled to work in such a wide range of occupations throughout the social scale. While the international importance of the London economy determines its size, this globality is also reflected in the range of occupations which foreigners undertake within the city. But the central point to re-emphasise here is the position of London as work capital. Those who have settled in the metropolis have usually devoted their lives to work, the reason they moved.

The Irish navvies who have settled in the capital since the 18th century did so for the purpose of labouring in London’s streets, a pattern which continued into the second half of the 20th century. The life of Donall MacAmlaigh, one of hundreds of thousands of Irishmen working in the London building trade over centuries, offers just one example of the centrality of employment for manual workers who surrendered their rural existence for a supposedly better life, even though the reality of employment proved different. Many of MacAmlaigh’s post-war single male contemporaries worked long hours and spent much of their leisure time simply drinking, although other Irishmen and women established a better equilibrium in their lives.

Meanwhile, higher up the social scale, the life of the Turkish Cypriot immigrant Asil Nadir offers an example of another individual whose London life essentially revolved around work, on this occasion through the establishment of an international business empire, which, however, crashed in the 1990s. Clyde Best’s life revolved around football, an artist much like the classical music performers who migrated to London in pursuit of their artistic goals. Idolised by West Ham fans in the early 1970s, his career would fizzle out in the second half of that decade when he moved to the United States.

These examples demonstrate that the London economy has, for centuries, had an insatiable appetite for labour. Until the 20thcentury those who settled in the capital were primarily English people who would often pay with their lives in their search for employment because of the insanitary conditions existing there. The examples of the Irish drinkers and the failed businessmen such as Asil Nadir demonstrate that the London economy eats up and spits out people on all parts of the social scale. Working hard, the purpose of moving to the capital, does not guarantee success or social mobility. African cleaners who take on several jobs at once to make ends meet seem to have little prospect of achieving social mobility because of both racism and the fact that they cannot earn and save enough money to purchase a house.

Migrant City: A New History of London is published in hardback on 25 February.

How the pandemic is magnifying structural problems in America's housing market

Justin Sullivan/Getty Images

Long before Covid-19, the United States suffered from a housing crisis. Across the country, working class and low-income Americans struggled to pay rent, while the possibility of home ownership receded into fantasy. In hot markets, affordability became a struggle for even the middle class: In California, 41 percent of the population spends over a third of their income on housing costs. 

The coronavirus pandemic will only make these trends worse as millions are unable to work and the economy dives into a recession. Building could slow down in the medium term, as construction loans (risky bets in the best of times) become harder to come by. Unsubsidised affordable housing is often owned by small landlords, who are more likely to struggle during recessions, prompting flips to home ownership or sales to rental empires. 

New York Times reporter Conor Dougherty documented America’s longstanding housing crisis – and California’s efforts to battle it – in his book Golden Gates, which debuted just before the pandemic hit. “My sense is that right now coronavirus is magnifying a lot of things that were already happening,” Dougherty says.  

While Covid-19 adds new pressures, he says that many of the same issues we were facing still loom over the issue, from developers crowding the higher end of the market, to escalating construction costs, to stagnating wages and vulnerable service-sector jobs that leave ordinary Americans struggling to keep a roof over their heads. “That’s my larger message,” Dougherty says. “I think the structural problems continue to be a much bigger deal than the cyclical problem in housing.”

CityMetric spoke with Dougherty about how his thinking has changed since Covid-19, Donald Trump’s pro-suburban rhetoric, and the apparent exodus from San Francisco. 

I’ve really been struck by how strong the housing market seems to be despite the epic economic crisis we are facing. Costs seem to be higher everywhere. I've heard realtors talk about bidding wars like they haven't seen before in Philly, where I live. But perhaps that's just pent up demand from the big shutdowns?

What you have is an economy that has bifurcated. You have fewer middle-income jobs, more lower-income service jobs, and more higher-end jobs in software and finance. That's how our economy looks and that's a problem that is going to take the rest of our lives to solve. In the meantime, we have this housing market where one group of people have so much more money to spend than this other group. Cities reflect that. 

What's important about this bifurcation isn't just that you have gross inequality, but that these people have to live next to each other. You cannot be someone's Uber driver and telecommute. You cannot clean someone's house remotely. These lower-end service workers have to occupy the same general housing market as the super-high-end workers. 

