Are you basing economic development decisions on false news?

More than two years after the ABS made a significant change to the way they collect and calculate employment data, we’re still hearing confusion about this dataset from the sector. In the case of one council, this could have meant over-reporting local employment growth by 8,708 jobs. In this blog, our economists give a simple summary of what’s changed, and what it means for economic development professionals (or anyone concerned with generating local jobs, attracting investment or applying for funding).

What you need to know

You can no longer compare raw 2011 and 2016 job counts to analyse employment change (place of work) in your Local Government Area.

This was identified in an earlier blog by our economic expert Keenan Jackson.

What does this mean?

Up to the 2011 Census, if you didn’t state place of work, or if your place of work was unclear, then you were put into the “Not Stated” or undefined basket. This basket made up around 8-10% of the total employed residents. This meant that the 2011 Census significantly undercounted employment in your LGA (see more on this here).

In 2016, the ABS allocated the ‘Not stated’ basket to a work location using a sophisticated methodology.

This change to methodology means you can’t compare raw 2011 and 2016 data (e.g. from tablebuilder) to understand employment change in your LGA, because much of the change between 2011 and 2016 is due to the change in the way it’s coded. The infographic below helps illustrate the difference between making an informed decision and making a decision based on false news.

In the case of some councils, comparing the raw 2011 and 2016 jobs data could have resulted in over-reporting jobs growth by well over 8,000 jobs. Read Glenn’s detailed explanation of this and other examples here.

Why should I care?

If there’s a lot riding on a decision, it’s important to use the right information as the basis for your decision making.

This information is critical when developing your economic development strategy, applying for a grant or trying to attract a new business to your area. In the example above, the economic development strategy should be looking at actions to respond to falling employment, not a strategy that adopts a business as usual approach.

The good news is that for users of our full economy.id tool, we have sourced the equivalent 2011 dataset from the ABS. This is the one with not stated locations imputed using the same methodology as 2016, making it comparable. This is not widely available anywhere else. We have invested in this data, so you can be confident that your decisions are based on actual changes in your workforce age structure, working hours, qualifications, industries and occupations.

And don’t forget as well as the Census data, economy.id shows year on year employment estimates via the dataset from the National Institute for Economic and Industry Research (NIEIR). NIEIR use Census and ABS labour force as a base but are updated every year so you don’t have to wait until the next Census to get a handle on jobs change.

Are you still unsure about jobs data?

Please leave a comment below so we can answer your question for the benefit of all our followers!

Don’t have economy.id in your area?

Our economic profiles (economy.id) are commissioned by local councils and regional authorities from across Australia. If you work for one of these authorities and you would like to learn more about accessing this tool in your area, please contact us here for more information.