Wednesday, October 29, 2014

Becalmed by SALM

The Australian Department of Employment have updated their Small Area Labour Market (SALM) data up to the June quarter. Conus has posted updates on this for NQ LGA's. Small Area Labour Market data for the Far North ; Updated Small Area Labour Market graph

I confess to being becalmed by this for a few days while trying to get my head around the data and methodology. This latest update on the series has been delayed and is now based on the updated SA2 geographical areas, and also finally updated for the 2011 census.

The Structure Preserving Estimation (SPREE) methodology here is based on data from Centrelink, ABS labour force survey, and the 2011 census:  "The purpose of SPREE is to produce small area labour market estimates that reflect the regional disparities of the Centrelink data, while being consistent with the ABS Labour Force Survey estimates."

There is further detail provided at DoE. However to get to the outcomes for Cairns I have taken the unemployment rate data for the small SA2 areas within the SA3 areas of Cairns-North and Cairns-South which comprises what we understand as the urban area of Cairns for June quarter 2014. The larger Cairns SA4 region is reported monthly by the ABS labour force survey and includes Cassowary Coast, Tablelands, and Douglas.


I don't think there are many surprises there. The new SA2 data series only goes back to Dec quarter 2012 so to concentrate on the subsequent period the change in the 18 months up to the latest June 2014 quarter is this:
The largest falls have tended to be in areas of the highest unemployment but not exclusively. Perhaps to be expected. The largest move here is in Cairns City itself which I suspect also has a highly mobile population.
Just outside this geographic zone there was a big fall in Yarrabah although still at very high levels. This was replicated around communities on the Cape but not universally indigenous with an opposite move down on Palm Island.
The unemployment rate is defined as the level of unemployment as a proportion of the labour force consistent with ABS methodology. However unemployment itself is derived differently by "apportioning the level of unemployment at the SA4 level, as published by the ABS, across each of the SA2s within that region in accordance with the distribution of Centrelink Newstart and Youth Allowance (other) beneficiaries, benchmarked by ABS unemployment estimates by age, sex and marital status at the Greater Capital City Statistical Area (GCCSA) level."
This is the change in the SALM number unemployed for the SA2 areas over the 18 month period:

As we know, or should, the trend decline in the ABS unemployment rate for Cairns SA4 over this period has also been accompanied by a lower participation rate and lower estimate of aggregate employment. The SALM methodology takes SA2 participation rates from the 2011 census and ABS population estimates to then allocate a weighting for each SA2 labour force within the larger ABS SA4 for Cairns Region. 
The SALM methodology advises against directly inferring employment. So to ignore employment and just use the labour force numbers provided from SALM which are then used with unemployment to derive the unemployment rate these are the relative declines for Cairns SA2: 

What does it all mean? I would advise it is time for another vino! Although it did cause me to quickly look for some Centrelink data and while the most easily available was only the 9 months to June 2014 for Newstart and Youth Allowance there are some quite significant changes in that period between the largest LGA's in Queensland:

Cairns would still remain well above Townsville and Mackay relative to population for total numbers.

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