IN ITS 19th-century heyday Liverpool was one of Britain’s richest cities. Its professionals were so prosperous that they paid more in income tax than those of Birmingham, Leeds and Sheffield put together. But, one by one, the city’s upper-middle-class institutions are tumbling.

Since 2007 five fee-paying schools in Merseyside have converted to state-funded academies, or announced their intention to do so—including the prestigious Liverpool College. Lewis’s, a once-glamorous department store, closed in 2010. In December 2013 the Liverpool Post, a local paper dating from 1855, published its final issue. Carrying a mix of politics, sport and serious business news for the middle classes, it no longer sold enough copies or carried enough advertisements to survive.

Liverpool had a comparatively mild economic slump. In gross-value-added terms, its economy has tumbled 5.8% since 2007, compared with an average fall of 7.4% across Britain. The proportion of its workforce on unemployment benefit peaked at 7%—far below the appalling rates of over 20% in the 1980s.

Yet the city’s higher earners have been squeezed. Liverpool’s unemployment rate has stayed subdued because the number of low-paying jobs has grown. But the public sector, which provided many of the city’s well-paid jobs before the recession, has been hit hard by austerity. And between 2008 and 2011 the city’s finance industry shrank by a third; Manchester’s contracted by just 11%. The takeover of Royal Liver Assurance, the city’s biggest insurance firm, by a London-based outfit in 2011 was a bitter blow.

Incomes are falling behind prices. The average weekly wage in Liverpool rose by just 3.7% between 2008 and 2012, while retail prices increased by 13%. The cost of some things bought by wealthier households rose more. Private-school fees—which make up a large chunk of many upper-middle-class budgets—shot up by 18.3%. The spending power of a typical Liverpool private-school parent will not return to its pre-recession level before 2018, according to MTMConsulting, a market-research firm. Even though five fee-paying schools are becoming state schools, applications to study at the remaining private schools are falling.

In some ways affluent Merseysiders are trading down. In the car park of an Aldi discount supermarket in Kirkdale, regular shoppers note the growth in “posh” cars like Range Rovers—a trend seen in other straitened parts of Britain. But aspirations have remained intact. Liverpool College’s principal, Hans van Mourik Broekman, says many parents who visit the now-free school are the sort who would have been able to afford fees in the past but can no longer do so.

A middle-class revival is possible. White-collar jobs have started to return to central Liverpool as firms are drawn by cheap office rents, often for space left empty by former public-sector tenants. More young people are sticking around, partly for lack of enticing opportunities elsewhere. A tenth more Liverpool University graduates now remain in the city to work compared with 2010, according to Paul Redmond at the university’s careers service. The total population of central Liverpool grew by 3.3% between 2008 and 2012 while middle-class suburbs like Sefton contracted slightly.

Before the city’s docks were redeveloped, a historian called Liverpool’s grand, then-derelict centre “an unwanted mausoleum” of its economic heyday. That is no longer the case. It is now the well-to-do suburbs that feel rather tired.