Tuesday, 30 October 2018

US growth under Trump is the slowest under any US President since World War II

By John Ross

The US is fighting the trade war against China on two fronts.

·         The first is the US external economic attack on China, primarily centred at present on tariffs. This is designed by US policy to create objective economic problems for China.

·         The second is the US attempt to influence international debate. This is trying to use US propaganda to spread an entirely false view of the international situation and in particularly of the real state of the US economy.

The most central propaganda falsification on this second front is to attempt to present a view of the US economy as undergoing ‘very strong’ growth. The aim of this propaganda falsification is to attempt to claim that it is pointless for China or other countries to resist the US due to the latter’s economic ‘dynamism’ – and therefore that China should accept the Trump administration’s trade demands and also abandon its socialist model of development in favour of the ‘dynamic’ US one.
This US propaganda claim of ‘strong growth’ is in fact the reverse of the facts. The reality is that far from US growth under Trump being ‘strong’ it is in fact the lowest under any US President since World War II!

The aim of this article is therefore factual, to lay out in detail the factual realities of the US economy under the Trump administration – it therefore follows the Chinese dictum of ‘seek truth from facts’.
But establishing these facts is critical for judgement of the situation in the trade dispute with the US. The US is attacking China not because of ‘dynamic’ US growth but because US growth has fallen to such a low level by historic standards.

The entirely false economic claims of Trump


When President Trump claimed in his speech to the UN General Assembly on 25 September that, ‘America’s economy is booming like never before,’ and that, ‘in less than two years, my administration has accomplished more than almost any administration in the history of our country,’ the delegates literally broke out into laughter – as US media reported. The Washington Post headlined its report: ‘”People actually laughed at a president”: At UN speech, Trump suffers the fate he always feared.’ The UK Financial Times similarly noted: ‘President Trump prompted laughter and gasps.’

As Trump’s claim the US economy is ‘booming like never before’ is simply entirely untrue, as was his earlier one that growth under his presidency was ‘historic’, by which he meant historically high, it is therefore rather astonishing to see similar claims repeated in parts of China’s media. The reality is that under Trump, far from the US undergoing ‘strong recovery’, it is experiencing the slowest economic growth in any business cycle, and during any presidency, since World War II. As this article will show, the only sense in which economic growth under president Trump is ‘historic’  is in the sense that it is ‘historically low’.

US Post-War Business Cycles


To start with the most comprehensive data on US post-World War II economic performance, Figure 1and Table 1show the data for growth in all US business cycle since World War II. Table 1shows these eight US business cycles since World War II in chronological order – a business cycle is defined as the period between two recessions and a recession is defined, in the standard US manner, as two successive quarters of negative growth. As business cycles are of different lengths the key statistic for comparison is the average annual growth rate during the cycle – shown in the last column.

The feature which stands out from this data is clearly how much slower US growth is during this business cycle than it than in any previous one since World War II. To give a comparison to evaluate Trump’s claim regarding ‘historic’ fast growth, the most rapid annual average economic growth in any post-World War II US business cycle was in 1948-1953 at 4.7%. That was more than three times as fast as the 1.5% during the current business cycle. Indeed, it may be seen that in all previous US post World War II business cycles growth was faster than in the present one.

Looking in Figure 1,  at the end of the growth line for the present post 2007 business cycle, it can also be immediately seen that there is no significant acceleration during the Trump presidency – this will be demonstrated in detail below.



Detail


In order to show the trends in the post-World War II economy more clearly and in greater detail Figure 2sets out growth in US business cycles since World War II in descending rank of growth rate rather than chronological order. This shows the following clear pattern.

·         The fastest annual average economic growth in any post-World War II US business cycle was in 1948-1953 at 4.7%

·         The second highest annual average growth in any US post-World War II business cycle was in 1957-1969 at 4.3%

·         The third highest annual average growth in any US post-World War II business cycle was 3.4% in 1969-1973.

·         The fourth highest annual average growth in a US post-World War II business cycle was in 1980-1990 at 3.1%.

·         The fifth highest annual average growth in any US post-World War II business cycle was 3.0% in 1990-2007.

·         The sixth highest annual average growth in any US post-World War II business cycle was in 1973-1980 at 2.9%.

·         The seventh highest annual average growth in any US post-World War II business cycle was 2.5% in 1953-1957.

·         The slowest annual average growth in any US post-World War II business cycle was in the cycle from 2007 to the present, the latest data being for the 2ndquarter of 2018 – with an annual average growth rate of only 1.5%.

