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Where are Australia's most productive workers?


Matt Wade

Our most productive urban workers are in CBDs.

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.


  • When the GFC hit the mining industry was able to shed 30% of it's workforce and still keep operating. This is sure sign that it is overmanned. The problem is that when you are making bucket loads of money efficient use of manpower is a very low priority. Many years ago I worked in the steel industry when they could sell every tonne they produced regardless of price. The workforce at that location was 6,500. It is now less than 3,000 producing more steel at a better quality than ever before. The company had absolutely no interest in anything that may reduce costs. They were only interested in increasing production. I suspect that the mining industry were exactly the same. Sometimes these measure like productivity and GDP need to be taken with a pinch of salt. After all the easiest way to increase GDP is to put a brick through a window.

    Tony McIntyre
    Lower Mitcham SA
    Date and time
    August 31, 2014, 8:36AM
    • Interesting article.

      I personally don't think measuring toil in dollars alone measures 'true' productivity.

      Because some of the dollar productivity can be simply gambling with money(moving it from one area to another is stockmarkets etc).

      Many people who prouce quality physical goods do not get paid much(think fruit farmers, dairy farmers, etc), because of our monoply sytem of retail(especailly food) in auss i feel, where a few have managed to become dominate, so they can manipulate what they pay some to produce goods they sell in their monoply retail stores.....

      And then theres the service industry where cleaners and nurses and others do much to provide services to keep areas clean and people comfortable and cared for, who exist in all areas of auss, but their dollar productivity looks low because of their pay.

      And then there is those that 'volunteer' that feed the elderly through 'meals on wheels', fire fighters, ambulance(mostly in the country),first aid workers, army reservists, SES workers, and those that work for charitable services for nothing......all these people produce much more for communities in the terms of stability, than those who sit in offices and shift money around(stock market) i feel,...but if a dollar figure is put on the volunteer work, it is considered non-productive because they don't get paid.

      But the real damage for auss i feel is a current govs attitude of 'she'll be right' with many companies heading overseas for cheap labour, and our reliance on imports and selling off our real-estate to overseasers because of this.

      it'll only take a minor up-heavel in the world I feel whether it be war, or natural disasters, and auss may be left stranded on a large island with all our technology skills gone, and land sold off, with lack of imports, causing devastation.....

      Cranach Crandall
      Date and time
      August 31, 2014, 10:27AM
      • Labour productivity is really only an important measure economists should look at in a 'full employment' environment.

        As the example of the mining area suggests, rather that 1000 men on shovels the situation now is one man on one machine doing the work of 1000. More profit to the owners of capital (read Gina), and less purchasing power in the community in the form of wages.

        As society mechanises and transforms a greater number of jobs using technology, as fewer more productive workers displace greater numbers of less productive workers, who will support small business? Or will the only profitable businesses town be Banking (mortgages) and food/petrol.

        You see productivity is a good measure if you are interested in how much profit capital can extract from a given society. But if that comes at a cost of increasing unemployment/underemployment, then is it really a reasonable goal to pursue?

        and for those that disagree, go to the ABS and look at the series that looks at total factor income, and look at this against labour productivity. What you will see is over the neo-liberal period the percentage of total factor income taken by capital has increased, at about the same rate as labour productivity, meaning the gains made in labour productivity have almost all gone to the owners of capital. The workers got replaced by machines and their loss of income was never regained. So while employment levels may remain the same, this simply means more less well paid jobs. What I have just written is the biggest story of the last 30 years, though it seems no one is covering it. I wonder why?

        Ben Shah
        Date and time
        August 31, 2014, 3:37PM
        Comments are now closed
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