The last four
articles in this series on ‘the demography of employment’ have focussed on the
evidence around suburban employment in our major metropolitan areas. This final
in the series brings this together and poses a few thoughts about where it may
all lead.
Without revisiting all the research in the last four
articles, the basics about economic life of our metropolitan regions are that
most of the jobs are in suburban locations. In part one, we reviewed how our
CBDs – prominent though they are – account for only around 10% of all metro
wide jobs. That rises to maybe 15% if you include inner city areas. But still,
85% of everyone else who calls Brisbane, Sydney or Melbourne home, works somewhere
other than the CBD or inner city.
Not only that, but the proportion of jobs in the suburbs
versus the city has been rising, marginally. This doesn’t mean that CBD job
markets are shrinking (in the main, they’re not) just that suburban employment
markets are growing faster. So CBDs are becoming, perhaps inexorably, less
dominant.
In part two, the evidence also showed that suburban
employment isn’t distributed evenly but in various concentrations. Some of
these areas add to very large numbers – rivalling the totals found in CBDs –
but they do so at much lower densities of employment. Concentrations of 2000 to
4000 jobs per square kilometre are dense by suburban standards but still only a
fraction of CBD concentrations. For many suburban employment areas,
concentrations are even lower at maybe 500 to 1000 jobs per square kilometre.
While CBD office workers measure their space in square metres (roughly 15 to 20
per person) some suburban workers might measure theirs in hectares.
In part three, we looked at the income profiles of CBD and
suburban workers. Across the three major centres of Brisbane, Sydney and
Melbourne, the research shows that suburban workers, on average, earn considerably
less than CBD workers earn. The top ten income areas city wide are nearly all
inner city areas, and these workers earn more than double the average of the
bottom 10 areas (which are invariably suburban). The average CBD worker, according
to the census, pockets between $80,000 and $90,000 per annum. The average
suburban worker pockets around $50,000 per annum. Given that suburban jobs account
for around 85% of all jobs, the CBD is indeed a privileged centre of income
earning ability. Having said that, there are still interesting pockets of
suburban employment where above average incomes are to be found. The Brisbane
airport and port region, for example, features in the top 10 income earning
locations along with inner city locations, even though the majority of jobs
(62% to 74% according to the Census) are blue collar.
And in part four, we looked at how work locations drive
transit choice. For suburban workers, the private car is the overwhelming mode
of transport (above 80% to 90%), not by choice or because of some ‘love affair’
with the car, but of necessity. The very nature of dispersed suburban
employment makes public transport uneconomic, which is why only around 5% of suburban
workers use it. For CBD workers though, public transport is more widely used
because it’s more available and convenient: more than 50% (and more than 60% in
Sydney’s case) of CBD workers make use of it. The evidence also shows that the
closer you live to the city, the more likely you are to use public transport to
get to your CBD workplace. The proportion of people with CBD jobs falls the
further you live from the CBD: meaning outer suburban residents are highly
unlikely to have CBD jobs and hence only around 3% to 5% use public transport.
Ironically, given CBD jobs earn the highest incomes and are also more likely to
use public transport to get to work, we have a situation where those with the
highest paying jobs are enjoying the biggest benefit of publicly subsidised
(and heavily subsidised) public transport. You could argue on this evidence
that those on lower suburban incomes are subsiding the train and bus fares of
their higher paid CBD workforce cousins.
Now for the future
The evidence is one thing but where it all leads can provoke
any number of alternative scenarios. Just for the sake of discussion, here’s
one possibility: that cost and convenience factors will increasingly work
against CBDs and inner cities and more and more businesses will establish,
grow, or relocate to, suburban employment locations.
It’s possible this shift is already underway. The evidence
shows a slow diminution of CBD prominence. Technology is increasingly reducing
the person to person immediacy and co-location advantages of a highly
concentrated CBD environment. We communicate more and more through electronic
means, which also means physical location is less and less essential to daily
business contact.
Costs are another factor. CBD offices and retail space are
expensive relative to suburban locations. They are worth it in terms of
prestige where this matters, or where central location is important. But as
costs via rents rise, the equation is constantly recalculated. Is it worth
headquartering large numbers of staff in CBD offices when these staff have
limited need for face to face business dealings outside the business? The
cost/benefit analysis is an ongoing exercise and the business press contains
plenty of evidence of companies who increasingly decide the suburban
alternative is attractive. Rising car parking costs – for business visitors and
clients along with staff - are just another factor in the falling competitive
advantage for CBDs.
Employee costs could also be a factor. Even basic
administrative roles in CBD locations command higher pay packets than similar
roles in suburban locations, for whatever reason. If it is possible for
administrative functions to be located in a suburban location where total employee
costs are less, will this become a factor in the trade-off between CBD and
alternative suburban locations?
Congestion may be another. As urban densities rise,
especially around CBDs and inner city areas, congestion of all forms (private
and public transport) will increase. Density is after all almost a synonym for
congestion. Will businesses in increasingly congested CBD or inner city
environments opt for suburban alternatives where congestion is less of an
issue? It’s a moot point.
On the other hand, because CBDs and inner cities feature
such a concentration of social amenity through public infrastructure
(entertainment, cultural and recreational facilities) they may continue to
appeal as residential addresses. Is it possible that as CBDs and inner cities
develop their residential stock, we may find significant numbers of people who
live in CBD locations for the inner city amenity, but who work in suburban
locations? Time will tell.
Planning schemes would have to adapt to any of the above
scenarios. Existing suburban economic areas may need their development density permission
under city plans increased to meet demand. It may make sense to do so,
especially around transit nodes. TODs may become places where people travel to
a suburban workplace centred on a train station or bus interchange, as opposed the
current thinking which is that people will live near suburban transit nodes in
order to work in inner city locations.
Any number of other scenarios are possible and all this
series has attempted to do is present the statistical evidence on the suburban
nature of employment in our metropolitan regions, and make some observations
about the public policy and future development implications. No one can predict
the future but it can be fun just thinking about what might happen. Your guess
is as good as mine.
Thanks for the statistical evidence relied on in this series
must go to Urban Economics – a great
little consultancy whose name says it all. If this series has raised questions
in your mind that you want answered, I suggest you get in touch with them. Please
contact Kerriane Bonwick via kerrianne@urbaneconomics.com.au or phone them on
(07) 3839 1400 if that’s the case.
