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Ihave just come across a data source that I can’t resist. The
US Department of Labor produces an annual estimate of
the American workforce by occupation. We do the same
through the Australian Bureau of Statistics (ABS) but there
are differences. I ’ll get to what this means for property in just
The ABS provides estimates of job growth every quarter for
51 occupational categories. In the US, on the other hand, the
sheer scale of the workforce – 133 million as opposed to our 11
million – means that job growth can be surveyed at a far more
Indeed the Americans track changes in the labour market
for 821 occupations that make up their employment market.
The most common jobs in America today are in retail sales
(4.5 million), jobs as cashiers (3.3 million) and jobs in fast food
(three million). But the fastest growing jobs over the most
recent year for which data is available, the year ending May
2013, was personal care aides, which was up 150,000 or 15 per
cent, followed by retail sales workers up 145,000 or three per
cent, and labourers up 140,000 or seven per cent.
These are hardly glamorous jobs and yet they’re booming in
the States. Jobs that contracted most in the US over this year
included secretaries, down 48,000 or six per cent, home health
aides, down 33,000 or four per cent, and childcare workers,
down 27,000 or four per cent.
Jobs that are disappearing are all too often associated with
the impact of new technology. For this particular year, the
US lost 10 per cent of the telecommunications line installer
workforce, nine per cent of the postal worker workforce, and six
per cent of telemarketers.
Secretaries are losing jobs because management has learned
how to type. Telephone line installers are no longer required
as technology transitions to wireless. I’m not sure what that
means for the NBN. And telemarketers are a dying breed
because such work is being outsourced to low cost countries.
America is in the grip of a workforce revolution. Many of the
tedious and repetitive jobs are no longer required.
If such trends were also evident in Australia, but remain
unidentified because data capture and reporting techniques
apply at too high a level, then it may be concluded that
property values on the low cost edge of town won’t increase
markedly in the future.
There’s simply not the demand for low-skilled labour in the
US or in Australia today that there was a year ago, let alone five
This raises the question of where job growth and therefore
of where property value growth is likely to be greatest in
Again we can look to the US Department of Labor. Jobs that
experienced the highest percentage growth in demand over
the year included chefs, up 11 per cent, followed by software
developers, web developers, market research analysts and
medical scientists, which were all up 10 per cent. It’s either
personal service workers (mostly African-American and Latino
in the US) or its (mostly white, Asian or Indian) knowledge
workers that are on the up and up in America.
If the same trend was true for Australia, and I have no reason
to assume otherwise, then laid-off manufacturing workers
might be able to get some work in retail or as, say, aged
care workers. Otherwise the real growth in the workforce in
Australia is likely to be around the inner city knowledge worker
workforce. Perhaps with a technology bent.
This might benefit the technology precincts around Ryde
in Sydney, Clayton in Melbourne and perhaps even Salisbury
in Adelaide. In either case, the outlook is for structural
change in the Australian workforce and possibly also in the
Industrial sites in inner and middle-distance suburbs
could well be redeveloped as housing estates in places
like Melbourne’s Brunswick, Sydney’s Marrickville and
Investment in apartment product in redevelopment sites is
a tricky business. It’s all well and good if there’s scarcity of
supply. But who’s to say that another redevelopment site might
not deliver units into the market in the neighbourhood in the
Eventually redevelopment sites in industrial suburbs will be
exhausted and it’s then that value growth might be achieved.
There are of course key differences between the American
and the Australian labour markets. This includes factors like
Australia’s higher minimum wage holding up middle and outer
suburban property values.
And the virtual absence in Australia of an illegal migrant
labour market creating blighted areas in capital cities.
In matters relating to the workforce it’s the Americans
showing the Australians the way forward. And the way forward
involves a blunt and even a brutal shift in the labour market.
Property investment for the medium to longer-term should
therefore focus on Australia’s knowledge worker heartland: the
inner city, the hospital and university precincts, the technology
precincts, and perhaps even airport and port precincts.
Housing could well become awfully cheap in Australia’s
industrial heartland but there’s a reason: for a decade or more
industrial workers might well be transitioning to welfare. API
Founder and head of KPMG Demographics; firstname.lastname@example.org
DASH OF SALT // BERNARD SALT
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