The Employment Growth of the Different Regions in Australia - Case Study Example

Australia, Queensland Barcoo shift-share analysis Name: Course: Tutor: Institution: City and state: Date: Introduction Australia is among the largest continents in the world. Over the years, the uneven development in Australia has brought about inequality in Australian states. This inequality has brought the rise of the elites and opinion shapers resulting to a cohesive society. Inequality is measured by considering personal and house hold income, easy access to basic commodities (food, shelter and clothing) The analysis has been done at regional levels to compare the different rates of inequalities. Research done in 1976 to 1991 showed that a there was an increasing differentiation in the regions. It clearly showed the gap between the poor and the rich and between the rural and urban areas. (Walmsley and Weinand, 1997) Australian government has different responsibilities, provision of key public amenities and infrastructure belong to the states. Funding and financing of the states belong to the federal government. However, local governments are answerable to the state governments. This kind of government structure has largely contributed to the inequalities. Regional development in Australia has been affected by the growing liberalism and the governmental structure. In the 20th century, population and business were directed from the urban metropolitan areas to the rural areas. This attempt by the federal government was to try and balance development across Australia. A project of ‘new cities’ was set up where business and public sector services were relocated. This plan was to lure the private and investing firms to these cities, however, the plans failed due to Australian decentralization government strategies. It resulted to massive wastage of resources and public funds. Australia got different regions which face different problems as they try to develop. Some face more problems due to locality, lack of human capital or nature of natural resources. For them to economically raise the government has to device new ways to boost these areas. (O’Connor, K., at el 2001) During the evolution of politics, there was great desire by populations to separate their territories and gain control over their affairs. Due to geographical remoteness, there arose new state movements in North Queensland. There was a perception that wealth belonging to the local people was being drawn and taken away to the state capital. By introducing the state governments, wealth could be consolidated and used to develop the state affairs and economy. Objectives The main objective of this study is to know and compare employment growth of the different regions in Australia. Investigation of these states is by using the census data which is readily available of the concerned states and regions. Analysis of these states has been done through the shift share analysis method which critically investigates a region. Area of study The study has been done in a region state called Queensland located in Australia. Queensland has among the highest high school enrollment rates. The research has mainly concentrated on my home area called Barcoo. Its 60,901 square kilometers located in south western Queensland. The largest shire in the state is found here. Its well nestled between Ballon, Winton and Quipped shires. It offers an outback experience that visitors don’t forget. It has great magnificent Sand hills and rock hills through the green valleys. Barcoo has great sceneries to offer to the world. Barcoo is said to have among the best employment rates in country. The best job market is in Barcoo where 100% of the labor force is employed. Area geo plan The economy is a major part that requires considerations by the governments when formulating a plan to help out a region out of its economic crisis. The Australian government has tried to uplift the standards of the people by changing their reliance on manual manufacturing to upgraded automated industries. This has lead to specialization of jobs in various states. It’s clear that each and every state in Australia has a major source of income .For example, Barcoo area mainly relies on manual services such as agriculture. This has made the economy to be focused on innovation and export related growth. The performance of the economies mainly relied on the local population for development and growth. Australia has many different regions each with a different type of system and economic growth rates and accessibility. An area like Barcoo is easily accessible and this has greatly influenced its growth rate. It has lead to a higher percentage of residents getting employed and also self employing themselves. This area is also scenically attractive for it offers great atmosphere and weather conditions. This has lead to high levels of tourism in the area due to its beautiful sceneries and climate. This increased foreign exchange for the region n boosts