All the pandemic has done is thrown that even more out of whack by creating a situation where one group of people is buying and expanding homes or lowering their home cost by refinancing, while another group are at income zero while trying to live in the same housing market with no demand for their services. When you see home prices booming and an eviction tsunami coming in the same newspaper, that tells you the same thing the book was trying to show you.

Does America writ large have the same housing shortage crisis as California and the Bay Area more specifically? There are other super hot markets, like New York City, Boston, or Seattle. But in Philly, or in Kansas City, is there really a lack of supply? 

There are three kinds of cities in America. There are the really out of control, fast-growing, rich cities: the Bay Area, Seattle, New York. There are declining Detroits and Clevelands, usually manufacturing-centric cities. Then there are sprawling Sun Belt cities. This book is by and large concerned with the prosperous cities. It could be Minneapolis, it could be Nashville. But the housing crisis in places like Cleveland is much more tied to poverty, as you pointed out. 

Those kinds of cities do have a different dynamic, although they still do have the same access to opportunity issues. For instance, there are parts of Detroit that are quite expensive, but they're quite expensive because that's where a lot of the investment has gone. That's where anybody with a lot of money wants to live. Then you have Sun Belt cities like Dallas and Houston, which are starting to become a lot more expensive as well. Nothing like the Bay Area, but the same forces are starting to take root there. 

I think that the Bay Area is important because throughout history, when some giant American industry has popped up, people have gone to Detroit or Houston. Now tech, for better or for worse, has become the industrial powerhouse of our time. But unlike Detroit in its time, it's very hard for people to get close to and enjoy that prosperity. There's a certain kind of city that is the future of America, it has a more intellectual economy, it's where new productive industries are growing. I think it's an outrage that all of them have these housing crises and it's considered some insane luxury to live there. 

A recent Zillow study seemed to show there hasn't been a flood of home sales in the pandemic that would signify a big urban exodus from most cities, with the glaring exception of San Francisco. Do you think that could substantially alleviate some of the cost pressure in the city proper?

On the one hand, I think this is about the general economy. If unemployment remains over 12% in San Francisco, yes, rent is going to be a lot cheaper. But is that really the reality we're all looking for? If restaurants and bars that were key to the city's cultural life remain shut, but rent is cheaper, is that what everyone wants? I bet you when this is all over, we're going to find out the tech people left at a much lower rate than others. Yes, they can all work from home, but what do you think has a bigger impact on a city: a couple of companies telling people they can work from home or the total immolation of entire industries basically overnight?

I don't want to make predictions right now, because we're in the middle of this pandemic. But if the city of San Francisco sees rents go down, well, the rent was already the most expensive in the nation. It falls 15%, 20%? How much better has that really gotten? Also, those people are going to go somewhere and unless they all move quite far away, you're still seeing these other markets picking up a lot of that slack. And those places are already overburdened. Oakland's homeless problem is considerably worse than San Francisco's. If you drive through Oakland, you will see things you did not think possible in the United States of America. 

Speaking of markets beyond San Francisco, you have a chapter about how difficult it is to build housing in the municipalities around big cities – many of which were just founded to hive off their tax revenues from low-income people.

That’s why you see Oregon, California, or the Democratic presidential candidates talking about shaking this up and devising ways to kick [zoning] up to a higher level of government. We've always done this whenever we've had a problem that seems beyond local governance. Like voting rights: you kick it to a higher body when the local body can't or won't solve it. 

But for better or for worse, this suburban thing is part of us now. We cannot just undo that. This notion of federalism and local control, those are important American concepts that can be fiddled with at the edges, but they cannot be wholesale changed. 

The first time I ever met Sonja Trauss [a leader of the Bay Area YIMBY group], she told me she wasn't super concerned about passing new laws but that the larger issue was to change the cultural perception of NIMBYism. We were living in a world where if you went to a city council meeting and complained about a multifamily development near your single-family house, you were not accosted for trying to pump up your property values or hoard land in a prosperous city. You were seen as a defender of the neighbourhood, a civically-minded person.

