The Future of London: economic insecurity shouldn't drown out hope

Economic success and security are knitted into the story of London’s rise as a global powerhouse. But if we venture below this headline narrative, it is clear that economic success and security are becoming much harder to achieve for ordinary Londoners – and Brexit may make things even more challenging. But there are grounds for optimism.

Widespread pessimism is not unjustified - despite economic growth, it’s getting harder and harder to survive in London with the shortage of housing supply pushing up the city’s rents and, according to the CEO of NHBC, meeting the housing demand is not something that can be done in the near term. Higher rents mean that I will either have to stay with my parents for longer or house share; something you can’t explain by calling millennials lazy. This is made worse by a lag in income increases and the uncertainty following Brexit doesn’t seem to help at all.  People are turning to other solutions - it is suggested that more and more people are living in boats along canals in response to this housing crisis! Meeting rent and other expenses even outside of London for my second year at university is daunting to think about, and yet there are others more vulnerable than me - e.g. people on a minimum wage trying to support their families.

I am not blind to the drops in living standards, ridiculously high housing costs and precarious employment (I’m currently employed with a zero-hour contract), but I do see pessimism prevalent as a confidence multiplier working in reverse. This is where the worsening of, for example, the economy is interpreted to be worse than it actually is - a bit like a situation where one student complains about how hard an assignment is out loud triggers a string of similar complaints, which would not have been made if the first student had kept quiet. It seems as if people are eager to complain about creaky London Tube carriages but reluctant to acknowledge that if you miss one train, another will be just around the corner.

We are living in an age where we are taught to be critical - and rightly so - but at times this creates a confidence crisis where the bounded rationality of humans influences how we interpret things. This explains why people feel wealthier when the value of their homes increase. This is also what makes us more wary than we need to be about economic success not bringing about ‘promised’ security. Despite the confidence crisis making challenges seem worse, there is still some cause for optimism.

London still drives significant employment and in 2015 accounted for 83% of graduate vacancies at leading UK employers.  Also, according to “the Future of London’s Economy”, published by the City of London Corporation, “SMEs and self-employment are an area where several outer London boroughs – with their offer of lower-cost housing and commercial space and a chance to skip the costly commute – are starting to stake a claim.” What I take from this is that living in London is still very attractive and employment opportunities are concentrated here. Economic success does to a large extent seem to translate into a level of security and optimism about the future that helps counteracts the confidence crisis and all the things that headlines suggest millennials should be afraid of.

Challenges characterise the future of London and millennials will probably have to make more financial compromises than previous generations. Especially in light of Brexit, a confidence crisis is likely to fuel uncertainty in terms of the economy- not the best climate to graduate into! Economic success and security are undoubtedly getting harder to achieve but it doesn’t help when we are constantly labelled as scapegoats and when our situation is compared to the golden age of 40-50 years ago  - thereby fuelling the confidence crisis.

Being able to lead a ‘good life’ takes a lot of hard work. This is something that I’ve internalised quite a while ago - hours go into sketching a good piece of art, years of education are needed before you graduate, working overtime allows you to accumulate start-up capital for the business you’ve been dreaming of and only after a long mortgage can you actually call your home yours. My economic ambition in the future would be, in a nutshell, “securing a graduate job and working towards buying my own property.” Living in the prosperous but extremely expensive global city of London, this common dream of a first year undergrad student may seem like naïve optimism, especially for someone living in a relatively poor part of London and coming from a traditional immigrant background. But we shouldn’t be swayed by doom and gloom warnings about a failing economy- with a little hard work (and luck), and a lot of resilience, it seems possible, even if it takes longer than it did for previous generations.

Aima Ahmed is a first-year undergraduate student of economics and recently completed work experience with the RSA.