The debate over whether or not the deindustrialisation of cities is accompanied by the occupational and income polarisation of their working populations has been characterised by some confusion over the relationship between incomes and occupations in the service sector. Specifi cally, many scholars have misunderstood the signifi cance of middle-income service-sector occupations for their interpretations of the post-industrial class structure of cities. Through a comparative study of deindustrialisation in Cape Town, evidence is presented to show that the growth of service-sector employment can produce a large middle-income occupational class of clerks, sales and personal services workers. The growth of this class can offset the decline of middle-income jobs caused by the loss of artisans, machine operators and drivers in the declining manufacturing sector. These results therefore suggest that many studies have overestimated the extent of occupational polarisation and underestimated the extent of professionalisation.