Employment in NSW has had a golden run. We mustn’t take it for granted

NSW has enjoyed a prolonged period of labour market strength.The state’s unemployment rate has been under 4.5 per cent for almost five years and well below 4 per cent for much of that time. Last month, the rate was 4.2 per cent – one of the lowest among the states.Unemployment has been consistently low in NSW. Dion GeorgopoulosNSW has not seen such positive job market conditions in many decades.As senior Herald economics writer Matt Wade reports today, the Sutherland area in Sydney’s south had the best unemployment rate of any region in Australia in July at just 2.2 per cent. The northern beaches had the nation’s next lowest rate at 2.6, while the eastern suburbs was third lowest with 2.8 per cent.Unemployment was at or below the national rate of 4.5 per cent in 12 of Greater Sydney’s 15 major statistics districts.Several NSW regional areas also had very low unemployment rates in July, including the Capital Region in the state’s south-east (3.1 per cent) and the Central West (3.5 per cent).It is surprising the state’s robust performance on jobs does not receive more attention because few economic indicators are more important than unemployment.Extended periods out of work can take a devastating financial and psychological toll on individuals. But families, and ultimately the wider community, are also affected.Those who are long-term unemployed report much lower rates of life satisfaction than the community-wide average. The loss of income by parents without a job can undermine the prospects of the next generation.Higher rates of unemployment would also weaken the broader economy and do lasting damage to both federal and state budgets, which are already under pressure.Wade’s report on local area employment trends underscored why there is no room for complacency; some parts of west and south-western Sydney have much higher rates of unemployment than the rest of the city and the state.The highest was in Sydney’s South West statistical district, which takes in Liverpool, Fairfield and Green Valley, at 5.6 per cent. Next highest was the Parramatta district at 5.3 per cent. Those results ranked among the worst local area unemployment rates in the nation.Those results are a reminder that access to economic opportunity varies greatly in Greater Sydney.The contrasting unemployment rates across the city should provoke a stronger policy response from state authorities.These contrasting employment outcomes have emerged as the state economy confronts strong economic headwinds, including elevated petrol prices, higher interest rates and falling house prices.Treasurer Daniel Mookhey points out that if not for strong investment in data centres and renewable energy projects, the NSW economy may be in recession.A pipeline on new industrial projects near the new Western Sydney airport is also helping.Perhaps the biggest threat to the NSW jobs market is higher interest rates. The Reserve Bank has already lifted rates three times this year and recent figures showing inflation remains elevated could trigger another hike in coming months.The long period of low unemployment has delivered huge benefits to the people of NSW. But it should not be taken it for granted.Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.The Herald's View – Since the Herald was first published in 1831, the editorial team has believed it important to express a considered view on the issues of the day for readers, always putting the public interest first.From our partners