Figure 2 therefore shows clearly how much slower growth is in the present US business cycle than in any previous one since World War II. The claim that that the US is undergoing ‘dynamic growth’, due to rapid technological innovation or to Trump, is the exact reverse of the truth. What is striking about the present situation of the US economy is how slow its growth is compared to all previous post-World War II US business cycles


Growth under Trump – the US method of measurement


So far growth during US business cycles has been analysed. But the Trump presidency covers only a part of the present US business cycle – this business cycle has also been proceeding under the presidencies of George W Bush and Obama. Therefore, to compare presidencies, it might be claimed that growth under Trump is fast, whereas that under George W Bush and Obama was weak. But, once again, the facts show the exact opposite – it is growth under Trump which stands out as weak.

To show this Figure 3illustrates US GDP growth during the 21stcentury measured by the method by which the US publicises its economic data – i.e. quarter on quarter GDP growth annualised (for example growth in the 2ndquarter of 2018 compared to the 1stquarter of 2018 annualised). Figure 3shows that using this measure:

·         In the last period of the Clinton presidency peak US growth reached 7.5% in the second quarter of 2000 – the fastest growth under the Clinton presidency.

·         Under George W Bush there were successive peaks of growth of 7.0% in the 3rdquarter of 2003 and 5.4% in the 1stquarter of 2006.

·         Under Obama peak growth was 5.1% in the second quarter of 2014.

·         Therefore, the peak growth under Trump of 4.2% in the 2ndquarter of 2018, is slower not merely than under Clinton but also slower than under George W Bush and Obama during the present business cycle.


Real US year on year growth


It was demonstrated above that even taking the method by which the US choses to publicise its data growth under Trump is slower than under Obama, George W Bush and Clinton. However, there are significant problems in the way that the US publicises its GDP data – i.e. by annualising quarter on quarter growth. This is because:

·         First, as only a three-month period is used, short-term factors distort the data.

·         Second, because such short-term factors are approximately multiplied by four their effect is magnified[1]. This results in the peak growth rates achieved under all US presidents measured by the US method being exaggerated – Clinton never actually achieved 7.5% growth over a whole year, George W Bush never achieved 7.0% growth over a whole year etc.

·         Third, because different quarters are being compared a seasonal adjustment calculation has to be made which must be accurate for the data to be correct. But in the US it is generally known this seasonal adjustment is inaccurate – the first quarter growth in each year is understated, meaning growth in following quarters is exaggerated.

This method of China of publicising economic data is more robust than that of the US. China highlights the real year on year economic growth rate – that is it compares GDP in one quarter with GDP in the same quarter of the previous year (e.g. the second quarter of 2018 is compared with the second quarter of 2017).

China’s method of presenting GDP data is more robust for two reasons.

·         First, a year is a sufficiently long period to eliminate the influence of purely short-term factors – such as the weather.

·         Second, no seasonal adjustment need be calculated as the same quarter is being compared in each year.

Figure 4therefore shows the real US year on year growth rate achieved in different quarters during the 21stcentury. It may be seen that this immediately lowers the growth rates shown using the US method of presenting data that was given in Figure 3(for example, the actual peak year on year growth achieved by Clinton was 5.3%, not 7.5%). While the growth data calculated by real year on year growth are more realistic than the US method of publicising data, nevertheless it shows exactly the same pattern of the extremely weak peak growth of the US economy under Trump compared to previous presidents in the 21stcentury. More precisely

·         Peak real year on year US growth under Clinton was 5.3%.

·         Peak real year on year US growth under George W Bush was 4.3%.

·         Peak real year on year US growth under Obama was 3.8%.

·         Peak real year on year US growth under Trump is only 2.9%.

Once more it is therefore clear that what is striking about growth under Trump is not how fast it is but how slow it is.


US economic growth under Trump is the slowest under any US President since World War II.

So far, in comparing growth under US presidents, only those in the 21stcentury have been analysed. But the comparison becomes even worse for Trump if all US President’s since World War II are compared. Indeed, the extraordinary situation may be seen that peak growth under Trump is the slowest for any US president since World War II.

To demonstrate this Table 2and Figure 5shows peak growth under all 13 US Presidents since World War II. This data is shown in the way that the US itself choses to headline economic growth – one quarter’s growth compared to the previous quarter at an annualised rate. This data then shows clearly that peak economic growth under every previous post-World War II President was higher than under Trump.

