Warrawong, Port Kembla and Berkeley are among the most disadvantaged suburbs in NSW, according to a new report, which shows problems such as unemployment, prison and psychiatric admissions are entrenched.

The Dropping off the Edge report, published by Catholic Social Services and Jesuit Social Services and released last week, reveals the three suburbs were part of the 40 most disadvantaged postcodes of 621 NSW areas.

The report, by Sydney University's Professor Tony Vinson and Associate Professor Margot Rawsthorne, ranked the areas according to 21 indicators, including income, education level, literacy and numeracy, long-term unemployment, juvenile offending and criminal convictions.

Warrawong, Port Kembla and Berkeley are in the top 5 per cent of disadvantaged postcodes, while Brewarrina, Claymore, Lightning Ridge, Walgett, Wilcannia and Windale are the six highest-ranking areas according to disadvantage.

Warrawong was among the most disadvantaged postcodes according to a 2007 study by the same authors, who say their new findings indicate "persistent and entrenched locational disadvantage". It has a high proportion of people on Newstart, many students not meeting literacy and numeracy standards, high school drop-out rates, high prison and psychiatric hospital admissions and many families surviving on less than $600 a week.

Port Kembla was ranked in the top 10 per cent in the 2007 study, while Berkeley appears among the 40 hardest hit communities for the first time.

Prison and psychiatric admissions and long-term unemployment are the biggest issues in Port Kembla, while in Berkeley, it was psychiatric admissions and unskilled workers.

The findings are no surprise to Warrawong Community Centre housing communities program co-ordinator Phoenix Van Dyke.

"I worked here [Warrawong] in the 1990s and I came back a couple back a couple of years ago and the situation hasn't changed since then, which is very disappointing," she said.

The biggest issue was unemployment.

"More and more people are getting laid off, every day you listen to the news with some other company closing down."

Ms Van Dyke said the effects of job cuts at BlueScope Steel were still being felt.

"Warrawong has always been very stagnant in regards to business activity. People here can't afford to buy a lot of things. There's no incentives for new businesses to open and provide employment."

Warrawong had three large public housing estates and a concentration of people with multiple disadvantages such as mental health problems, job losses, domestic violence and drug and alcohol abuse.

Ms Van Dyke said a more holistic approach with all levels of government working together to provide a one-stop shop of health, education and employment services was needed.

Wollongong Lord Mayor Gordon Bradbery said the three suburbs represented 8.5 per cent of Wollongong's population.

"There are pockets of disadvantage but the city is not overwhelmed with disadvantage like some other areas," he said.

"Those three areas are on the way up, they are not where they were in 2007."

Cr Bradbery said as chair of the joint organisation of councils he would see what could be done to deal with some problems.

Federal Labor MPs Stephen Jones and Sharon Bird have used the report to argue against raising the GST, saying it would hit the vulnerable residents hardest.