The Worcesternomics of Brexit

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World financial markets are still coming to grips with the United Kingdom’s vote last week to leave the European Union.

As recent as two weeks ago the odds, as set by gambling shops, were as high as 80 percent that the U.K. would vote Remain rather than Leave.

Despite dire warnings of financial ruin, the U.K. voted Leave 51.9 percent to 48.1 percent.

The shocking result and repudiation of political and financial elites begs not only the question, “How did Remain lose?” but also, “What were the forces at work and could those same forces be at work here?”

So we looked.

To Worcester.

Worcester, England.

Worcester, England

Worcester, England

Worcester is a city of nearly 100,000 in the West Midlands of England. It is the county seat of Worcestershire, home to the famous Lea & Perrins Worcestershire Sauce factory and the fast-growing University of Worcester.

Tom Edwards, a political reporter for Worcester News, calls the city a great bellwether of British politics. In an article for USA Today, Edwards wrote, “This picturesque riverside destination … is so important in British political circles that the term ‘Worcester Woman’ became a well-worn phrase in the 1990s, when both the Conservatives and Labour parties realized that Worcester’s parliamentary seat had to be won for them to stand any chance of winning a general election.”

Worcester, England, is similar to Worcester, Massachusetts. Both were former Industrial Age successes. Worcester, England, was famous for glove-making. At one point the industry employed more than 30,000 people.

Investment in Worcester is rising. Indeed, the University of Worcester has invested nearly £150 million from 2007 to 2012 and has nearly doubled its enrollment from 2006 to 2012 while placing 92 percent of its graduates in jobs or further education within six months of graduation.

June29-England TableUnemployment in Worcester, England, is low and wages, economic growth and business survival rate are up.

Things are generally good in Worcester, England. To borrow a phrase, it would be fair to say, “Worcester is on the right track.” That should have worked in favor of Remain.

Moreover, the forces aligned with Remain in Worcester and Worcestershire were significant.

Politicians from all major parties crossed partisan lines. Conservative Member of Parliament Robin Walker campaigned with local Local Party leader Joy Squires, Louis Stephen of the Green Party and Federica Smith of the Liberal Democratic party. Those four combined for more than 75 percent of vote in the last election, according to the paper. In all, five of the county’s six members of parliament campaigned for Remain.

They were joined by the Chamber of Commerce, major international employers Worcester Bosch and Yamazaki Mazak, the University of Worcester’s Vice Chancellor, the Bishop of Worcester and Dean of Worcester Cathedral.

All of this begs the questions, then, how and why did 53.6 percent of voters in Worcester vote Leave?

Michael Butler, for one, was not as shocked as the world was. Butler is a political science professor who teaches “The Politics of the EU” at Clark University and co-authored Global Politics: Engaging a Complex World.

Butler said, “The result of the referendum shouldn’t necessarily come as a shock. British attitudes toward European integration have long been skeptical, and the terms of the U.K. membership in the EU anomalous. Combining that with the negative associations of elites, economic insecurity, and immigration in the populist rhetoric ascendant in the U.K. – not unlike that in the U.S. – pretty much explains the outcome.”

Even City Councilor Adrian Gregson, who voted Remain, acknowledged the anxiety of voters when he wrote: “Worcester currently enjoys relatively low [un]employment though there is considerable unemployment amongst young people and people with disabilities, and there is widespread under-employment.”

In a comment on the Worcester News website, Frank Lankester of Worcester wrote, “We know [t]hat Britain’s future in the EU will be part of an area tragically scarred by mass youth unemployment with the slowest level of economic growth in the world, an EU with which we have a massive annual trade deficit. The EU is the past.”

Worcester, England, entrepreneur Neil Westwood wrote in the Worcester News: “On paper the EU sounds like a perfect dream (free movement of people, peace, and stability).

“In reality for millions of people it is a nightmare, it have created high unemployment across Europe and it has put too much pressure on the NHS [National Health Service] and schools that can’t cope with the increase in population.

“After we leave the EU, the government can create a business friendly environment to encourage businesses to be based in the U.K. By lowering national insurance contributions for businesses and lowering business taxes this will encourage businesses to set up and be based in UK and they will then create jobs.”

Lastly, saucerer, an article commenter, wrote: “We need to make our economy self-sufficient and start creating jobs. So, for example, stop buying all these German cars by the bucket load and start buying British! Same with other things like domestic appliances and other household appliance, buy British, not foreign!

“If the pound’s value plummets against other currencies, again, what’s the problem? If we make our economy self-sufficient and spend our money internally, it doesn’t matter. It’ll also make Britain a more attractive place for visitors as it’ll be cheaper for them. Ok, it’ll make our holidays abroad more expensive but again, why go abroad? Start taking holidays in UK and promote the UK economy, create wealth and create jobs for Brits.”

The European Union allows for a free flow of people and capital throughout Europe. It allows allows easier access to global markets. This is good for big businesses and consumers, who benefit from the ability of businesses to reduce costs by moving across borders to where production is cheaper.

Where there are economic winners, however, there are economic losers. For every company that can afford to take advantage of a global economy, there is one that cannot. The effect on a local economy such as Worcestershire’s is deleterious, leaving underemployment and low growth in its wake.

In this vein, it is little wonder that a majority of ordinary Brits, anxious about not only the present but the future, turned away from the promise of the EU. Worcester, England, may be on the right track, but that track is bypassing many people. Last week those people spoke unequivocally.

CityHall_SpringIn Worcester, Massachusetts, we see signs that indicate similar anxiety. There is development. Ribbon-cuttings and groundbreakings. But there is also 22 percent poverty. More than 1 in 4 people ages 16-64 are not in the labor market.

These are uncomfortable truths. Only by addressing these head-on can we ensure that one day we do not similarly find ourselves wondering why a majority of the people simultaneously say, “Enough.”

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