In more detail, Table 2shows that, using the US method of presenting data, the peak growth under Trump of 4.2% in the 2ndquarter of 2018 was significantly lower than the maximum growth under the previous Obama administration of 5.1%. However, this peak under Obama was itself far lower than under former US Presidents. In addition to peak growth under Trump being lower than under Clinton, George W Bush, and Obama, as was already analysed, earlier Presidents achieved even higher growth rates – such as 10.3% under Nixon. Peak US post-World War II growth was achieved under Truman at 16.7% – almost four times as fast as the 4.2% under Trump.

It is therefore clear that in terms of peak growth rate, measured by the way the US presents data, Trump ranks last, 13thout of 13, of US post-war presidents.



Real year on year US economic growth

To double check the situation, it may again be recalled that the US presents its data in a different way to China. Having already given the results using the US method, Table 3and Figure 6therefore shows real year on year peak growth under all US presidents since World War II. This shows that also calculated by this method the peak year on year GDP growth under Trump, at 2.9% in the second quarter of 2018, is the lowest under any US president since World War II.

It was already noted that peak growth under Trump of 2.9% was lower than under Obama (3.8%), George W Bush (4.3%), and Clinton (5.3%). But Trump’s peak growth rate was also lower than under George H W Bush (4.4%), Ford (6.2%), Carter (6.7%), Nixon (7.6%), Kennedy (also 7.6%), Johnson (8.5%), Reagan (8.6%), Eisenhower (9.1%), and Truman (13.4%).

Therefore, whether growth is calculated according to the method used by the US, or that used by China and most other countries, peak growth under Trump is the lowest of all of the 13 US presidents since World War II. What is therefore striking is not that US peak growth under Trump is fast but that it is so slow in terms of historical comparisons.



The state of the US business cycle


Finally, given that peak US economic growth under Trump is slower than under any previous post-World War II US president, the only reason President Trump is able to make his entirely false claims of ‘historic’ growth is by  comparison to the extremely poor performance of the US  in 2016 when US growth fell as low as 1.3% in the second quarter – shown in Figure 7. But Figure 7equally shows that both the downturn in the US economy in 2016 and the recovery since then, were perfectly normal fluctuations within the US business cycle.

Analysing this trend in the US business cycle detail, it may be seen that the current long-term average of US real year on year growth is 2.2%. However, naturally, there are fluctuations above and below this. To give a rough approximation of the magnitude of these fluctuations, as the 1.3% growth in US GDP in the second quarter of 2016 was 0.9% below the long-term average then, merely to maintain the average, a 0.9% oscillation above the average might be expected. The long-term average of 2.2% plus 0.9% would be 3.1%. There is, therefore, nothing abnormally high in US growth in the second quarter of 2018 being 2.9%.

Trump’s claims on rapid growth therefore merely represent a normal fluctuation in the business cycle and in no way alter the fact that peak growth under his presidency is lower than under any US president since World War II.


Furthermore, there is a clear implication of the fact that even the slow peak growth under Trump is simply a normal upward oscillation in the US business cycle. This is that this will be followed by a perfectly normal downward oscillation in the business cycle. Indeed, this is precisely what is predicted not only by the long-term averages of US growth shown above but as is predicted by the IMF. As Figure 8shows the IMF projects that after extremely poor US growth of 1.6%, for the whole of 2016, US growth will accelerate to 2.9% in 2018. After this, however, US growth will decelerate to 1.9% in 2020 and 1.7% in 2021 – this would represent a perfectly normal oscillation in the US business cycle.


To understand the impact of this trend on US domestic politics it is important to note that the US has a relatively fast rate of population increase – 0.7% in 2017. Figure 9 therefore shows both the actual increase in US per capita GDP to 2017 and the IMF’s projections for the increase in US per capita GDP after this. As may be seen, the IMF projects annual US per capita GDP rising to 2.1% in 2018 before falling to 1.1% by 2020 and only 0.9% by 2021.Therefore, the increase in US output per person is actually significantly below the US total GDP increase. Furthermore, due to rising US inequality, the increase in actual real incomes of the majority of the US population is lower even than the increase in per capita GDP.

With such a slow increase in per capita GDP it is evident that current domestic political tension and instability in the US will continue – as has been seen in the sharp internal US political clashes since 2016.


Conclusion


There are numerous consequences internationally and for US domestic politics of the very slow growth of the US economy under Trump compared to previous US post-World War II presidents. However, the precondition for analysing these implications is to establish the facts – which is the purpose of this article.