the economy. Furthermore, it has experienced a high in-migration of the Australian residents and a high population growth. As a result other areas experience a shortage in population and the labour force due to these migrations. The later areas get poor economic growth rates and also a decline in population growth. Due to this rural urban migration the output of the rural areas decline. Basic services become unavailable, the local markets shrink and activity level declines. The young people shift to the urban areas leaving old folks in the rural areas .Chronic labour shortages has been experienced all over the rural areas in most states. The dedicated and trained staff of the rural areas is attracted by the good economies in the cities. In the urban areas, it has become over populated such that crime has taken a toll as people to find a living. This has happened in the last decade and the government had to take some actions towards this. Areas that faced these problems find it difficult to get back on their feet and rebuild a stronger economy as before. Clearly migrations impinge on regional economic levels. Australian population has characteristics that are well known. The settlement patterns are well known that they are of small sizes compared to other well developed countries. It has a high population of its residents concentrated in the large cities leaving vast areas in Australia less occupied by residents. An analysis done in the 2006 census shows that fifty percent of the residents are highly mobile. They change their areas of permanent residence often. This was observed in the years between 2001 -2006. The major reasons for this kind shifting and changing areas of residence is the rural urban migration The migration has brought about a major impediment in the rural areas. It has threatened its development and economic growth. A drain of young people from these areas has threatened the viability of small schools in the regions and country sports competitions. These migrations extend their effects to the working pools of the regions such that the areas are drained of the well skilled and young workers. Most industries in the regions have experienced a greater shortage of workers bring down the level of production. It has brought about a failure and closure of most of the industries. Since the labour market is greatly affected, so will the economy of the region. Skilled workers were being drained from the rural areas in the cities. The government had to intervene and try to save the economy of the country. It was not easy to come up with a good plan that would stop the migrations and stabilize the economy. A policy was developed such that the government would help relocate well doing business back to the rural areas. The business had to fill out some forms that would enable them receive some funding in the rural towns. This formula was highly publicized and strictly policed. The policy brought about development of new cities. The government wanted people to go back to the rural towns and develop the economy. This took population pressure of the capital cities. Even though the project was not that successful regions realized that they had to take the initiatives to develop their own regions for the future generations. People embarked to using the available resources in the regions to develop themselves. This has seen a rise in economic growth in the states such that during the census, comparisons could be done to see and analyze best and worst performing states. Shift-share analysis This is a method used to investigate the rate of employment growth in different regions. This method is straightforward and simple to use. It allows the canalization of regional economies and their work force and be separated from the effects of trends in state industries. Data used is easily accessible for it has been collected for decades during census. This technique is known to be very descriptive of the area of study. Employment of a region is divided into three main sections: a) Contribution This is a regions industry mix that supports employment growth. b) Other contributing factors within the region. c) Structural component It can be summarized as follows Regional Employment growth = National (or State) growth + Growth due to Regional Industry Mix + Growth due to other factors (National Component) (Structural Component) (Differential Component) (Differential Component) It compares performance of a region against the all regions average which is included in the analysis. In the following analysis it has been done for a single region; Barcoo. This is for the years 2006 and 2011. National Component The first we calculate the National (or State) Growth Rate. We have to calculate the Rate of Growth for the state (nation) over the phase being analyzed. The national rate of growth is calculated by: Table 1. National Rate of Growth = (National Total 2011 Employment – National Total 2006 Employment) / National Total 2006 Employment   Census: