THE % SHARE OF JOBS IN ONE KILOMETRE WIDE CIRCULAR BANDS RADIATING FROM MELBOURNE TOWN HALL

First there were ‘food deserts’, then ‘transit deserts’, now ABC TV News informs us Australian cities also have ‘job deserts’ in the suburbs, especially in newer, fringe areas (7:00 pm, 11 June 2019):

Newsreader: Matching where people work and where they live is a growing issue for state governments. New analysis has revealed outer urban areas of capital cities like Melbourne are effectively job deserts while the city centres attract jobs like a magnet.

The narrative here is the jobs aren’t where people live; they’re in the city centre, not the suburbs, necessitating long commutes, especially from the newer fringe suburbs. The item goes on to imply governments should regulate the market so more employers locate in the suburbs, close to where workers live (see full transcript at end).

The idea that the workforce should be ‘balanced’ by jobs in every municipality (Melbourne has 31) is popular among planners. It’s easy to see why the media like to point out where matching has failed. But it’s misinformed on a number of critical points.

First, jobs are more centralised than population in every city in the world. There’s nothing remarkable or insightful about that; it’s a commonplace. It’s been like this throughout history. This isn’t just “the market”; government agencies and non-profits behave the same way.

Employers, whether public or private, want to be near to each other, to suppliers, and to amenities. They also want to be located to maximise the number of customers and workers they can attract; that’s done by locating in the centre of a circle (a catchment), not on the edge.

Second, only a minority of Melbourne’s jobs are nevertheless in the CBD. As the exhibit shows, around a quarter of jobs are more than 22 km from the city centre; around half more than 13 km away; and around three-quarters more than 4 km away. Only 10% of metropolitan jobs are located in the 2 sq km that comprise the Hoddle Grid (we imagine it’s more because of the high density i.e. tall office buildings).

The great bulk of jobs in Melbourne are in the suburbs, in part because some activities, like warehousing, need a lot of space. But it’s mainly because most jobs in a modern economy serve the local population directly e.g. in supermarkets, hairdressers, doctors, schools.

The number of jobs in fringe suburbs eventually increases as population grows and the boundary moves further out (although the local workforce might still exceed the number of jobs). Workers will in any event travel beyond the local area for a better job e.g. like those in the distant city-centre.

Third, the suburbs are adding more jobs than the city centre. While the rate of growth is higher in the city centre than in the suburbs, the latter have a lot more jobs. The City 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’s a lot faster than the 30% growth in the rest of the Melbourne metro area over the same period. But because it has many more jobs, the area outside the City of Melbourne added a whopping 381,325 jobs. That’s three times as many new jobs as were created in the city centre.

Fourth, the average journey to work for outer suburban residents isn’t appreciably longer than that of more centrally located residents. It’s 40 minutes, one-way. That’s essentially the same as the average commute of residents of middle ring suburbs (39 minutes) and only a little longer than that of inner ring residents (36 minutes).

It’s not much different when just car commutes are considered. The 87% of outer suburban workers who commute by car average 36 minutes for the journey. Again, that’s only a little longer than the average for middle ring and inner ring workers who drive; they both average 32 minutes.

The work journeys that are really long on average are made by the 11% of outer suburban residents who commute by public transport, mostly to the city centre. Their one-way commute averages 78 minutes, considerably longer than that of middle ring and inner ring public transport commuters (64 and 48 minutes, respectively).

Fifth, governments at all levels have been conspicuously unsuccessful in increasing the number of jobs in fringe suburbs above the trend. They can stop jobs growth, as well as rebalance the distribution somewhat through planning policy and provision of infrastructure, but attracting employers to fringe suburbs from the city centre on any sort of scale is extremely difficult.

That’s because employers who pay the stratospheric rents of the city centre and tolerate the associated high levels of congestion do so for compelling reasons; to be near other firms and activities, and to attract workers from across the metropolitan area. These are jobs worth commuting long distances because they pay well.

Even major suburban activity centres haven’t drawn employers away from the centre in large numbers. There’re only nine significant suburban centres in Melbourne and they collectively account for just 5% of all jobs in the metropolitan area. With the exception of Frankston, they’re all in middle ring suburbs (and only one – Heidelberg – is north of the Yarra).

Sixth, government can’t force major employers to decentralise from the centre without risking reduced productivity or seeing them move to another city. It also faces enormous difficulties in approaching it from the other direction i.e. increasing population in the job rich inner city and slowing it down in the outer suburbs.

It can however reduce obstacles to employers that do want to locate in the suburbs e.g. remove restrictive planning practices. It could also assess whether the cost of locating in the centre of Melbourne is artificially low relative to suburban locations.

The key action though is reducing commuting time by improving transport infrastructure, especially in some locations (e.g. Wyndham, in Melbourne’s west) where commutes are longer than the average for outer suburbs.

Here’s my transcription (ABC News Vic, 11 June 2019, 12:00 minute mark):

Newsreader: Matching where people work and where they live is a growing issue for state governments. New analysis has revealed outer urban areas of capital cities like Melbourne are effectively job deserts while the city centres attract jobs like a magnet. And workers are literally paying the price for companies that set up in the CBD.

Reporter: At Wyndham, 32 kilometres south-west of Melbourne, the station car park is full by 7:30 in the morning. For most, work is a 45-minute commute away. How long each day do you commute?

Commuter: One and a half hour, (?).

Reporter: Between 2011 and 2016 Wyndham added 37,000 fewer jobs than residents. In Melbourne three huge areas effectively act as dormitory suburbs. Melbourne’s centre is magnetic: it added almost 35,000 more jobs than residents between 2011 and 2016. The city centres of other state capitals are sucking in workers at a similar rate.

David Chalke: The real problem is not people living out in the regional areas but it’s in the outer metropolitan areas, it’s the urban fringe, that’s where the jobs are needed

Dr Kate Shaw: The economic and social and environmental costs of people travelling large distances every day are huge.

Reporter: David Chalke says governments need to do more to spread jobs to where people live

David Chalke: Businesses tend to cluster together with other like businesses and the services that support them, and that means the CBD.

Reporter: That concentration exists in Brisbane, Adelaide and Perth. The pressure comes off Sydney in part thanks to Parramatta. The Census tells us there are almost one million workers in the centre of Melbourne and Sydney alone. Dr Shaw says businesses buying offices in the city essentially shift the cost of getting workers there to the workers themselves.

Dr Kate Shaw: So, we can talk about activity centres and twenty-minute cities and thirty-minute cities until the cows come home, if we don’t actually put in mechanisms to regulate and control market behaviour it’s not gonna happen.

Reporter: Governments are spending billions on infrastructure just to get people to work. But commuters are asking: why can’t the jobs come to them? Government attempts to decentralise jobs have had mixed results. Workers are urging them to keep trying.