Our most productive urban workers are in CBDs. Photo: Wolter Peeters
Where are Australia's most productive workers?
If you measure toil in dollars alone, the answer is remote north-western Australia. A small band of super-productive workers in those parts that operate gigantic mining machinery generate about $2500 for every hour they extract minerals. That's 32 times more than the average Australian worker.
But what about in cities, where the vast majority of us are employed?
It probably won't surprise you that our most productive urban workers are in CBDs.
Analysis by Terry Rawnsley, from the consultancy firm SGS Economics and Planning, shows the "gross value added" per hour in the central business districts of Sydney and Melbourne was about $100 in 2012-13, more than double the output of a typical worker on the urban fringes.
One reason for this disparity is the type of labour done in CBDs, especially financial services. The value added per hour by those who move money and manage capital is about $200, or two-and-a-half times more than the national average.
Another factor boosting the productivity of CBD workers are the extensive connections they have with the rest of the national economy and their deep integration with the global economy.
"Their potential client base covers billions of people which presents huge opportunities for economies of scale and hence high labour productivity," Mr Rawnsley said.
The Grattan Institute estimates the central business districts of Sydney and Melbourne – which together cover just 7.1 square kilometres – generate nearly 10 per cent of Australia's gross domestic product and triple the contribution of the entire agriculture sector.
Canberra's labour productivity – $90 per hour worked – was not far behind the CBDs of Sydney and Melbourne. That's driven by the national capital's highly educated workforce although Mr Rawnsley warns the figure is "a bit rubbery" because measuring the productivity of public servants is tricky.
Suburbs adjacent to airports, which service the movement of people and goods across the world, have relatively high rates of labour productivity because of their national and global connectivity.
Sydney airport has the city's eighth highest labour productivity per hour ($74) followed by the Mascot-Eastlakes area which is adjacent to the airport ($71).
This shows why the proposed airport at Badgerys Creek will be a boon to the economy of south-western Sydney, if it is well planned. Labour productivity per hour in the Badgerys Creek area is now one of the lowest in the city at just $38.
But once the airport is built that figure is bound to skyrocket because the region will become far more integrated with the national and global economies.
"The place will go gangbusters," Mr Rawnsley said.
Urban areas with relatively high rates of labour productivity often don't match pockets of high income and wealth. The productivity per hour of workers in the western Sydney industrial suburb of Chullora ($68) was higher than in the super-rich, harbour-side neighbourhoods of Mosman and Woollahra (both $61).
Beyond CBDs, inner-city areas, airports and a few secondary hubs labour productivity levels do not vary greatly across most suburbs. Production in those neighbourhoods normally only supports the local population so the powerful economic dynamics driving up productivity rates in CBDs are missing.