CBD is the jobless capital

By Sunny Liu

The CBD is a “port of entry” for international students who are new to Australia, contributing to high unemployment rates, a demographic expert says.

Census employment data released in October shows from 2011 to 2016, the percentage of full-time workers living in the CBD has dropped from 61.4 to 49.2 per cent, much lower than Victoria’s current average of 57 per cent.

Meanwhile, 15.1 per cent of CBD residents reported they were unemployed in 2016, up from 11 per cent in 2011 and more than twice of the state’s unemployment rate.

The fact that one in three CBD residents are students currently attending a tertiary institution is likely the explanation.

Simon Kuestenmacher, director of research at the Demographics Group, said most residents in the CBD were students or recent migrants who had not yet found a job, hence the high unemployment rate.

He called the CBD “the most extraordinary and special residential area in Australia”.

“It serves an entirely different function than the majority of neighbourhoods in Australia. It’s a stepping stone for students who might move after they finish their degree or move for work,” Mr Kuestenmacher said.

When international students first come to Australia, they typically would choose to live in the CBD to be close to their universities.

“A large share of the housing stock in the CBD is specifically targeted at international students who only need accommodation for a few years,” he said.

Professionals, who work in the CBD and have less knowledge about the housing market, might find accommodation in the CBD before moving onto surrounding suburbs with cheaper rents and larger spaces.

“The majority of student accommodation and high-rise apartments in the CBD are shoebox-sized, which the students don’t mind but professionals and young families might want more space,” Mr Kuestenmacher said.

The Australian Bureau of Statistics’ data shows that hospitality is the top employer in the CBD.

Some 2387, or 15 per cent, of working CBD residents reported they were employed at cafes or restaurants in 2016.

Across the City of Melbourne, 7500 more people were employed in the food services sector between 2011 and 2016.

Mr Kuestenmacher said hospitality was where international students would most likely find casual or part-time work.

“When so many students live here, the obvious employment opportunity is hospitality,” he said.

“If we look at the workforce in the CBD, it’s a typical student profile. The students live and work casually here because it’s convenient.”

The general census data released in June shows CBD residents’ personal median weekly income was $431 and household median weekly income was $955, both lower than the state median of $644 and $1419 respectively.

“The Melbourne CBD’s demographic was more affluent 10 years ago,” said Terry Rawnsley, partner at economics and planning firm SGS.

“Over the years we have seen more young people living in the CBD. The student accommodation and small one-bedroom apartments have attracted students and workers with lower income,” Mr Rawnsley said.

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