Jobs in Melbourne at the Census, city centre vs rest of metro area (source data: SGS)

Here’s Grattan Institute CEO, John Daley, claiming that “half of all jobs growth is now within a 2km radius of the city centres in both Melbourne and Sydney”. And here’s Professor Rodney Maddock from Victoria University telling us Melbourne has a serious problem because:

Most of its job growth is in the CBD, yet most of its population growth is at the far extremes of the city. It’s the same in other big Australian cities, like Sydney.

But there’re two problems with the assertion that “most”, or even “half”, of jobs growth is in the city centre:

  • First, it’s not true; most job growth is outside the city centre
  • Second, there’s much more to the geography of employment than “growth”; the great bulk of workers occupy existing jobs.

Let’s look at the Census data on employment for 2006 to 2011 in Greater Sydney and Greater Melbourne (GCCSA) and in their corresponding city centres (SA3).

It shows the municipality of Melbourne – the CBD and nearby areas – added 123,675 jobs over the ten years from 2006 to 2016. That’s a remarkable 42% increase over the period. It was certainly big enough to stress Melbourne’s CBD-focussed public transport system.

But what often gets overlooked by commentators is that jobs also grew in the rest of the metropolitan area. The number of jobs outside the city centre grew by a less spectacular, but nevertheless mighty, 30% over the ten years. Because it has many more jobs, the rest of the metro area added a whopping 381,325 jobs. That’s three times as many new jobs as were created in the city centre.

So, the city centre didn’t generate “most”, or even “half”, of Melbourne’s job growth over the last ten years. In fact, it accounted for 24% of all employment growth in the metropolitan area over this period.

The other important point is that looking solely at growth misses the main story. Only 20.5% of all jobs in Greater Melbourne were in the city centre in 2016. Notwithstanding faster growth, that was only marginally more than the 19.2% share it had ten years earlier. And it’s still a long way from the circa 24% of metro jobs the municipality of Melbourne had in 1981.

Put another way,  the great bulk of jobs in all of Australia’s capital cities are located outside the city centre. In 2016, 79.5% of jobs in Greater Melbourne were outside the municipality of Melbourne, down slightly from 80.8% ten years earlier. In fact, most jobs – around 70% – are more than 5 km from the city centre and half are more than 13 km from the centre.

The pattern was similar in Sydney between 2006 and 2016. Jobs grew 39% in the city centre compared to 25% in the rest of Greater Sydney, but again the increase in the number of jobs was smaller in the centre i.e. 138,562 vs 340,438.

In Brisbane and Perth – the next two largest cities – the city centre actually lost ground; jobs grew more slowly in both absolute and percentage terms than in the rest of the metro area. The share of all Greater Brisbane’s jobs in the centre declined from 20.8% in 2006 to 19.0% in 2016; the corresponding change in Perth was a large drop from 24.7% to 21.9%.

There’s no question the jobs concentrated at very high density in the city centre are extremely important for the regional and national economies. They tend to be high-pay, high-skill jobs. That’s the nature of the CBD. But it’s not where the great majority of jobs are located at present or are likely to be in the future. It’s not where the average worker will most likely find employment. We won’t have good policy on cities if we don’t get our understanding of the baseline right.

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