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Policies risk making job losses worse

By John Black - posted Tuesday, 6 January 2009

Greenies and union officials often criticised the Howard government for its blinkered views on environmental and industrial relations issues, but John Howard left office having halved our unemployment rate over 11 years and we tend to take that achievement for granted.

The Rudd Government is going to find out this year that these three subjects were linked and that introducing even watered-down versions of an emissions trading scheme and minor re-regulation of the labour market during a global recession are likely to drive unemployment higher than it would otherwise have been.

The Australian Bureau of Statistics breaks the monthly unemployment figures down into 59 regions across the country and I've used these figures to profile unemployment changes in two categories: long-term and short-term.


The long-term changes take the figure for the last available month - in this case November 2008 - and benchmark them against the figures for the same period 12 months ago. This removes the seasonal element that sees unemployment typically rise over Christmas, as school leavers seek jobs and register for unemployment at the end of the school holiday period, and fall towards the middle of year, as this age group gradually finds jobs.

This long-term figure shows a narrow majority of our labour force regions are experiencing unemployment growth the likes of which we saw at the start of the 1990-91 recession. This is not a good look for the December gross domestic product growth figures. The short-term changes compare the November 2008 figures with the October 2008 figures, so we can see what changes are occurring in the real-time economy. I modelled both sets of changes against our database across the country to see which demographic groups have been hardest hit and which groups have been so far unaffected.

Short-term unemployment modelling for November compared with October shows the latest increase in unemployment to be strongest among men working in the hospitality and service industries. These are people employed serving and selling food and beverages in bars, cafes and restaurants, and their employers in a number of states are being slugged additional penalty rates under the first of Minister for Employment and Workplace Relations Julia Gillard's new standardised awards.

This means we can expect more unemployment increases with these workers in January as already marginal restaurants and bars close shop on weekends, in a pretty stark example of the ACTU and the Government trading workplace conditions for jobs at a time of rising unemployment.

Perhaps the PM needs to remind Gillard about the first part of her ministerial job description: she is the Minister for Employment, and not just Workplace Relations.

To round out the short-term profile, we're looking at more mobile, younger workers, often employed on casual employment structures (for cash) and living in more inner-city type rental accommodation. Females working in the arts and recreation industry are also on the list of short-term job losers. Overwhelmingly, these are people or couples who are unmarried and have no children and, without a job, they are likely to stay that way. Politically these groups tended to vote Labor or Green in 2007.


Those groups unaffected so far by short-term unemployment increases in November include the older and more stable married couples with children, especially if they're old enough to have fully paid off the family home and they've progressed in their job to a more senior, often managerial position, typically in a secure public service job.

In political terms, these groups were pro-Coalition in 2007, but they provided the bulk of the swing to Labor flowing from the working families campaign. So the outer-urban car commuters who put Labor into office from marginal seats did not feel much pain from last month's unemployment increase.

Which brings us to the longer-term comparisons.

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First published in The Australian on January 2, 2009.

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About the Author

John Black is a former Labor Party senator and chief executive of Australian Development Strategies.

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Creative Commons LicenseThis work is licensed under a Creative Commons License.

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