Now is as good a time as any to lose your job, but that's cold comfort to auto workers
Growing up I was always more of a Ford kid than Holden. I was in no way a rev-head but country South Australia in the 1980s being what it was you had to pick a side and I picked Ford.
I’m not sure why I chose Ford, and I never got too involved in schoolyard arguments over the two, but I was oddly happy when my parents in 1984 bought a Ford Laser rather than a Holden Astra.
As it turns out, I have never bought either a Ford or a Holden. My current car is a Toyota Camry – one of those built in Melbourne before the plant closed down last month – and I am curiously proud that the car was Australian made.
I have never worried about choosing a favourite brand of fridge.
I note this because there is something about cars that is in a national psyche that is not there for other manufacturing items.
There has been much more coverage and nostalgia about the closing of the Holden plant this week and the end of the Australian-made car than there was last year when the final Australian-made fridge was rolled off the assembly line.
The Australian car industry is perhaps both the most over-glorified and under-appreciated industry in our economy.
Car lovers and those who perhaps value symbolism over efficiency will talk of the vital need for the industry in a way that never gets suggested of other manufacturing.
On the other side economists, and those who perhaps snigger at the thought of spending a day watching 12 hours of cars zooming around Bathurst, look down their noses at the industry and suggest the closure is good for the workers who can go off and get better jobs.
The reality is now is as good a time as any to lose your job.
This week brought excellent news on the employment front. Unemployment fell to 5.5% in trend terms – the lowest since early 2013 – and every state has a lower unemployment rate now than two years ago.
There is now a higher percentage of 25-64 year olds working than ever before – 76.8% of these “prime-aged” adults are employed. And while the level of full-time employment for these workers is not at record heights, the 56.8% of them who are working full-time is the highest for more than seven years.
Full-time employment overall grew by 3.3% in the past 12 months – the strongest since early 2011, and it is happening for both men and women.
Yes the underemployment rate remains high, but even here the original data (which can be a bit noisy) suggests things are improving.
The figures also show that in September there were 75,000 people who had a job in August but who were now unemployed. The good news is there were 125,000 people whose labour fortunes saw them go from unemployment in August to a job in September.
The figures give some context to the 950 workers who lost their jobs on Friday when the Holden factory closed its doors. Now yes, 950 workers in the one place is a big whack of jobs to go at once – but again even in South Australia alone in September 5,500 people lost their job balanced by 6,400 who moved from being unemployed to being employed.
Given the current buoyancy in the employment market it would seem to be as good a time as any to be a worker in a factory that has just closed up shop.
The job losses, however, will likely be larger. The South Australia government has suggested up to 7,500 jobs across the state will be lost in the automotive supply chain and other impacts on the broader economy.
Even the Productivity Commission in 2014 suggested the total nationwide job losses as the result of the end of the automotive industry would be “up to 40,000 people” – although it noted the job losses would be “staggered over several years”.
But even if we suggest that will occur over three years, that would be over a period when around two million Australian workers have been retrenched – around 45% of whom got another job within a month.
And yet, figures can beguile and cover all sorts of harm.
For the workers whose jobs are lost being told not to worry because across the nation things are doing well is small comfort.
And a study of the impact of the closure of the Mitsubishi factory in 2004 found only “onethird of the previously full-time permanent employees were in full-time paid employment 12–18 months after retrenchment, around a quarter were in casual or part-time paid work” – and that was during the period of the mining boom when unemployment hit 5%.
The reality is governments pick and choose which industries to support all the time for reasons that would not pass muster at a Produc-
tivity Commission round-table session – and they rightly deserve scorn when they do.
Just this week as we bid farewell to the automotive industry the government released an energy policy so desperate to assist the coal industry that it redefined “dispatchable” power to include the very non-dispatchable coal.
Similarly, that a project is not economic is not a roadblock to government support when it believes the politics warrants it as is the case with how the Queensland and Australian governments are desperately helping the Carmichael coal mine project despite no bank in Australia seeing a commercial worth in it.
So it is absurd to argue the government could not have done anything to save the car industry, but that does not also mean it should have done it.
Overwhelmingly the main reason for the end of the car industry is the size of our market.
There just are not enough Australians who buy cars to warrant an industry which has such store on patriotic pride. Yes, 70% of Toyota Camry’s produced at the Altona plant were exported, but this also meant it was very much affected by the rise in the value of the dollar due to our strong mining industry.
The other factor is our market is extremely open and competitive. In its submission to the Productivity Commission, Toyota noted that in 2012 there were 344 car models for around 1m in sales, compared to the USA market where there were 325 models and 16m sales.
The reduction of tariffs from nearly 60% in the mid-80s to the current 5% meant local car makers had to compete with imports to the extent that the price of a cars has barely risen in two decades.
That was bad for the industry, but great for Australians who want to own a car. Had the price of my Toyota Camry risen in line with inflation from the end of the 1980s to now, I would have had to pay double what I did.
And so I do feel sadness at the end of the car industry, and yet I – and all of us who have bought cars recently – must also admit to having benefitted from the policies that have led to its closure.