"Centre of gravity" of jobs, 1981 and 2006

There are many misconceptions about the suburbs. A common one is that they are dormitories for workers who commute to the CBD. Another is that jobs in the suburbs are mostly low skill and low pay.

The reality is most economic activity in our capital cities takes place in the suburbs. In Melbourne, for example, 72% of jobs are more than 5 km from the CBD, 50% are more than 13 km away and 25% more than 22 km away.

Jobs have been moving away from the centre for a long time. The “centre of gravity” of jobs in Melbourne is now 7.9 km south east of the CBD, in the vicinity of Tooronga station, East Malvern. That’s up from 5.9 km in 1981. The “average”  job is 15.6 km from the CBD (12.4 km in 1981).

This decentralised pattern holds for most industry sectors. More than 70% of jobs in the Community sector and more than 80% of jobs in the Retail, Wholesale and Manufacturing sectors are in the suburbs (defined as more than 5km from the CBD). Even in the Commercial Services sector, which is the inner city’s great strength, 49% of metropolitan jobs are in the suburbs.

Over 90% of Melburnites live in the suburbs and the great bulk work there too. Less than 10% of workers who live in outer suburbs like Casey, Cardinia, Dandenong, Knox, Maroondah, Mornington work in the centre (City of Melbourne). Even in older suburbs like Hobsons Bay, Brimbank, Maribyrnong and Moonee Valley, less than 25% of the workforce works in the centre.

The view that the suburbs only have low-skill jobs is inaccurate. In fact, the majority (58%) of jobs in Melbourne occupied by a graduate are located in the suburbs. Around 80% of all graduate jobs in the largest sectors are located in the suburbs. The exception is the Commercial Services sector, where the suburbs account for a still-respectable 33%.

Most suburban jobs are spread at relatively low densities. As I’ve pointed out before, even on a relatively generous definition of what constitutes concentration, only 20% of suburban jobs are located in activity centres.

Those jobs are in 31 centres, most of which are small and all of which are very low density compared to the CBD. Many cover a substantially larger area than the 400 metre walk distances implied in Melbourne 2030.

Nine of the centres account for half of the jobs in suburban centres. All centres except one have a pronounced specialisation in at least one of sixteen industries. Nearly all also have a clear specialisation in graduate jobs in at least one sector.

Thus the suburbs are not a mere dormitory but a major job arena. This can easily go unnoticed because of the low density of activities compared to the inner city and particularly the CBD.

The Community Sector – which includes jobs in the Health, Education, Culture and Government industries – is a key reason why the suburbs have so many high human capital jobs. It also partly explains why jobs tend to be dispersed away from activity centres – schools and many smaller health facilities, for example, tend to be located closer to population.

The thing about Melbourne’s suburbs is that apart from Manufacturing (which has declined dramatically in importance), most jobs are in consumer-oriented sectors. They are there to serve the suburban population which, over time, has out-sourced more and more activities from the home.

Unlike many US cities and even Sydney, Melbourne does not seem to have attracted non-consumer jobs away from the CBD to the suburbs in large numbers. Where this is occurring it appears to be mainly in the inner city and some parts of the inner eastern suburbs.

There’re some interesting issues implied by this analysis.

First, what sort of sustainable transport policy should be pursued when 90% of the population and 72% of jobs are at low densities in the suburbs? Four fifths of suburban jobs are spread out and even those that are in centres are at low density. There is a major legacy issue here.

Second, how successful will the Government’s policy of creating six large suburban “CBD-type” Central Activities Districts be when suburban firms largely eschew density?

Third, does the ability of the CBD to expand outwards into areas like Docklands limit the pressure on firms to locate in suburban centres?