Employment Leakage by Local Government Area in the Northern Territory, Australia: The Roles of Industries, Including Mining

Abstract

Leakage of employment income is a pressing issue in the economic development of regional and remote communities. Using Australian Bureau of Statistics 2011 census employment data by place of usual residence and place of work, we identify for all 17 Local Government Areas (LGAs) of the Northern Territory (NT), workers commuting out of and into each LGA. Using summary graphs, geospatial visualizations, and principle component analysis we find that while there is substantial leakage out of most LGAs there are also gains from those leaving an LGA to work and then returning home with their income. Overall, for most LGAs and all remote LGAs there is net leakage. In contrast, Wagait, Palmerston, Litchfield and Alice Springs experience net gains from work commuting. Core-Periphery theory (Krugman 1991, Carson 2011) helps explain these net gaining LGAs but cannot be used to consistently explain net leakage or net gain for population centers and nearby periphery LGAs. However, remote LGAs that experience net leakage are typically associated with an employment concentration in mining by sourcing workers from outside local LGAs. Employment concentration in manufacturing exists for leakage oriented LGAs regardless of their remoteness and can therefore not explain leakage in remote areas per se. Our geospatial visualizations also help to identify the leakage vulnerability of regions but this vulnerability from labor mobility also offers increased flexibility to deal with job losses during downturns. Undertaking our analysis for a number of census years could help decision makers build scenarios for future economic development and employment.