New research reveals that Birmingham has the highest proportion of people not in work among UK cities, significantly impacting living standards across the city and the wider West Midlands region. Only 70% of working-age adults in Birmingham are economically active, a rate well below that of other major cities.
The city’s unemployment rate stands at 6.4%, one of the highest nationally, compared to much lower rates elsewhere—Belfast at 1.5%, York at 2.3%, and Edinburgh at 2.5%, for example. This disparity is contributing to Birmingham’s stagnating living standards, with disposable incomes showing a marginal rise of just 1.2% over the past decade.
According to the Centre for Cities’ Cities Outlook 2026 report, households in Birmingham have considerably less disposable income than those in many other UK towns and cities. If all 63 of the UK’s largest urban areas had matched the growth of the top performers—such as Warrington, Bristol, and Brighton—residents would have gained an extra £3,200 on average in disposable income over the same period.
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The report highlights that cities driving economic growth focus on developing strong local businesses and higher-skilled jobs in “tradeable” sectors like software, marketing, and finance. These industries enable firms to sell goods and services beyond their local markets, boosting regional prosperity.
The research also underscores an ongoing North-South divide, with London residents enjoying nearly twice the disposable income of Birmingham inhabitants (£27,200 vs. £15,057 before housing costs). This uneven economic landscape reflects significant differences in skills, connectivity, productivity, and job availability across cities.
Andrew Carter, Chief Executive of Centre for Cities, emphasized the importance of economic growth in raising living standards: “Cost-of-living fixes can only be temporary without stronger long-term economic growth. The Government’s plans on skills, transport, housing, and business support are critical for creating sustainable prosperity.”
He added that cities need to focus on generating jobs in emerging industries such as life sciences, digital technology, and artificial intelligence—sectors supported by the Industrial Strategy and central to future urban economic strength.
Councillor John Cotton, Leader of Birmingham City Council, stressed the city’s role in national recovery: “Birmingham must be at the core of the UK’s economic growth agenda to improve living standards, reduce poverty, and create employment opportunities for our expanding population.”
The stark findings call for urgent, lasting measures to drive job creation and raise incomes, ensuring that Birmingham and the West Midlands can keep pace with the rest of the country.