Scottish-born economist - Angus Deaton - recently published his new book - An Immigrant Economist…
This afternoon I am off to Brisbane to appear in tonight’s SBS TV Insight Program, which is focusing on unemployment. The program airs live from 19:30 tonight on SBS One. The on-site location for tonight’s show is Logan City, which is south of Brisbane on the way to the Gold Coast. In the work I did with Scott Baum at Griffith University earlier this year developing an Employment Vulnerability index, we identified the Logan City area as having a concentration suburbs which we considered to be at high risk of job loss. So SBS decided to conduct a ground level exploration of the sorts of considerations that expose a region to job loss and to develop narratives that inform us of how people in battling areas cope with economic downturn. While the topic is depressing it is excellent that one of our national TV broadcasters is actually elevating it to national importance.
I wrote previously about our Employment Vulnerability index. which identifies the suburbs across Australia that are most vulnerable to job losses as a result of the current economic crisis. The index was based on an economic model we created to predict the employment vulnerability suburb by suburb. The EVI covers all the Capitals and major regional cities – that is, around 70 per cent of the total population.
The EVI reveals those suburbs – Red Alert and Amber Alert suburbs – which are most exposed to potential job losses and least well placed to escape disadvantage associated with increasing unemployment. The high risk suburbs include the traditional battler suburbs. But what is disturbing is that we have also identified a new arena of socio-economic disadvantage that will emerge as a result of the current crisis. The new arenas include the mortgage belt suburbs that have grown on the periphery of our major cities and are now groaning under the burden of the neo-liberal debt binge.
Logan City, site of tonight’s program was chosen because it contained many red-alert EVI suburbs and a mixture of traditional battler and what we termed emerging disadvantaged suburbs. The traditional battler suburbs such as Woodridge, Kingston, Logan Central and Logan Lea are all heavily reliant on low-skill manufacturing for their employment. A little further south and west of these suburbs lie the newer settlements in Logan City which include Marsden, Waterford West, Crestmead, Heritage Park, Browns Plains, Regents Park, Hillcrest down to Greenbank etc. These suburbs also have a reliance on Manufacturing employment and generally below the state and national average educational levels. But they have not typically been considered to be sites of entrenched disadvantage. But their potential for job loss is high and young families in these areas are carrying significant debt levels.
In some of the suburbs, unemployment rates of 14 per cent (in December 2008) were common (for example, in the Kingston and Woodbridge areas) even though the average for the overall city was around 5.6 per cent (December 2008). The suburbs along the South East Highway (from Brisbane to the Gold Coast) tended to have very low unemployment rates. So the city as a whole has unemployment rates above the national and state (Queensland) average but underlying that is a huge diversity (the lowest being 1.7 per cent in Rochedale South and the highest being 14.1 per cent as noted).
It is important to note that the EVI was a risk assessment tool and doesn’t tell us anything about what is actually happening. The EVI tells you what is likely to happen based on known risk factors in each suburb if the Australian economy entered a protracted economic downturn with no policy intervention. As time has passed, it is clear that there has been a substantial and early fiscal intervention (supported to some extent by reduced interest rates which if nothing take some of the pressure of families with high debt levels and declining incomes).
It was our intention to use Small Area Labour Market data produced by the Department of Education, Employment and Workplace Relations on a quarterly basis to then track how each of the regions is faring as the economy slows. However, DEEWR has delayed the release of the latest data (which was due in early June) because they are updating their geographic boundaries from the 2001 Australian Standard Geographical Classification (ASGC) to the 2006 ASGC. So the latest data is December 2008.
Further, the ABS Labour Force data has some information about this area (being contained within the South and East Brisbane Statistical Division Balance Statistical Region) but unfortunately this area is too big and includes regions beyond Logan City. So that data is telling us that unemployment is falling (especially after the stimulus packages) and participation rates are holding up which means that employment growth has been solid since the national slowdown began. But this is not going to say much at all for the really disadvantaged areas in Logan City.
You can get some impression, however, from the DEEWR Labour Market and Related Payments Monthly Profile data which is collected from Centrelink offices about shifts in Newstart and Youth Allowance claimants (unemployment benefits). The Centrelink office in Woodbridge (near Logan Central) records that between December 2008 and June 2009 claimants rose by 835 or by 59.8 per cent. This data understates the actual rise in unemployment because not all job losers apply for benefits. Other Logan City area offices Beenleigh and Brown’s Plains had similar increases in claimants over that period.
Given the region is heavily reliant on manufacturing employment and its workforce, generally has below average part-time employment (because of its industrial focus), it is a fair bet that the disadvantaged areas in the old battler suburbs of Logan will be experiencing significant rises in unemployment already. The region has been identified as one of the Federal Priority Areas.
Anyway, if you are interested, watch the program live tonight and see what I and others (particularly those who live in the area) have to say about the current situation and the potential solutions. You will guess that I will be advocating large-scale direct public job creation and larger deficits.
I will also be providing responses to people who participate in the show’s on-line chat from 20:30 (immediately after the show) for about 45 minutes.