Jobs remain heavily centralised within the capital cities

We have suggested several times on our research blog that, as a nation, Australia needs to see more geographic diversity in the labour market.  A wider geographic distribution of full time employment opportunities would imply a lessening in demand pressures in capital city housing markets and an improvement in regional demand levels where housing affordability is generally less of an issue.

An analysis of the latest detailed release of labour force data from the Australian Bureau of Statistics shows there has been virtually no change in how the geographic distribution of full time jobs has been divided between the capital city and regional locations of each state.  Since 1978 (when the ABS series commences) the proportion of full time employment located in the capital cities has been between 65% and 67%.

Across the states, Victoria shows the highest concentration of full time labour within the capital city (75.5% of full time jobs are located in Melbourne).  Western Australia and South Australia aren’t far behind, with 73.4% of full time jobs located within Perth and Adelaide respectively.

Queensland and Tasmania have a much higher level of geographic dispersion in the labour market with 47% of full time jobs in Queensland being located within Brisbane and 43% of Tasmania’s full time work force located in Hobart.

The percentage of jobs within the capital cities are roughly equivalent  to the proportion of population residing within the capitals (as would be expected… the population is going to be most concentrated where the jobs are and vise versa).

While the capital cities are always going to the economic and financial centres of the country, a focus on jobs creation outside of the capitals needs to be long term strategy.  There are a lot of challenges that need to be overcome in order for jobs to spread outside the capitals; arguably a high speed transport network (or the lack thereof) is the most obvious one, but there needs to be a lot of other infrastructure such as health care and educational facilities.

As we pointed out in a previous blog, most of Australia’s largest companies insist on being headquartered in a capital city.  In contrast, in the USA many of the most significant US based corporations are located in some of the smaller cities. A good example is Omaha, Nebraska which accounts for just 0.3% of US population and is home to 5 of the top 500 companies in the US.

We need to see more leadership from the Federal and State governments in establishing regional labour markets  by locating Government departments outside the capital cities and creating the infrastructure framework required to lure private business away from the traditional business centres.

About Tim Lawless

Tim heads up the RP Data research and analytics team, analysing real estate markets, demographics and economic trends across Australia

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3 Responses to Jobs remain heavily centralised within the capital cities

  1. Duncan February 24, 2012 at 1:10 pm #

    But governments do not create jobs, and every market they create destroys another, while they may claim to create jobs; private industry and entrepreneurs do before governments greedily take it all back by the way of tax, and in the case of the current government quasi-socialist ideals.
    As an example look how the treasurer tells us that low income earners (that do not pay net tax) are being ripped off by the high income earners (that pay well above the average tax) because they get a rebate on the medicare levy. Total distortion of facts, they are politicians in a government that does not know how to turn a profit, only take from those that do.
    You will know well the imbalance in our economy that tax policy has caused with property (capital gains and negative gearing) and the disproportionate amount of useless investment in granite kitchen bench tops and stainless steel appliances.
    This unfair market drove credit growth through the roof which has increased inflation particularly for shelter while driving up personal debt levels to unsustainable levels. Not to mention the crass attitude from our treasurer when he stabs banks over giving a break to battling working families when he leaves the only choice for banks to recover this through business loans, which is in turn another reason you are seeing this labour market problem in the industries that exist in regional areas because they simply cannot compete.
    How do you have primary markets such as agriculture and manufacturing when living expenses are so high that you cannot compete with imports? Because the tax regime from the government makes so called investors want to get rich sitting in their ass playing the ponzi property market.
    Thanks Tim, the government is the problem here, I suggest not looking for answers in over-pensioned politicians, unless you need them to do more damage fiddling with the playing field some more.

  2. lovelee February 28, 2012 at 7:46 am #

    “Unfair” What the??!!

    Geez Dunc. Doc slapped your bum with the “always treat fairly” stamp eh?
    Lucky you.

    Hope your not a property investor.

    • Paul March 5, 2013 at 2:02 pm #

      Well done Duncan, hit the nail fairly & squarely on the head. What we’ve got to start doing as a community and as a nation of people is stop expecting the government create jobs, manage the economy or fix things. They don’t and they ALWAYS make whatever the problem was WORSE.

      And Lovelee, I’m a property investor – I just can’t believe you are!

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