Jobs Jobs Jobs

Many of the proponents of the airport proposal in Badgerys Creek cite one major benefit - that being "jobs" hopefully closer to home for local residents. I've seen in articles, forums, presentations, lectures and more all spruiking the job benefits that the airport can bring. In fact for the local community this probably is the only potential benefit an airport they can sell; airports as a whole are normally a negative on the local communities around them (a quick Google search showed at least one but there's plenty of research on the subject).

There's quite a few questions that need to be answered to verify the proponents arguments. For me these are:

1. Are the jobs really going to come from this?
2. Are the jobs the kind of jobs we want? Do they come at the expense of other jobs?
3. Overall are the surplus in jobs created by this proposal vs using the land for other purposes enough to really be worth the cost?

It's the second question that really got me thinking especially knowing that the NSW Government had recently asked the Federal Government whether they could include the Badgerys land as part of their BWSEA (Broader Western Sydney Employment Area). The idea of a technological park similar to say Macquarie Park or an employment centre similar to Norwest with the added benefit of easy transit links made me believe at the time that there may be a possibility I and other technical workers could work closer to home.

Of course with Qantas closing maintenace facilities at Avalon - the other secondary capital city airport in Australia - I doubt the technical job opportunities will continue to be locally based if this airport arrives. While Qantas and Virgin Blue have recently recovered their profits for many years they were experiencing losses of a large scale; avidation generally hasn't achieved a good rate of return as an industry. Even Warren Buffet being the famous investor he is doesn't believe in investing in air travel. Aviation is the most globalised industry on the planet due to its nature; there is no real reason why routine maintenance can't be conducted at other sites or by other contractors offshore.

Airports encourage certain industries to flourish nearby; I side with the opinion that most of them are not technical in nature. Warehousing, transport, retail and tourism are normally the industries to benefit from aviation facilities; not technical or office jobs. There are many reasons at present to believe that technical orientated jobs are not really orientated around airports per se but the technological parks around them; in fact with this airport proposal it could very well be that the land acquired for warehousing, hotels and the like could crowd out the potential of much higher paid skilled work.

Avalon's airport economic benefit summary states that the main job centers created nearby are airport construction (not permanent), hotels, industrial warehousing, service stations and retail outlets. If you drive in the employment lands in the WSEA (the biggest employment land by hectare in Sydney) that's about the only industries in the area and unfortunately at this stage they aren't the massive providers of jobs that locals desperately need. This will only probably be encouraged by the development in my opinion.

The other point is that the land marked locally for the airport had alternate uses; some of which may have given more long term employment of a better caliber than an airport would. Plans for employment lands there have been  before the airport announcement (dated June 2013); in fact the linked FAQ shows these industries were planned to settle there; planning was commencing with or without the airport for the "Western Sydney Employment Area". It pays with this airport proposal to think about the "net" effect on jobs rather than quoting the "gross" job numbers; the smaller the net number the less benefit the airport has on jobs. This point of comparing "net benefits" that may of come anyway is especially important when compared against the costs that an airport brings to the local community such as noise, congestion and pollution. Admittedly jobs may come sooner due to the airport proposal; however since the land would of been used for employment lands anyway at some stage the extra benefits of an airport to me are questionable.

Interestingly another person in a very pro-airport article agrees with me(see http://www.smh.com.au/nsw/deadlines-loom-for-badgerys-creek-airport-at-last-20140912-10ftpo.html) - a professor from UWS (the local university to Badgerys) thinks that unless the development is supercharged into a large major airport it won't deliver the benefit that is being espoused; at best it will cater to freight and budget flights with its lack of curfew status being its main appeal.  This coming from an article that is supporting the development; it therefore has to assert that airports are where the productivity is which I would also question; correlation is not causation. I would assert that airports derive their economic benefit from their location as is the case with the current Sydney Airport; the the fact that it serves a very productive CBD and therefore can tap into and serve this market is its main economic contribution. Cities in economic terms are much more relatively productive than other areas due to their economies of scale and its where this scale is that airports are best positioned. In other words they serve economic CBD areas; many of which were developing organically way before air travel became a big thing. Supercharging the airport development by making Badgerys a CBD in it's own right is an option but has a lot of other concerns in terms of over investment (i.e a potential white elephant development) and the increased community impact of noise and pollution. After all how much money should we invest in yet another Sydney CBD especially when arguably we've haven't made our second CBD work as of yet (i.e Parramatta)?

In conclusion new jobs in the employment lands of South West of Sydney are mainly of the warehouse kind. An article summarises the current problems in the South West of Sydney - although the same local paper mentions Badgerys Creek as a saviour. I would instead assert that given the anticipation of the airport development what's happening currently with the employment lands in Western Sydney is exactly what's to be expected - warehouses upon warehouses of land with a small amount of sparsely populated jobs. I wouldn't be surprised if the likes of Toll and DHL - among just some of the companies building large warehouses out here - are part of the lobby pushing for this proposal; a freight based local airport will make their lives easier even if it doesn't provide more work.

The jobs promised in the area would have eventually arrived anyway with the plans for the area. They would of come without the usual community costs that an airport delivers. I am particularly concerned that the "net" job numbers long term are actually negative as low density industries that prefer locating themselves near an airport crowd out more job dense and high tech industries although at this stage I have no way of quantifying this.

On a side note it seems both the local newspapers are really supporting this development which really shows - unfortunately the statements made to support the airport are usually just thrown into the article without any real support to back them up; I wonder how many jobs say Avalon airport - another secondary Australian airport - has created? (Hint: It's not many). In fact it's going to reverse with most engineering and maintenance jobs moving offshore.

UPDATE: This update was written some time ago but unfortunately/by accident was not posted. Since then Qantas has recovered its profit mainly due to low oil prices. I wonder however whether this is a blip in generally what is a one of the worst industries historically in terms of profitability and return on capital.