These facts leave no doubt.  Peak growth under Trump is the lowest for any US president since World War II, and US growth in the present business cycle is the slowest in any since World War II. In summary, US policy is determined by how slowly its economy is growing by historic standards.

The starting point for any serious analysis of the Trump administration must be how slow its economic growth is compared to previous US post-World War II presidencies. Once that is done then the features of the Trump administration’s policies become clear.

*  *  *

The Chinese language version of this article was originally published by New Finance on 6 October 2018.

[1] Strictly speaking the annualization is carried out by ((1+g)^4)-1) where g is the growth between one quarter and the next.


The above article was published first in English by New Cold War.

Austerity isn’t over. It will resume, but it has been suspended for one year

By Tom O’Leary

The claim for the latest Tory Budget is that ‘austerity is coming to an end’, and has been dutifully echoed by the Tory press and the BBC.

In reality austerity policies will continue long into the future, extending the longest recorded fall in living standards in this country. The exception is the calendar year 2019, where both Government Consumption and Investment will rise as a one-off, before planned cuts in future years.

This is not an end to austerity, but a single event. On the face of it, it looks like preparation for Brexit and/or a general election either later in 2019 or early 2020 when the effects of the one-off increase in Government outlays is still being felt. This is exactly what George Osborne did in 2014, as part of the Tory Party’s plans for a 2015 general election.

Government Outlays

The Table below is taken from the Treasury ‘Redbook’ (pdf) 2018 that accompanies the Budget. It summarises the Office for Budget Responsibility’s (OBR) forecasts for key economic variables in light of its own economic analysis and its assessment of the Government’s Budget.

The Table shows there is an increase on both Government Consumption and Government Investment in 2019. They are both much higher, relatively speaking than in the two preceding years 2017 and 2018. It is also important to note that the growth rate of both these sector of Government outlays fall away again in subsequent years. Both of these were also revised substantially higher solely for 2019, compared to the March 2018 Spending Review, whereas other years have almost all been revised lower compared to March.

This is not a sustained increase in either Government Consumption or Government Investment, which would meet the claim of austerity ‘coming to an end’. Instead, it is simply a one-off event.


It is not possible to say whether this is in response to Brexit risks, where the economy will surely be worse than otherwise especially if there is no deal with the EU. It may be instead a plan to temporarily stimulate the economy ahead of an intended election. Or both. But it is not end to austerity, which will resume in subsequent years.

Negative outlook

The OBR Table also reveals a deep and abiding pessimism about economic prospects. By 2023 this business cycle will be very mature, as the last recession ended in mid-2009. Yet even without a renewed downturn real GDP growth is officially projected to average no more than 1.5% annually over the entire period. Chancellor Hammond explicitly states that the trend growth rate for the economy has been lowered by the financial crisis. On official forecasts, sluggish growth is the new normal.

The driving force of the economy is Investment, and with it the increasing participation in the division of labour through foreign trade. This is not the OBR’s framework, which remains stuck in a neoliberal/Treasury paradigm that Consumption drives growth. Even so, the OBR’s forecasts are noteworthy for expecting no increase in net trade, and the worst ever growth rate of fixed Investment over such a prolonged period.

Without better growth than is forecast, it is extremely difficult for living standards to rise.

Crucially, the OBR expects corporate profits to slow even further from 3.5% growth recorded in the first half of 2018. It projects that the slowdown will continue with just 2.8% profits’ growth in 2019 and only matching the average real GDP growth rate for the economy in further years.

It also notes that business Investment has risen by just 1.9% in the two years since the EU referendum and fell outright in the first half of this year. If the OBR is even close in its assumptions about profits, it is difficult to see where any rebound in business Investment will come from.

In fact, with weak growth from both business Investment and the Government, the OBR’s entire forecast even of very weak growth rest on a renewed increase in household indebtedness. The Chart below is Chart 3.23 taken from the OBR’s Economic and Fiscal Outlook to accompany the Budget.

It shows household debt rising once more, from 133% of household incomes in 2015 close to 150% of incomes in 2024. 

Chart 1. OBR Projections for Household Gross Debt to Incomes

According to the OBR, average earnings growth will not be contributing much at all to increased household consumption, as real average earnings growth measured against CPI inflation will grow by just 4% over 7 years. Measured against the RPI, real average earnings will fall by 2.8% over the same period.

This is at a time when the unemployment rate is expected to remain at historically low levels. Contrary to widespread assertion, wages are not set by ‘supply and demand’. Wages are set within the absolute limits of starvation level of the workers and the entire value of their output. Within those limits there is a struggle between classes for the income share of that output.

