Peninsula more vulnerable than average to job losses

Peninsula suburbs have a higher than average vulnerability to job losses in an economic downturn, according to a report issued by the University of Newcastle.

Professor Bill Mitchell of the university's Centre of Full Employment and Equity was co-author of an updated Employment Vulnerability Index, which maps suburbs that are susceptible to economic and social disadvantage due to the coronavirus pandemic.

He said that Peninsula residents were "quite vulnerable" to employment loss as the national economy contracts.

Suburbs were ranked in four categories - high risk, medium high risk, medium low risk and low risk - with Peninsula suburbs listed in the second highest risk category.

The Woy Woy-Blackwall profile rated highest in the medium high risk category.

Umina-Booker Bay-Patonga fell roughly in the middle of the pack.

Professor Mitchell said: "The unfolding Covid-19 pandemic has delivered significant economic and social pain with the worst affected being the people who lose their jobs.

"If an area has a significantly higher proportion of its citizens that haven't gone on to tertiary study then that shows up as a risk factor, too, because they're likely to be in lower skilled jobs and, typically in a recession, those lower skilled jobs go first.

"Another factor in an area of high-risk unemployment is the proportion of part-time or casual workers, and they are usually the first ones to go when a business starts to struggle."

Every suburb on the Peninsula listed in the report recorded higher than NSW and Australian averages in relation to the percentage of part-time workers, the percentage of people without post-secondary school qualifications and people employed in industries which would be most impacted in economic downturn.

The report said of the Peninsula: "It has an older population relative to NSW average and, in terms of post-secondary qualifications, education levels are below the NSW average and this increases the likelihood that the suburb will experience job losses in an economic downturn.

"Individuals on the Peninsula earn less than the median individual income for NSW, while median family income is less than the median family income in NSW.

"Peninsula mortgage holders are making monthly payments which are below the median NSW mortgage repayment.

"The workforce is more likely to be part-time employed relative to the NSW average, and its labour market performance summarised by its overall unemployment rate, relative to NSW, is poor."

"Predictions place the unemployment rate moving toward double digits over the next few months, a level not seen since the economic downturn of the 1990s," Professor Mitchell said.

"People in particular industry sectors; those with low skills and those employed in casual or part-time positions will likely see their employment opportunities diminish.

"The forced shutdown of many businesses due to public health requirements has meant the worst affects have been seen in retail, personal services, accommodation, cafes and restaurants, air transport, with potential flow on effects to manufacturing, mining, construction, finance and real estate.

"We are likely to see that existing disadvantaged places become more disadvantaged as employment options shift, and we are likely to see a new breed of disadvantaged places following in their wake, as once stable labour markets begin to decline.

"Clearly the government needs to target the lack of jobs problem and consider policies, which will ensure the distribution of job opportunities," Professor Mitchell said.

"During the Global Financial Crisis, for example, the sort of data we produced was very useful for governments to identify several regions for priority regional development stimulus."

He said the report "allows governments to immediately understand where the jobs are going to be lost when the economy's approaching recession and to target the epicentres of the problem for fiscal stimulus.

"The aim is job creation programs, and for example, you wouldn't really pump money into one of those inner northern Sydney suburbs where there's little job loss if the economy goes really down.

"You'd be looking to stop unemployment rising significantly through job creation programs in local council areas that were at risk."

Professor Mitchell said this "coronavirus version" is the third Employment Vulnerability Index - the first was in 2009 at the start of the Global Financial Crisis, and the second two years later in 2011.

His co-author was Professor Scott Baum, a member of Griffith University's Cities Research Institute and Policy Innovation Hub.

SOURCE

Media release, 19 May 2020

Interview (Sue Murray), 23 May 2020

Bill Mitchell, University of Newcastle