What is significant about YIMBYism is that the cultural tide is changing. There is this whole group of younger people who have absorbed a new cultural value, which is that more dense housing, more different kinds of people, more affordable housing, more housing options, is good. It feels like the tide is turning culturally and the movement is emblematic of that. I think that value shift will turn out to have been much more lasting than anything Scott Wiener ever does. Because the truth is, there are still going to be a bunch of local battles. Who shows up and how those places change from within probably will turn out to be more important. 

As you said, we've been seeing a lot of Democratic candidates with proposals around reforming zoning. How does Joe Biden's plan compare to the scope of the ambition in the field? 

There are two big ideas that you could pull from all the plans. First, some kind of renter's tax credit. It is obscene that we live in a country where homeowners are allowed to deduct their mortgage interest, but renters aren't. It is obscene that we live in a world where homeowners get 30-year fixed mortgages that guarantee their house payment pretty much for life and renters don't. If we think that it's a good idea to protect people from sudden shocks in their housing costs, that is as good of an idea for renters as it is for homeowners. 

I tell people that in this country, homeowners are living in the socialist hellscape of government intervention and price controls. Renters are living in the capitalist dream of variable pricing and market forces. Homeowners think they're living in this free market, but actually they're in the most regulated market – there are literally price controls propping up their market mortgages. 

Then there is Section 8 housing. Right now homeowners get access to the mortgage interest deduction. That programme is available to as many people as can use it, yet only about a quarter of the people eligible for Section 8 can get it. I think rectifying that is hugely important and a lot of the plans talked about that. 

The second big idea is using the power of the purse to incentivise people to more robustly develop their regions. You should have higher density housing in fancy school districts, near job centres, near transit. We're going to use the power of the purse to incentivise you, within the bounds of your own local rules, to do this right. Of course, that’s what Donald Trump is running against when he talks about Affirmatively Furthering Fair Housing (AFFH). 

When I was a local reporter in Philly, the city went through with that AFFH regulation despite Trump and HUD Secretary Ben Carson not being interested in enforcing it anymore. The city produced a fat report that maybe a few people read, but I don't think it changed policy. It's this phantom that Trump is running against, an ideal version of the policy that did not exist. It's also a phantom no one's heard of until Trump started tweeting about it. 

It’s been bizarre to watch. But Trump does seem to recognise that suburban politics don’t neatly fit into a red or blue construct. People who live in Texas and claim to want a free market system will turn around and erect local regulation to make sure nobody can build apartments near them. People in the Bay Area who claim to be looking for a more diverse place will use different logic, anti-developer logic, to keep apartments being built near them. 

People like that regardless of how they feel about things nationally. The bluntness with which Trump is doing it is discordant with the electorate and quixotic because people don't know what he's talking about. But the basic things he recognises – can I make voters feel like their neighbourhoods are threatened – he's onto something there. As with many things Trump, his tactics are so off-putting that people may ultimately reject them even if under the surface they agree.

You hear people on the left say the scary thing about Trump is that one day a good demagogue could come along. They're going to actually tax private equity people and they're actually going to build infrastructure. They're going to actually do a lot of popular stuff, but under a racist, nationalist banner. I think the suburban thing is a perfect example of that. There's a lot of voters even in the Bay Area who [would support that policy] in different clothing.

The world has changed completely since Golden Gates debuted just a few months ago. Has your thinking about housing issues changed as a result of the seismic disruptions we are living through?

The virus has done little more than lay itself on top of all of the problems I outline in the book. Whether we have an eviction tsunami or not, a quarter of renters were already spending more than half their income on rent. There's a chapter about overcrowded housing and how lower-income tenants are competing with each other by doubling, tripling, and quadrupling up for the scant number of affordable apartments. We now know that overcrowded housing is significantly more of a risk [for Covid-19] than, say, dense housing. If you live in a single-family home with 15 people in it, that's a lot more dangerous than 40 apartments in a four-story building.

Housing is just a proxy for inequality, it's a way of us building assets for one group at the exclusion of another. It is an expression of the general fraying of American society. I don't feel like that larger message has been affected at all, it's only been enhanced by the pandemic. With the caveat that this can all change, it just doesn't seem to me like there's some uber housing lesson we can learn from this – other than having a bunch of people crowded together is a really bad idea. 

Jake Blumgart is a staff writer at CityMetric.