Persons   Change in employment % Change in employment Queensland 2006 2011           Agriculture, forestry and fishing 63,225 56,704 -6,521 -10.31% Mining 30,839 52,954 22,115 71.71% Manufacturing 181,678 172,711 -8,967 -4.94% Electricity, gas, water and waste services 18,748 25,007 6,259 33.38% Construction 166,476 184,317 17,841 10.72% Wholesale trade 72,647 74,718 2,071 2.85% Retail trade 213,637 218,522 4,885 2.29% Accommodation and food services 128,204 142,232 14,028 10.94% Transport, postal and warehousing 93,072 107,571 14,499 15.58% Information media and telecommunications 26,603 25,594 -1,009 -3.79% Financial and insurance services 52,923 54,648 1,725 3.26% Rental, hiring and real estate services 38,218 37,271 -947 -2.48% Professional, scientific and technical services 103,780 134,332 30,552 29.44% Administrative and support services 56,144 65,504 9,360 16.67% Public administration and safety 122,994 137,643 14,649 11.91% Education and training 139,893 161,555 21,662 15.48% Health care and social assistance 188,562 244,499 55,937 29.67% Arts and recreation services 24,881 28,739 3,858 15.51% Other services 68,888 79,188 10,300 14.95% Inadequately described/Not stated 49,472 48,523 -949 -1.92% Total 1,840,884 2,052,232 211,348 11.48%   Census: Persons   Change in employment % Change in employment Barcoo 2006 2011 Agriculture, forestry and fishing 112 119 7 6.25% Mining 7 11 4 57.14% Manufacturing 9 4 -5 -55.56% Electricity, gas, water and waste services 0 0 0 0.00% Construction 18 20 2 11.11% Wholesale trade 0 3 3 0.00% Retail trade 5 6 1 20.00% Accommodation and food services 7 16 9 128.57% Transport, postal and warehousing 6 17 11 183.33% Information media and telecommunications 0 0 0 0.00% Financial and insurance services 0 0 0 0.00% Rental, hiring and real estate services 0 0 0 0.00% Professional, scientific and technical services 3 3 0 0.00% Administrative and support services 0 0 0 0.00% Public administration and safety 52 54 2 3.85% Education and training 14 17 3 21.43% Health care and social assistance 9 10 1 11.11% Arts and recreation services 0 3 3 0.00% Other services 0 3 3 0.00% Inadequately described/Not stated 3 7 4 133.33% Total 245 293 48 19.59% The rate of employment in Barcoo is 19.59%. From the table, employment rate dropped by 11% between year 2006-2011. At this rate it shows there are no people being employed in the industries. This can either mean there is no job creation or vacancies left for job seekers. It’s also an indicator that their economy could be doing so well such that almost 100% of the labour force in Barcoo is employed. These jobs may not be white colour jobs since most of Barcoo residents relies on agriculture and fishing for a livelihood. Forestry is also a major income earner for the residents of Barcoo. According to the findings few people wok as professionals in this region. The largest percentage is self employed. This makes the percentage of job employment to be negatively low. Rate of growth Secondly we calculate the regions rate of growth Region (LGA) Rate of Growth = (Region Total 2011 Employment – Region Total 2006 Employment) / Region Total 2006 Employment Then the state employment rate is applied to Barcoo helping us get the state component. This helps us to know how the state factors are affecting employment in that particular region. We multiply the regions base year employment with by the state overall growth rate. In our case the base year is 2006. (Lloyd, R., A at el 2001) Barcoo (S) (LGA 30450) 62000.7 sq. Kms Table 2. National (or State) Component   Census: Persons National Rate of growth National/State Growth Share Barcoo 2006         Agriculture, forestry and fishing 112 11.48% 12.86 Mining 7 11.48% 0.80 Manufacturing 9 11.48% 1.03 Electricity, gas, water and waste services 0 11.48% - Construction 18 11.48% 2.07 Wholesale trade 0 11.48% - Retail trade 5 11.48% 0.57 Accommodation and food services 7 11.48% 0.80 Transport, postal and warehousing 6 11.48% 0.69 Information media and telecommunications 0 11.48% - Financial and insurance services 0 11.48% - Rental, hiring and real estate services 0 11.48% - Professional, scientific and technical services 3 11.48% 0.34 Administrative and support services 0 11.48% - Public administration and safety 52 11.48% 5.97 Education and training 14 11.48% 1.61 Health care and social assistance 9 11.48% 1.03 Arts and recreation services 0 11.48% - Other services 0 11.48% - Inadequately described/Not stated 3 11.48% 0.34 Total 245   28.13 The region of Barcoo has a negative structural component. This means the region has a poor or unfavorable industry mix. This region is not dominated by fast growing industries unlike regions like Amidale, whose analysis show a positive growth in its industries. Instead of industries the people rely on service related economy like farming, fishing and forestry. In this case no jobs will be created across most of the industries. Structural Component The next, we calculate the Structural