The current government, like its predecessors, is vigorously pursuing the interests of employers within that struggle. The net effect to date has been to depress real wages, but not to boost profits sufficiently to promote business Investment, as already noted. Therefore, austerity will continue after 2019 to achieve that outcome. Unless, of course they are stopped.

In a follow-up piece, Labour’s Budget alternative will be examined.

Monday, 15 October 2018

The changing character of the workforce

By Tom O’Leary

The British workforce is undergoing tumultuous changes. It is important for both economic policy and political strategy to grasp the nature of those changes. In addition, a factual analysis of the character of the workforce is a useful corrective to ill-conceived political analysis based on misplaced notions about what it is to be a worker.

This piece will focus mainly on one important aspect of the character of the workforce – its composition by skill category, according to designation by the Office for National Statistics (ONS). All data cited is available here. 
Workforce composition

In April-June 2018 there were a little over 32.3 million workers in the paid workforce. The biggest single category was ‘Professional occupations’, which accounted for 6.5 million of the total. If we take both this category together with ‘Associate professional and technical operations’ (the second-largest category) these two account for 11.2 million workers, more than one-third of the total.

Chart 1 below shows the ONS categories of employment at April-June 2018, ranked according to size.

Chart 1. UK Occupational categories at April-June 2018, millions
 
This current composition of the workforce is a product of enormous changes in a relatively short period of time. In 17 years, the British workforce has been transformed. In April-June 2001, there were a little over 27.6 million people in the workforce.  The current total represents an increase of 17%, or 4.7 million workers.
The overwhelming majority of this rise has been in the same two categories, Professional and Professional and technical occupations. Together over the last 17 years the number of people in these two occupational categories has increased by 4.2 million workers. This represents most of the net change in jobs over the last 17 years.  The Professional category alone has almost doubled over 17 years.

Elsewhere, some other occupational categories have declined in number. Managers, Admin/Secretarial and Machine Operators have each seen job losses of 300,000. Chart 2 below ranks the changes in those job categories since 2018.
Chart 2. UK Changes in Occupational Categories in the 17 years to April-June 2018, millions
Managers have declined as businesses have set out to ‘de-layer’ management structures to achieve greater profitability. Admin and secretarial jobs have declined as part of that process, and with the growth of personal computers as a key tool for an increasing number of jobs. Machine operators have declined with the dearth of manufacturing and related industry investment.

Other important changes have also taken place, aside from these skills-based changes. Table 1 sets out some of the key changes in the composition and terms of employment over the same period. Rounding means some categories will not sum to the total.

Table 1. Key changes in the UK workforces 2001 to 2018, millions
Source: ONS

There have been important changes across the board. The proportions of workers categorised as self-employed and part-time have both increased in the workforce as a whole. The number of workers on zero-hours contracts has quadrupled over the period. And, while this is still a very small proportion of the total workforce, it represents a long-term threat to the pay, conditions and organisations of the labour movement.
The conscious and persistent efforts to widen the casualisation of the workforce have registered some victories over the period. Despite this it is important to note that the biggest single change in the workforce has been in the growth of full-time workers, representing more than two-thirds of the total increase.

One important development is the relative growth of women in the workforce. This is a gain for all workers as women’s greater participation in the workforce tends in the direction of greater collective provision of domestic and carer chores, even though austerity has pushed sharply in the opposite direction. The biggest gainers are women themselves who can be liberated from financial dependence and domestic drudgery through paid employment, although of course this is not necessarily automatic.  
Professional workers

Important as each of these changes are, numerically by far the largest change has been the growth in the categories of professional workers (Professional and associate professional technical ONS designations). These are therefore worth examining in greater detail.
They are not ‘Managing Directors’, senior bank executives, or managers of NHS Trusts and so on. These are in the first ONS category of Managers, Directors and Senior officials, and their number has sharply declined over the period, as shown above. Instead, they are teachers, doctors, nurses, accountants, finance and ICT professionals.

They are overwhelmingly employed (9.66 million), full-time (9 million) and increasingly women, now making up almost half of these two categories (47.7%).
The five biggest categories of professional jobs all range between approximately 1 million and 1.5 million workers. In descending order, business and statistics (eg, accounting/auditing), teaching, health, ICT and sales jobs account for 6.57 million workers. This is of a total of 11.19 million workers in these Professional categories.  

