Britain becomes a two-class society: working and nonworking

Sporty BMW sedans in bright reds and greens clog the high street in wealthy Cobham in Surrey, south of London, nose-to-tail with Jaguars and Mercedes. Women are expensively dressed.

New figures show more British people than ever before with a telephone (about two-thirds), central heating (about half), a car (58 percent), a refrigerator.

Yet at the same time, almost 2.5 million British people are out of work (a postwar record). About 5,000 jobs are being lost every week. Whole industries, from steel, to chemicals, to cars, are reeling. And financial experts say the tide of recession won't turn for several months yet.

Paradox? Or dramatic evidence that Britain today is in fact two countries, one populated by those in jobs, the other by those who have lost them? What does it mean for the future?

London School of Economics lecturer Alan Marin is one expert who tends to the "two countries" approach: "Those who have stayed in work are better off now than ever before," he said in an interview, "Their disposable income has risen in recent years."

"But those out of work have seen their disposable income falling. London and the southeast are relatively prosperous. But in the north of England, as well as in Wales, Scotland, and Northern Ireland, people are suffering."

Added to a sharp fall in company profits because of high bank lending rates and the recent strength of the pound abroad, this has meant a fall in national income as a whole.

And in the view of Mr. Marin and other economists contacted by the Monitor, it also signals a different Britain in years ahead, even after the world recession eases and economies in general begin to pick up.

New government figures show that, for upper and middle class workers in London and the southeast, life seems materially satisfying. Wages have gone up steadily, disposable income is up, consumer goods are appearing in more and more homes.

The well-to-do have actually benefitted by some of the economic trends that have hurt industry and business. A strong pound, for example, has meant imports are cheaper. Consumers with money in their pockets have had a wider ranger of goods to buy, at prices rising slower than the consumers' own purchasing power.

This trend will continue. Southeast England and London look to become even better off than the north and west.

In Wales and Northern Ireland, less than half of the households have a phone, even today. In North Yorkshire and Humberside, less than half have a car -- a fact that is hard to believe to a southerner caught in the endless traffic jams and narrow roads around London.

"It's pretty grim up here," says one manchester businessman. "Businesses are closing. That means fewer jobs and more problems." Unemployment in some neighborhoods of Liverpool is as high as 40 percent. Slashed government spending affects large numbers: One study shows about 30 percent of people in Liverpool work for central and local government.

Traditional businesses in the north -- cotton, chemicals, steel, coal, and cars -- are being affected by outmoded equipment, high labor costs, and a resistance to change.

Welfare benefits and unofficial part-time work cushion the joblessness, at least for the first year, although experts cite some studies showing that many people find they lose almost half their income while out of work.

But prolonged recession has meant so far that the well-off do well while the poor grow poorer -- and one result is said to be that Britain from now on will have more people out of work than before, even when the recession ends.

"Longer-term unemployment is growing," Mr. Marin notes. "People are out of work for six months or longer. They include young people leaving school [helped for now by government training schemes] and those over 50 years of age, who lose jobs less often than younger people but who have more trouble finding a new one."

Yet growing income disparities have not yet produced severe grass-roots social tensions, and Prime Minister Margaret Thatcher is fairly well insulated against severe political fallout. Joblessness is concentrated in Labour Party strongholds, cities and inner suburbs, a nd far less prevalent in Conservative territory.