Goats on our roads

Goats on our roads

by | 21 Oct, 2018 | Australia, demography, immigration, medium read, politics, public transport

 

Seems the latest food fashion in Australian politics is Goat a la scāpé. And it’s being served at both parties.

Politicians are spruiking lowering migration, or at the very least defuse it from the big cities, as it seems foreigners are clogging up our roads. (At least they stopped stealing our sheep!)

The claim seems to follow a simple rationale:
1. Cities (e.g. Melbourne and Sydney) are getting bigger
2. The increase is mostly driven by overseas migration
3. This is putting more people on the roads
4. Hence increased traffic congestion (and insinuations of other social ills)

In short, migrants = traffic congestion. A simple, winning argument.
Except, I’m not convinced it’s true.

Points 1 and 2 are fine. Overseas migration is the largest component of population growth in Australia, particularly our largest cities. Point 3, on the other hand, seems flawed in two ways:

a. The driver: increased congestion could be caused by centralisation of workforce, and
b. Diversity: not all people are equal (in how they travel to work).

While they may appear minor oversights at first, these flaws are so fundamental that migrants may not only be a non-issue, but in fact part of the solution.

 

Are we jumping to conclusions?

But before we begin, is it worth questioning the conclusion in the first place? How much worse is congestion getting in our big cities? According to the Grattan Institute “the length and time of commutes barely changed in Australia’s biggest cities during the exceptionally rapid population growth between 2011 and 2016. In Sydney, Melbourne, Brisbane and Perth, commute distances in 2016 were almost indistinguishable from 2011″¹.

 

Let’s focus on Melbourne city to examine this further.

The number of people who work in Melbourne city grew 21% in the period 2011 to 2016, from 347k to 422k². That’s way faster than Melbourne’s overall population increase of 13% in the same period. The increase in CBD jobs may also be driven by the changing make up by industry, i.e. the increase in professional, hospitality, and finance jobs which tend to be more centralised. So, it’s likely there would be more people working in the CBD even without the new migrants.

Yet, even though the number of city workers has increased by 75,000, there’s only 4,000 more people driving into town in 2016 than there were in 2011. That’s because the way in which people travel to work has changed. A smaller percentage drive, and a greater percentage catch public transport, walk/ride or work from home.

 

This change seems to be led by recent migrants. City workers who are long term Melbourne residents (i.e. have lived within the Melbourne Metropolitan area for at least 5 years) are 2.5 times more likely to drive to work than recent migrants. While recent migrants are almost 2.5 times more likely to walk or ride to work. Workers who moved to Melbourne from elsewhere in Australia (including country Victoria or interstate), fall somewhere in between.

 

 

If the percentage of people driving into town had not changed since 2011, Melbourne would have had an extra 14,000 cars on the road in 2016, not the 4,000 increase which occurred.

This of course is also overly simplifying. Congestion would also have changed the choices of the long-term Melbourne residents if they needed to take on city jobs. But I doubt it would have changed them enough as to resemble the choices of recent migrants. This would include large social changes, an increased acceptance of inner-city apartment living, and waving goodbye to the American Australian home-owning dream.

Similarly, Melbourne could move away from its current thriving tech, financial, educational and hospitality industries which centralise the workforce in town. Specially as without the recent migrants Melbourne would struggle to fill those jobs, as the skills may not be available locally.

But in the current world, the fact that such a large percentage of city workers are recent migrants seems to be the main reasons our roads are not at a stand-still.

 

 

 

Sources:

  1. Terrill, Marion, Batrouney, Hugh, Ha, James, and Hourani,Diana (2018). Remarkably adaptive: Australian cities in a time of growth. Grattan Institute.
  2. All travel to work data sourced form the Australian Bureau of Statistics, Census 2011 and 2016.

Two sides of a growth

Two sides of a growth

by | 4 Jul, 2018 | Australia, economics, income, Inflation, medium read, social issues

With all the talk of wage stagnation, you’d be forgiven for thinking Australia lives in struggle town. Yet, incomes have increased so rapidly that today’s full-time median wage would put you in the top quartile 20 years ago!

Real growth

While growth slowed down over the past couple of years, Australians’ income is coming off two decades of boom. The average full-time wage (inflation adjusted) has increased by 41% over the period. This means that even with the increased cost of living, the average Australian worker can now buy almost half as much more stuff than in the late 90s.

But averages only paint a slither of the picture. More impressive is how the increase has permeated across all income levels (albeit to different degrees).

When spreading fulltime workers across an earning continuum, the past two decades have basically moved everyone up at least 20 percentile points.

Today’s median income (the 50th percentile) would put you above the 75th income percentile in 1996. And you only need to be around the 65th percentile to have an income equivalent to that of the top 10th percentile in 1996. Potentially most importantly, today’s poorest 10th percentile earns more than the 30th percentile did in 1996.

Does this mean Australia has eradicated the bottom 20 percentile of workers?

It depends on how you look at it.

A graph may paint a thousand words, but which words depend on your point of view.

Seen through a prism of ‘absolute’ progress, the graphs above suggest Australia has improved drastically. People are richer, and those on the lowest wages are much better off than they used to be.
Those primed for this view of the world will no doubt take that message from this story and have a reinforced idea that the world is getting better; we’re on the right path.

Relative growh

However, seen through a ‘relative’ prism of equality, the graphs highlight the growing gaps between the “haves and the have nots” (even if the have nots have much more than the have nots used to).
The boom was not felt equally.

While the median income increased by 35%, the income of the top decile increased by almost 50%. Meanwhile the 10th percentile increased by 25%. In 1996, the 90/10 percentile ratio was 255%. 20 years later the gap widened to 305%. While the real difference is narrowed by the taxes upon this incomes, it’s fair to say that income inequality has increased.

Real vs Relative

Most people are much better off than before. Yet, many still feel worst in comparison to those around them. The progress and improvements in our lives pale in comparison to comparisons themselves. This may be explained by behavioural economics better than the traditional variety. Perhaps comparing ourselves to those around us might be easier and more front of mind than accurately remembering the past. Perhaps it’s our bias towards feeling losses harder than gains. Whatever the case, I don’t think enough attention is being paid to all the things we have, and too much is being focused on what we’re missing out on. Should we not find a way to enjoy the situation we are in, and not let “comparisons be the thief of joy”1.

We have never lived in an age of such generalised affluence.Our standards and expectations are beyond what any previous generation dreamed of. The growing income, and more importantly wealth inequality are hugely important issues. But we should acknowledge the other side of the graph. Partisans often ignore one point of view fearing it will diminish their own. But ignoring the progress, or overly focusing on the negatives, misleads people to thinking we’re worst off than we are. We start feeling self-pity and fail to acknowledge our place in the world. We should continue to work towards a fairer world, but not at the cost our capacity to enjoy what we have.

Australia is not only at its richest point in time, it’s also among the richest in the place (world).  Perhaps by acknowledging how far we’ve come, we can start paying more attention to helping those beyond our coast lines.

We should fight to make this a better world, but we should not ignore the fact that our world, our time and place, is heaps good.

 

Sources:

All income data from :

ABS’s Employee Earnings and Hours, Australia

2016: http://abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6306.0May%202016?OpenDocument

1996: http://www.ausstats.abs.gov.au/ausstats/free.nsf/0/CE23DC841D70810FCA25722500073754/$File/63060_0596.pdf

1: Disputed quote from Theodore Roosevelt – https://en.wikiquote.org/wiki/Theodore_RooseveltQuote from