Comitatus: Mapping unemployment by electorate

A funny thing happened on the way to the recession we didn’t really have — the economy flicked the bird to the prognostications and assumptions of commentators and analysts alike, whom appeared to be living in a world at least 15 years out of date.

From the moment Lehman Brothers first disappeared up its own capital fundament, the mainstream commentary and analysis of the Australian economy — the RBA and Treasury being the exception — leapt way ahead of the data. Not for them was the idea that maybe we should all take a deep breath and actually wait and see how the consequences of 25 years of economic reform might play out on the ground. Not for them was the idea that perhaps the stimulus packages — both domestic and foreign — would actually have short term consequences along with the longer term costs.

No Siree. Evidence became a bourgeoisie excess.

Each successive piece of data that demonstrated the resilience of the economy — from retail sales to employment, from housing to ultimate GDP numbers — was subsequently dismissed by these Cassandras and news cycle sausage makers, dismissed as some fanciful aberration. Some of the excuses were just ludicrous — the one about small sample sizes in the Labour Force Survey being a particular source of mirth for anyone that understands the maths involved.

But maybe, just maybe, they had an excuse or sorts — and one which goes to the very heart of describing what sort of economic downturn this is. In their world and that of their peers and neighbours in wealthier suburbs around Australia, there has indeed been a large impact from the GFC — but as we’ll see, the distribution of the impact has been almost the mirror image of what usually occurs in a downturn.

Over the coming week, we’ll explore some of the issues involved and the political implications of how the downturn is playing out on the ground — but to wet your whistle, we’ll take a quick look at the two Australian cities that are at the centre of the financial and high end corporate services industries — industries that have been hit hardest by the GFC — Sydney and Melbourne.

If we use the highest resolution ABS unemployment data available, which allows us to look at the unemployment rate by region, and measure the change in the unemployment rate that has occurred at the regional level between the 2007 election and June of this year, something rather interesting comes out.

The cross-hatched shading represents areas where the unemployment rate according to the ABS has actually reduced over this period, the horizontal lines represent the areas where the unemployment rate has increased by up to 3%, and the vertical lines represent areas where the unemployment rate has increased by 3% or more over the period.

To add a bit of political spice, we’ll also throw in the 2007 Federal electoral boundaries and colour code the seats as red for Labor and blue for non-Labor. Sydney is first, followed by Melbourne.

As we can see, this is a downturn where the effects start at the CBD and wash outwards, in decreasing strength, towards the suburbs — but where some outer suburban areas have actually experienced a reduction in unemployment since the 2007 election.

Perhaps there is a reasonable excuse for the poor commentary and analysis about the economy that we’ve seen over the last 18 months or so. For most of those involved in writing the 400 odd miles of dodgy column inches, the GFC was gloomy in their backyard. Their friends and neighbors were feeling full force of the GFC. Their crime, perhaps, was not so much one of incompetence but simply of being out of touch with what was and is happening in the majority of Australia.

Something The Australian should probably give a moment’s thought to the next time it wants to start banging on about out of touch elites.

You can see larger and more detailed versions of these maps on my blog, as well as maps of other regions around Australia.