Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.

 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate


On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.


RSS 2.0

Government stimulus is proving fragile

By John Black - posted Monday, 12 October 2009

Our profile of the August unemployment figures shows a net 240,000 Australians have lost full time skilled blue collar, clerical and professional jobs since November, due to the recession, while the stimulus has helped to create 168,000 minimum wage, part time, jobs.

As well as providing jobs for the long term unemployed, between last November and August, the stimulus even pulled an extra 57,000 underemployed Australians back into the workforce. Where Peter Costello had begun a trend to boost workforce participation with the sticks of WorkChoices and Welfare to Work, Wayne Swan has accelerated it, aided by the freezing of minimum wages and the carrot of a $95 billion stimulus. That’s some carrot.

This is why unemployment is now at 5.8 per cent instead of 7 per cent and represents the human face of the economic return on the government’s $95 billion stimulus. The question now worrying the government and its advisers is: how long will these stimulus jobs last? Until the next election is their fervent hope.


Hardest hit by the recession to August were younger, white collar, clerical workers and professionals in middle income full time jobs carrying large per capita mortgage debts - many acquired due to the government’s first home buyers scheme. The August unemployment profile of these groups shows they now have less chance of holding their jobs, than previously underemployed households whose primary source of income until the stimulus was government welfare.

There’s been some decent jobs created over the past nine months in agriculture and mining, but that’s probably got more to do with the weather and the Chinese stimulus, than to any action of the Australian Government.

Jobs that have been preserved since last November - as opposed to created - are in the unionised public sector areas of health and education and the private sector industries of construction, manufacturing and transport, although there are some signs of recent weakening in both manufacturing and transport.

In their place the stimulus has created jobs for labourers across no industry in particular, and workers have been drawn from normally welfare dependant, older, less well educated Australian-born groups normally not engaged in the workforce.

These have tended to be clustered in rural and regional Australia - Richmond Tweed, Wide Bay, Southern Tasmania, Gippsland and the Illawarra, and low socio-economic status (SES) outlying blue collar suburbs in the capital cities, while the inner urban wealthier suburbs and more middle class urban regions have suffered major jobs loss.

This transfer of the misery of unemployment has tended to level out unemployment across Labour Force Regions, with low and high SES regions returning similar unemployment levels.


For example, in the 12 months to August, while the ten wealthiest Labour Force Regions had seen unemployment rise by 1.7 per cent, to 4.7 per cent, the poorest ten regions saw unemployment fall by 0.4 per cent to 4.4 per cent. These are pretty astounding margins and in the long term, clearly unsustainable, unless the government has discovered a new form of trickle up economic recovery.

In middle class regions, it’s been worse. The jobless profiles for the politically volatile, young, middle white collar families are just plain ugly and in August they were getting a lot worse very fast. This important political group has been missed completely by the targeted spending of the stimulus.

It was very brave of Treasurer Swan to target lower income households with buckets of borrowed cash early in the recession, but calls to mind the strategic error by Kim Beazley’s advisers before 1998, when Labor won 51 per cent of the vote but lost the election, because Labor’s tax package was rejected by middle income Australians in marginal seats. These advisers are not unknown to our current Treasurer.

  1. Pages:
  2. Page 1
  3. 2
  4. All

First published in the Australian Financial Review on October 5, 2009. The unemployment profiling project is sponsored by the Local Government Association of Queensland.

Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

5 posts so far.

Share this:
reddit this reddit thisbookmark with Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

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

Other articles by this Author

All articles by John Black

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

Article Tools
Comment 5 comments
Print Printable version
Subscribe Subscribe
Email Email a friend

About Us Search Discuss Feedback Legals Privacy