Insights

COVID-19: Divide between the ‘haves and have-nots’ may escalate when major fiscal support programs end

Posted March 29, 2021

SGS Economics and Planning James Atkinson

The end of COVID-19 major fiscal support programs may widen the divide between workers in the richest and poorest suburbs in Melbourne, Sydney and Adelaide shows new data.

A new analysis of employment outcomes for different local government areas across Melbourne, Sydney and Adelaide by SGS Senior Consultant James Atkinson shows the worker populations of lower socio-economic status regions were hit harder during the pandemic than those in more affluent neighbourhoods.

With federal government support winding down, how do we plan to support the vulnerable communities that made disproportionate sacrifices to keep the virus out of Australia? Without continued support of some kind, the divide between the ‘haves and have-nots’ in Sydney, Melbourne and Adelaide will escalate.

— James Atkinson

The analysis looks at the regional labour force impacts of pandemic responses drawing on SEIFA-IEO and Small Area Labour Market Data. It focuses on metro Melbourne, Sydney and Adelaide and explores what happened to the number of employed people by region between March 2020 and September 2020.

Workers who lost jobs during the pandemic were largely those in customer service or tourism-related jobs, or workers without the ability to work from home. In addition, we saw that low-skilled workers were also disproportionately impacted by job losses. In contrast, the impact on workforces in the most advantaged parts of these cities has been much smaller.

Across our metropolitan regions, there was a consistent relationship between socioeconomic disadvantage and poor employment outcomes over 2020; reflecting an inequality of employment outcomes that may be exacerbated by the end of major fiscal support programs.

The data throws doubt on the idea that we were ever truly ‘in this together’. It suggests that our disadvantaged communities bore the brunt of the effects of the pandemic and the pandemic response.

— James Atkinson

Melbourne

In Greater Melbourne’s lower socio-economic areas of Wyndham, Dandenong and Casey, the decline in employed residents totalled 6790, 2080 and 5389 respectively between March and September 2020. In the wealthier Yarra and Melbourne metropolitan areas, however, the number of employed residents increased by 786 and 1402 respectively.

LGAWyndhamDandenongCaseyYarraMelbourne
Average SEIFA-IEO5.12.74.39.49.5
Change in employment-6,790-2,080-5,389+786+1,402
Change in employment (%)-4.81%-2.52%-2.91%1.15%+1.13%

Sydney

In Greater Sydney’s Fairfield and Campbelltown local government areas, the number of employed residents declined by 3142 and 2125 jobs respectively between March and September 2020. Both rank comparatively low on socio-economic indicators. In contrast, among Northern Beaches residents, there was a net increase of 2010 jobs over the same period.

LGAFairfieldCampbelltownSydneyNorthern Beaches
Average SEIFA-IEO1.93.010.09.0
Change in employment-3,142-2,125+4,221+2,010
Change in employment (%)-3.50%-2.42%+2.54%+1.35%

Adelaide

In Greater Adelaide, relatively disadvantaged areas like southern Onkaparinga and Salisbury lost 1796 and 1516 jobs respectively. Remarkably, the number of employed residents in Adelaide’s wealthiest communities grew faster in the year to September 2020 than it did in the previous year.

LGASouthern OnkaparingaPlayfordSalisburyAdelaideBurnsideProspect
Average SEIFA-IEO3.32.12.310.010.08.5
Change in employment-1,796-959-1,516-89-263-105
Change in employment (%)-2.80%-1.91%-2.37%-0.68%-1.10%-0.85%
SGS Economics and Planning Adelaide employment figures diagram3
SOURCE: SEIFA-IEO, LMIP Small Area Labour Data

Since September 2020, the national economic situation has improved and unemployment has declined as communities and economies return slowly to normal.

As restrictions ease, economies have sprung back to life and a large number of new jobs have been created, though we won’t know which regions have benefitted from this growth until December 2020 data is released. What we do know is that employment growth since September 2020 has largely been an ‘eastern states’ story with most newly created jobs going to residents of Victoria, New South Wales or Queensland, and relatively few to South Australians.

— James Atkinson
SGS Economics Planning James Atkinson
For further information contact:

James Atkinson

Senior Consultant

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