The suburbs most affected by COVID-19 employment vulnerability

New research from Monash University reveals the Australian suburbs hardest hit by COVID-19 employment vulnerability in the nation’s capital cities and finds the most vulnerable areas contain large shares of service employment and lack a diverse employment base..

Key findings

• COVID-19 restrictions have impacted service workers most severely, particularly those who live in the high cost, jobs-rich inner suburbs.
• The most vulnerable employment communities are concentrated in Melbourne’s inner suburbs. About 30% of vulnerable workers living in the inner suburbs work in arts, entertainment, and education industries.
• The most vulnerable employment areas include shopping districts (Chadstone and Highpoint Shopping Centres in Melbourne); university districts, and cultural and recreation areas Paddington-Moore Park (Fox Studios, Entertainment Quarter, Paddington Markets) in Sydney and Hillarys (Westfield, AQWA Aquarium) in Perth are among the most at risk
• Researchers anticipate a second wave of COVID-19 employment vulnerability to hit in September 2020, when the Federal Government’s JobKeeper program expires.

Monash University has today released the report titled “Navigating Economic Uncertainty in Post-Covid Cities: Employment Vulnerability and Resilience in Australian Capital Cities” , co-authored by Professor Carl Grodach and Declan Martin with Alexa Gower, Associate Professor Liton Kamruzzaman, Deepti Silwal, and Dalex Truong from Monash University’s Faculty of Art, Design and Architecture.

Locations most heavily impacted by COVID-19 employment vulnerability

The report identified key locations in Australia’s capital cities where employment was most heavily impacted by COVID-19 restrictions. Nationally, locations heavily impacted by COVID-19 employment vulnerability include Chadstone in Melbourne, Paddington (Fox Studios, Entertainment Quarter, Paddington Markets) in Sydney and Southbank (National Gallery of Victoria, Centre for Contemporary Art) in Melbourne.

Airport precincts were also identified as vulnerable employment areas including Adelaide, Melbourne, and Sydney airports which contain sizeable proportions of accommodation, food services, and retail alongside air travel.

The research also identified at-risk areas close to higher education institutions with significant consumer and/or non-essential medical services nearby including St. Lucia (University of Queensland), Kensington (UNSW), and Carlton (University of Melbourne). While Clayton is home to Australia’s largest university (Monash University, Melbourne), the area’s more diversified industrial employment base softens the employment impact.

Second wave of employment vulnerability expected in September 2020

The research found a first wave of COVID-19 employment vulnerability due to social distancing and travel restrictions, predominantly impacting consumer, travel, and community services including accommodation, food services, transportation, arts, recreation, entertainment, non-essential healthcare services, and education.

Researchers anticipate a second wave of COVID-19 employment vulnerability to hit in September 2020, when the Federal Government’s JobKeeper program expires. The second wave of COVID-19 employment vulnerability is expected, for businesses reporting uptake of the Federal JobKeeper program (e.g. administrative support services, construction, manufacturing). These areas also may be further weakened by slow local demand and investment (e.g. construction and real estate) or continued disruption of global export and supply chains (e.g. manufacturing, mining) under future Covid-19 outbreaks or protracted recession.

Service workers most heavily impacted by COVID-19 restrictions

The most vulnerable employment communities are concentrated in Melbourne’s inner suburbs. About 30% of vulnerable workers living in the inner suburbs work in arts, entertainment, and education industries. While, the most resilient places are those that contain a more diversified industrial employment mix and do not rely on any single industrial sector.

While a smaller share of vulnerable workers live in the outer suburbs, these communities are home to more people that work in low-wage, part-time vulnerable employment. The report found 66.7 per cent of low and very low-income vulnerable workers live in the outer suburbs compared to 47% in the inner suburbs and 60.5 per cent of vulnerable workers live in outer areas work part-time.

“The economic burden of Covid-19 restrictions falls hardest on service workers, particularly those who manage to live in the high cost, jobs-rich inner suburbs,” Professor Carl Grodach from the Faculty of Art, Design and Architecture said.

“The most vulnerable employment areas contain large shares of service-based employment and lack a diverse employment base. The most resilient places are those that contain a more diversified industrial employment mix and do not rely on any single industrial sector,”

“Cities need to focus on building a more resilient and diverse job mix and reduce the dependence on a service-driven economy.

“This can be accomplished through renewed attention to industrial land and mixed-use employment areas as well as investing in workforce programs linked to educational recovery. There is also benefit in supporting essential community infrastructure and employment hubs in the outer suburbs.”

Key recommendations

The report made the following recommendations, to support more equitable and resilient communities  and address the lack of place-based economic diversity:

• Preserve existing inner and middle suburban industrial land, which plays a significant role in small enterprise start-up, firm expansion, and job creation. Inner and middle industrial districts provide a mix of flexible industrial buildings, allowing businesses to grow and add quality jobs in place.
• Develop mixed-use employment areas that incorporate light industrial production. Examples include the Commercial 3 Zone in Melbourne
• Rethink the business mix in service-based retail areas and employment communities. Retail vacancy rates were growing prior to the pandemic and may accelerate as on-line retail grows.
• Build community infrastructure and employment hubs in the outer suburbs.
• Support the interdependence between manufacturing and creative industries. Inner city areas are overly focused cultural consumption resulting in low-road employment opportunities.
• Invest in workforce skills building programs tied to educational recovery in key areas like “essential manufacturing” (medical supplies, recycling, food) and communications technologies.

Read more of Professor Grodach’s commentary on how COVID-19 could impact urban planning and cities at Monash Lens.