Economy

Labour Force

There have been significant changes in the New South Wales labour force over the past three decades, relating to occupational structure, labour force participation and the relative share of part-time employment.

There have been significant changes in the NSW labour force over the past three decades, relating to occupational structure, labour force participation and the relative share of part-time employment.

Overall the NSW labour force increased from 2,258,000 in 1978 to 3,585,000 in 2008 and the labour force participation rate increased slowly over the same period, from 60% of the population aged over 15 years to 63%. The gender composition of the NSW labour force has changed significantly over the past three decades, driven by the increase in female labour force participation. In 1978, the labour force was dominated by males who made up 64% of the State labour force. By 2008 this had declined to 55%. This significant change is shown in the Labour Force Participation graphs below. The number of females participating in the labour force almost doubled during this period, from 821,000 to 1,614,000, as the female participation rate increased from 43% to 56%. Conversely, the number of males in the labour force increased by only 37%, from 1,437,000 to 1,971,000 and the male participation rate actually fell from 78% to 71%.

During the period 1978 to 2008, total employment in NSW grew by 61%, from 2,116,000 to 3,414,600. One of the major changes over this period was the growth of part-time employment, which tripled from 316,000 to 946,600. In contrast, full-time employment grew by only 37%.The relative share of part-time employment almost doubled, from 15% of total employment to 28%.

Historically, part-time employment has been dominated by females. While this remains true, the female share of part-time employment declined from 78% of all part-time employment in 1978 to 70% by 2008. Part-time employment has increased for both males and females during this period. The proportion of males working part-time increased from 5% to 15%, while the female part-time employment rate rose from 32% to 43%.

The increase in part-time employment arises from factors related to both labour supply and labour demand. On the supply side, the increase in part-time employment reflects the preferences of some workers, predominantly females, to combine work with caring responsibilities, study or other activities. On the demand side, higher levels of part-time employment reflect the fact that the economy has not produced enough hours of work over this period to satisfy the desires of workers. Many part-time workers would prefer to work on a full-time basis or to work additional hours and there is now significant underemployment in NSW as a result. Other demand-side factors reflect the preferences of employers for increased flexibility, particularly in the retail and service industries.

The occupational composition of employment in NSW varies significantly by Labour Force Dissemination Regions (hereafter regions), which is the geography the ABS uses to disseminate Labour Force Survey data. This variation reflects differences in industry structure across the regions in NSW. In 2008, professionals accounted for the highest proportion of employment, comprising 22% of total employment in NSW. The second highest proportion of employment is shared by Technician and Trades Workers, and Clerical and Administrative Workers, both accounting for a further 15% of total employment. Of the remainder of the employed 13% are Managers; 11% are Labourers; 9% are Sales Workers; 8% are Community and Personal Service Workers, and 7% are Machinery Operators and Drivers.

There are stark contrasts in the occupational composition for each region between Sydney and the remainder of the State. While 65% of the total number of employed live in the Sydney Major Statistical Region (MSR), almost 75% of professionals live in this greater area. Moreover, the greatest concentrations of professionals live in areas closest to the Sydney CBD, with Professionals making up 40% of workers in the Inner Sydney and Lower Northern Sydney Statistical Regions.

The regions outside Sydney account for 35% of total employment in NSW. While Professionals are under-represented in these regions, with only 25% of the number of Professionals in NSW, other occupational groups are over-represented. Labourers employed in these regions make up 43% of State employment of Labourers. Similarly 42% of Community and Personal Services Workers employed in the State reside outside Sydney.

There are major structural differences between areas with diverse unemployment rates. Regions with high/low unemployment rates tend to have lower/higher proportions of employment in skilled occupations and higher/lower proportions of lower skill workers than the State average. For example, Professionals comprise 22% of State employment while Labourers make up 11%. In the high unemployment Statistical Regions of Fairfield-Liverpool and Richmond-Tweed and Mid North Coast professionals represent only 14% and 15% of total employment respectively. In contrast, Professions make up 40% of total employment in Lower Northern Sydney and 38% in the Eastern Suburbs where the unemployment rate is significantly lower than the State average. Similarly, Labourers make up 16% of total employment in Fairfield-Liverpool and 13% in Richmond-Tweed and Mid North Coast, but only 5% in the Eastern Suburbs and 3.5% in Lower Northern Sydney.

Professor Bill Mitchell, University of Newcastle and Mr Michael Flanagan, University of Newcastle