Birmingham's economic challenges: Why the city's future should concern you

Birmingham’s economy is at a turning point, with stark warnings that without decisive action the city could face a future of low pay, insecure work, and deepening inequality.

Manufacturing, once the backbone of the city’s prosperity, has fallen from about 40% of local jobs to under 10%. Many of the roles that replaced it are in lower-paid service industries, which are now themselves under pressure. Around 30% of working-age residents are economically inactive – among the highest rates in the UK – while youth unemployment regularly hovers between 15% and 20%.

Watch the video: Richard Gullick speaks to Dr Steven McCabe

“Birmingham’s skills gap remains a serious barrier,” said Dr Steve McCabe, an economic expert who has studied the city’s employment trends for decades. “Without a clear strategy to prepare people for the jobs of the future, we risk leaving a whole generation behind.”

City leaders highlight major projects such as HS2, new office developments and international events as signs of progress. But away from the city centre, many neighbourhoods face boarded-up shops, high poverty, and shrinking job opportunities. Even the hospitality sector has been hit, with two Wetherspoons pubs closing in recent months.

The rise of automation and artificial intelligence could intensify the challenges. Up to a quarter of jobs – many in the mid-skill range that once supported stable family incomes – could be lost or transformed within the next decade. Without intervention, experts warn, Birmingham could develop a polarised economy split between a small number of high-paid roles and a growing pool of insecure, low-wage work.

“The choices we make now on skills, investment, and who benefits from growth will define the city’s future,” Dr McCabe said. “This isn’t just about jobs – it’s about the kind of Birmingham we want to build.”