There have also been major changes in the numerical strength in the occupations within these categories, which accounts for their dominant role in the changes in the workforce as a whole. Chart 3 below shows the changes in the leading Professional occupations over the last 17 years within the Professional categories.
Chart 3 Change in numerical strength of UK Professional occupations, 2001 to 2018, thousands
Source: ONS
The biggest single increase over the period has been in business, finance and statistical occupations, a rise of 760,000. But taken together, ICT and sales professional categories have risen by 1.13 million combined. In addition, health, teaching and social welfare jobs have increased by slightly more than these, for a combined total rise of 1.15 million.
Clearly, there are different trends at work. The growth of the already outsized British finance sector has continued, registering little impact of the financial crisis. In addition, the tightening or at least greater complexity of the regulatory and accounting regime governing British firms continues to generate jobs, although the performance of British firms or their regulation has not noticeably improved. But firms are also increasing their capacity in certain limited areas, such as IT and in sales. At the same time, certain key (mainly public sector) jobs continue to grow in health, teaching and social welfare (including social work and housing). 

Total public sector employment has been reduced by just over 200,000 over the period to over 5.3 million. This represents a decline from 20.1% of the workforce to just 16.5%. Higher union densities in the public sector mean that union memberships have also been hit as a result. Of the only two Professional categories that registered declines over the period one was the civil service, the other was research.
Politics and workers

The occupational categories used by ONS are based on skill levels required to perform the job (not the skills of the worker, which can be far higher). But when they were initiated they also tended to indicate income and to some extent social position. ‘Professions’ had distinctly better pay and conditions than manual workers.
The current categories were re-designated in 2010 to reflect changing skills (nursing saw a big rise in required skill levels) but the current types of classifications were introduced in 1990. Other versions go back much further.

Unfortunately, political debate in this country is often confused by reference to those much older versions. In particular, pollsters use the ABCDE categories of occupations (with C split into 1 and 2), which purport to assign views by class. This is wholly spurious.
These categories are over 50 years old and are tool of advertising analysis used by publishers and advertisers in the National Readership Survey, solely in Britain. These are completely non-Marxist, that is non-scientific categories. It is arguable that there may have been some alignment between these categories and social classes when the NRS was formulated, but now they lead only to utter confusion.

For example, pollsters, centrist commentators and outright enemies of the left argue that Labour has lost the working class, because it won the ABC1 categories in the 2017 election. This is despite the fact that the ABC1 categories includes teachers, doctors, nurses, IT workers, as well as mechanics, electricians, brickies, butchers, bakers (alas, no candlestick makers).
The categories C2DE include both lesser-skilled workers, as well as those at the margin of the workforce and pensioners. It should come as no surprise to any observer of British politics that, unfortunately, pensioners overwhelmingly do not vote Labour.  They are also the single biggest category, with over 12.5 million pensioners in the UK.

Labour’s policies to attract pensioners deserve a lot of work. But it must first be recognised that there is a political hostility to a left leadership of the Labour Party which currently increases with age. In fact, age is almost the single most reliable indicator of voting intention. It was one of the great feats of the Corbyn 2017 general election campaign to massively increase the turnout in younger age groups who had increasingly been disinclined to vote.
Similarly, it is widely argued that the Leave vote was a workers’ vote on the same spurious basis, and that the Remain vote was concentrated among the liberal, metropolitan elite. Northern Ireland and Scotland are not normally included in such categories, and they both voted Remain by some margin. So too did most of the cities including London, Leeds, Glasgow, Edinburgh, Bristol, Manchester, Cardiff and Belfast, Leicester and Newcastle. In general, workers live in cities and predominate there.

None of the arguments using NRS categories as a substitute for class analysis turns out to be correct. They cannot. This is because the NRS is a peculiarly English obfuscation of class, similar to blue and white-collar, or accent or (formerly) which newspapers people read.
Class categories are actually based on social relationship to the means of production. Owners of the means of production are the capitalist class. Those who own virtually nothing except their own labour which they are obliged to sell are proletarians.  Others form intermediary layers. The last several decades have in part actually been characterised by the proletarianisation of many professions, including teachers and doctors and other medics, as well as the numerical growth of those professions.

As workers are the exploited class all sustained social progress rests on their shoulders. They must take up all instances of oppression and discrimination to make progress, and to create the alliances necessary to advance.
Likewise, a Labour victory depends on appealing to that combination of the workers and all the oppressed.  These must first be correctly identified, taking account important changes and building support by championing the interests of the workers and the oppressed in their totality.