Component (also referred to as the Regional Industry Mix). This component determines the extent to which the region has contributed to industrieas above or below it. An estimate of jobs not created or created on each industry. Calculated as: Base Year Regional Employment for each Industry x (National Rate of Growth for each Industry – National Rate of Growth) (Lloyd, R., A at el 2001)   Census: Persons State or National industry rate of growth National rate of growth %Employment Difference Employment Difference: No's   Barcoo 2006 Expected Regional Employment               Agriculture, forestry and fishing 112 -10.31% 11.48% -21.79% - 24.41 88 Mining 7 71.71% 11.48% 60.23% 4.22 11 Manufacturing 9 -4.94% 11.48% -16.42% - 1.48 8 Electricity, gas, water and waste services 0 33.38% 11.48% 21.90% - 0 Construction 18 10.72% 11.48% -0.76% - 0.14 18 Wholesale trade 0 2.85% 11.48% -8.63% - 0 Retail trade 5 2.29% 11.48% -9.19% - 0.46 5 Accommodation and food services 7 10.94% 11.48% -0.54% - 0.04 7 Transport, postal and warehousing 6 15.58% 11.48% 4.10% 0.25 6 Information media and telecommunications 0 -3.79% 11.48% -15.27% - 0 Financial and insurance services 0 3.26% 11.48% -8.22% - 0 Rental, hiring and real estate services 0 -2.48% 11.48% -13.96% - 0 Professional, scientific and technical services 3 29.44% 11.48% 17.96% 0.54 4 Administrative and support services 0 16.67% 11.48% 5.19% - 0 Public administration and safety 52 11.91% 11.48% 0.43% 0.22 52 Education and training 14 15.48% 11.48% 4.00% 0.56 15 Health care and social assistance 9 29.67% 11.48% 18.18% 1.64 11 Arts and recreation services 0 15.51% 11.48% 4.03% - 0 Other services 0 14.95% 11.48% 3.47% - 0 Inadequately described/Not stated 3 -1.92% 11.48% -13.40% - 0.40 3 Total 245 11.48%   -7.96% - 19.50 225 Table 3. Structural Componengt Differential component The last step in the shift share analysis method is to calculate differential component. It measures what proportion of the change not encountered for by the state component or the industry mix effect. It shows what local component may have had on the regions employment rate of growth Region Industry Employment x (Region Industry Rate of Growth - National Industry Rate of Growth) Table 4. Differential Component (Regional Share)   Census: Persons LGA Rate of growth 2006-2011 National rate of growth % Share Share: No's Barcoo 2006             Agriculture, forestry and fishing 112 6.25% -10.31% -4.06% - 4.55 Mining 7 57.14% 71.71% 128.85% 9.02 Manufacturing 9 -55.56% -4.94% -60.49% - 5.44 Electricity, gas, water and waste services 0 0.00% 33.38% 33.38% - Construction 18 11.11% 10.72% 21.83% 3.93 Wholesale trade 0 0.00% 2.85% 2.85% - Retail trade 5 20.00% 2.29% 22.29% 1.11 Accommodation and food services 7 128.57% 10.94% 139.51% 9.77 Transport, postal and warehousing 6 183.33% 15.58% 198.91% 11.93 Information media and telecommunications 0 0.00% -3.79% -3.79% - Financial and insurance services 0 0.00% 3.26% 3.26% 0 Rental, hiring and real estate services 0 0.00% -2.48% -2.48% - Professional, scientific and technical services 3 0.00% 29.44% 29.44% 0.88 Administrative and support services 0 0.00% 16.67% 16.67% - Public administration and safety 52 3.85% 11.91% 15.76% 8.19 Education and training 14 21.43% 15.48% 36.91% 5.17 Health care and social assistance 9 11.11% 29.67% 40.78% 3.67 Arts and recreation services 0 0.00% 15.51% 15.51% - Other services 0 0.00% 14.95% 14.95% - Inadequately described/Not stated 3 133.33% -1.92% 131.42% 3.94 Total 245 19.59% 11.48% 19.44% 47.62 Regional Employment Growth National State Component Structural Component Differential Component 19.59% 11.48% -7.96% 19.44% 48 28 -20 48 We can conclude from the results that the development and the rate of employment growth are very poor. Despite Barcoo being stated as the best performer in employment, its employment growth is below the expected standards. In Australia Barcoo is among the states where most of its residents are self employed. For the last six years, there has been a decline in the rate of growth. Analytical review sited that during that period, job opportunities were created where a large number was helped by the local government to start their own business and self employ them. The greater percentage of Barcoo people is made of young people aged between 25-54 years. The number of people employed in this region working full time is 48%. The rest are employed in part time jobs with only 8% not employed. Most inhabitants are laborers who work in agriculture and fishing grounds Reference Lloyd, R., A. Harding and O. Hellwig 2001, Regional Divide? A study of income inequality in Australia, Sustaining Regions, Vol. 1, No. 1, pp. 17-30. O’Connor, K., R. Stimson and M. Daly 2001, Australia’s Changing Economic Geography: A Society Dividing, Oxford University Press, Melbourne. Much of this book is of relevance to this unit. Walmsley, D. and H. Weinand 1997, Is Australia Becoming More Unequal?, Australian Geographer, Vol. 28, No. 1, pp. 69-88. Read More