There are 23 million people living in Australia; half (11.5 million) have a job.
The number of people with a job drives consumer spending and ultimately the demand for mortgages and housing. Unless there’s a particularly sharp rise in unemployment the workforce can expand by anywhere between 10,000 and 40,000 workers per month.
The total number of people unemployed in Australia in May 2012 was 622,000, or 5.1 percent of the available labourforce.
Add to this about 800,000 on some form of disability benefit and there’s close to 1.5 million Australians of working age who live on welfare.
But there are some parts of Australia where welfare dependency is generational and structural.
The Department of Education Employment & Workplace Relations publishes quarterly estimates of the unemployment rate by local government area throughout Australia.The most recent data relates to the December quarter.
At that time, the community with the highest unemployment rate in Australia was the indigenous township of Woorabinda, 200km inland from Rockhampton. This town, with a labour force of 356 (and a population of double that number), had an estimated unemployment rate of 76.4 percent. Press reports show that Woorabinda is also challenged with crime and by anti-social behaviour issues.
In some cases, the unemployment rate reflects social dysfunction as much as a lack of work opportunities. Within metropolitan Australia the highest levels of unemployment are to be found in places like Brisbane’s southside, where 19.6 percent of the population at this time was unemployed.
Woodridge is, of course, a public housing enclave where the unemployment rate is four times the national average. The unique employment profile of Woodridge and associated suburbs such as Kingston and Inala is put into context by the fact that the highest unemployment rate in Sydney at this time was 11.6 percent in parts of Bankstown, while in Melbourne it was 12.1 percent in Broadmeadows.
The Woodridge figure is, however, exceeded in the Adelaide suburb of Elizabeth where the proportion of the labour force unemployed last December was 20.8 percent. In Perth’s industrial suburb of Kwinana the unemployment rate reaches 9 percent.
At the other end of the scale, unemployment can get below 2 percent in mining towns such as the former Shire of Belyando (Moranbah) in the Bowen Basin and in the Shire of Ashburton (Pannewanica) in the Pilbara. But even in wheatbelt communities the unemployment rate rarely exceeds 2 percent, although this is most likely because those who are unemployed leave the district.
In selected indigenous communities the option of leaving town to find work is either culturally unacceptable or is simply not pursued. Public housing enclaves, especially those in Brisbane and Adelaide, contain communities that are most likely afflicted with generational unemployment: it’s not just a matter of skilling the unemployed since there are social and lifestyle issues that also have to be surmounted.
In the elite suburbs of most capital cities the unemployment rate is barely 2 percent. This applies in places like Sydney’s Mosman, Melbourne’s Docklands, Brisbane’s Albany Creek and Perth’s Nedlands.
For the most part, this nation’s unemployed are scattered throughout the metropolitan area clustering in public housing estates and eschewing the genteel middle class suburbs.
There are few people unemployed in remote rural communities; some unemployed cluster in lifestyle towns like Coolangatta and Cairns, but rarely does this rate exceed 10 percent.
Shopping centres and housing estates positioned within the vicinity of this nation’s unemployment hotspots cannot but be impacted by the diminished spending capacity of the local community.
But there are other issues: systemic generational unemployment also coincides with behavioural and anti-social behaviour that can have direct property management implications.
In an ideal world, the disparity between suburbs and regions in the unemployment rate would be reduced, but the reality is that these differences are likely to remain for years, if not decades, to come.
A cynic might argue that this nation’s unemployment benefits and other social welfare payments are, in fact, vital to ensure the security of the nation: it is an insurance premium to protect against revolution or civic unrest.
The Australian nation embraces the ideal of an egalitarian society; this analysis suggests that there are in fact some parts of the nation where this ideal is not being achieved.
The implications are that shopping centres such as the Elizabeth Town Centre in Adelaide and the Logan Hyperdome in South East Queensland, for example, should be configured very differently in comparison with other centres throughout Australia: less upmarket retail product and more value-based retail outlets.
This also has implications for residential house prices: areas of generational unemployment are unlikely to support growth in the intrinsic value of residential property.
Consider the role that “extreme demographics” might play in the management, configuration and operation of retail and other property assets in the unemployment hot spots of Australia.
Bernard Salt is a KPMG Partner and an adjunct professor at Curtin University Business School; bsalt@kpmg.com.au
