A KEY POLICY IN THE GOVERNMENT’S STRATEGIC PLANNING DOCUMENT DIRECTIONS 2031 AND BEYOND IS THE PROMOTION OF EMPLOYMENT SELF-SUFFICIENCY TARGETS, BUT WHAT ARE THESE MEASURES AND WHAT INFLUENCES THEM?
Where we live and work has important implications on our lives. Most of us have to strike a balance between how close we want to live to where we work, where other amenities are, such as schools or a beach, and the cost of living in these areas.
It is no surprise then that location was the most important factor driving housing choice in a recent surveypublished by the Departments of Housing and Planning. This result was a common theme across all demographic groups and household structures.
Bearing this in mind, the State Government’s strategic planning document Directions 2031 and Beyondidentifies that Western Australia’s economic prosperity and the sustainability of communities require a diversity of employment spread across many locations. And fundamental to the State Government’s policy are two key terms that measure a local area’s capacity to provide economic sustainability: employment self-sufficiency and employment self-containment.
EMPLOYMENT SELF-SUFFICIENCY
Employment self-sufficiency (ESS) is the ratio of local jobs to the local labour force and is a measure of local economic dynamism. In new outer suburban areas ESS will be relatively low (<100%) as there are fewer jobs than workers while in inner areas ESS is generally high (>100%) as there are more jobs than workers to fill them.
The highest ESS of any Local Government Area in Greater Perth is the City of Perth with a rate of 1,310 per cent (1,310 jobs for every hundred resident workers). The Shire of Serpentine has the lowest ESS in Perth with a rate of 36 per cent (36 jobs for every hundred resident workers).
EMPLOYMENT SELF-CONTAINMENT
Employment self-containment (ESC) measures the proportion of local residents who work locally, which may change over time as the population changes and businesses evolve. A high self-containment implies there are many jobs in an area which employ local people.
WHY ARE ESS AND ESC IMPORTANT?
The aim of improving ESS and ESC is twofold:
1. to provide employment opportunities within a reasonable distance to the place of residence to reduce the time it takes to travel to work which contributes to environmental and social sustainability, and
2. to enhance the economic sustainability of outer suburban areas.
The majority of readers would have noticed the pressures unprecedented population growth has put on Perth’s transport system, leading to congestion and increased travel times of which the economic and social costs are high. The Bureau of Infrastructure, Transport and Regional Economics (BITRE) estimated urban congestion will cost families and businesses more than $20 billion by 2020 if we persist with current policies, with the cost in Perth estimated at $2.1 billion.
AGGLOMERATION AND EMPLOYMENT CENTRES
The promotion of decentralised employment centres plays a key role in creating self-sufficiency at a district and regional level. When organisations within similar industries form clusters of economic activity, competition drives higher productivity and economies of scale takes effect (e.g. companies share the cost of infrastructure). Externally, higher productivity often leads to the establishment of other businesses that support these productive organisations in the region.
The push for employment centres is not new in Perth. Residents of Perth and its surrounding suburbs have historically congregated to growth centres that are characterised by high ESS. Based on the 2011 Census of Population and Housing, 63 per cent of workers in Greater Perth live and work in the same planning region and just 14.5 per cent work in the Perth CBD. Established industrial sub-regions such as Rockingham, Kwinana and Peel are examples of areas that have been founded on large scale investment, supporting a range of industries including engineering and mining.
ESS TARGETS NO PANACEA
This article does not endeavour to give a critique of ESS targets, but we should remember that ESS and ESC are unsophisticated measures and should not be the sole key performance indicators.
The advent of a fly-in fly-out workforce has an obvious impact on the assessment of employment self-sufficiency. The trend to home-based business and working from home, for example mobile construction and trades workers, also appears to be growing in outer suburban areas (2.4 million employed Australians work some hours at home in their main job). Furthermore, it is not just distance to employment, but access; access to public transport, parking and uncongested roads.
All these factors and more will have a noticeable impact on the consideration of employment self-sufficiency and the scale of employment provision. A holistic approach, therefore, has to be taken in which employment strategies and economic development policies are supported by the government with the necessary transport and communication infrastructure without which employment centres will not be sustainable.
Consideration also has to be given to the long term nature of employment generation activities. The achievement of local economic sustainability is an evolutionary process; it can be enhanced and accelerated, but it cannot be delivered instantly, alongside the roads, services and houses.
VIEW EMPLOYMENT CHARACTERISTICS IN YOUR AREA
The Institute has prepared an interactive spreadsheet that enables you to better understand the employment opportunities in your area. It provides an industry by industry breakdown for each Local Government area, including estimates of ESS and ESC, and method of travel to work data. Access the Employment Patterns Tool here