Current Issue #488

Men Out of Work: How We Can Avoid a Male Job Recession in SA

Men Out of Work: How We Can Avoid a Male Job Recession in SA

One of the good news stories of the last decade has been that South Australia and the nation avoided being plunged into recession by the Global Financial Crisis (GFC). Early intervention by the Rudd Government played a critical role in helping to sustain confidence in the banking and financial sector and bolster consumer and industry confidence.

The Stimulus Package did what it needed to do – fill the investment gap created by the GFC. Without it we would have seen unemployment rise well above eight percent nationally and close to 10 percent here in South Australia.

The problem we face right now is that while employment has been growing in South Australia it has not been fast enough or in the right sectors to help prevent a growing male full-time employment crisis.

The main drivers of this have been the high Australian dollar and the two-speed economy. While we were a minor beneficiary of the mining boom, this didn’t compensate us for the damage that the high exchange rate did to the competitiveness of our manufacturing sector. Adding insult to injury, we are now confronted by the closure of our automotive industry – an industrial calamity that I think could have been prevented by a more judicious national response to the unfolding crisis.

While we can’t prevent the auto closure, we can prevent it plunging thousands of South Australians into unemployment, underemployment, poverty and hardship.

My fear is that the impact of the closure on South Australia continues to be underestimated nationally. As a consequence, the strategies being rolled out to deal with it will not prevent unemployment rising sharply, particularly male unemployment.

Here’s why. While total employment in South Australia is growing, this masks a problem – a serious problem that is set to get much worse with the closure of the automotive manufacturing industry next year. Male full-time employment growth in South Australia has collapsed and it is set to get much worse over the next year or so if we don’t put in place short-term measures to boost full-time jobs growth. All of this is happening on the back of a sustained hit to manufacturing employment over the last 10 years – a trend that is set to continue till we stabilise the sector.

holden-aftermath-1.jpgAs SA’s manufacturing industry winds down, how can we transition workers into new employment?

South Australia will go into 2017 with a male unemployment rate of around seven percent and male full-time employment growth in reverse. This is a diabolical combination. After peaking at around 365,000 in 2008, it is now around 336,000. It threatens to get as low as it was during the 1990s recession when it bottomed out at around 313,000. This is not difficult to imagine in a slow-growing economy about to endure the collapse of one of its major industries. As we know, the closure of automotive manufacturing in SA will lead to the loss of many thousands of jobs across Adelaide. Most of these are held by men and most are full-time jobs.

So with male full-time employment in reverse, job prospects for men next year are poor – both in terms of quantity and quality. All the recent growth in male employment is part-time, so we can expect male underemployment to rise sharply with the further loss of male full-time jobs in SA. Related to this is the fact that employment growth in South Australia is concentrated in sectors such as health and aged care, which many men working in manufacturing cannot easily transition into.

While transition to other sectors might occur over time, the short-term imperative is to create employment in sectors where the prospects of re-employment are much higher – sectors like transport, housing and infrastructure. I have said it before and I feel compelled to say it again – we don’t have sufficient projects coming on stream over the next two years to fill the employment gap that will be created by the continued haemorrhaging of male full-time employment. This is an entirely preventable crisis if we act now, but it will require reaching a consensus that we need additional short-term economic stimulus in South Australia.

There are roads to ruin and pathways to prosperity. At the moment we are heading down a road to ruin, hoping that it won’t be as bad as we fear and holding off on the investment required to ensure that it isn’t.

I am going to explore this and much more at a talk on ‘Roads to ruin, pathways to prosperity’ at this year’s Festival of Ideas. Join me and dozens of other speakers who will be celebrating the many contributions that Phillip Adams makes to Australian intellectual life.

John Spoehr is Director of the Australian Industrial Transformation Institute at Flinders University.

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