Thursday, March 25, 2010

Job Losses Make Us All Poorer

The latest figures from the Australian Bureau of Statistics show a significant increase in the number of so called “discouraged job seekers”. These are people who are not counted as part of the workforce because they have given up looking for a job. It doesn’t mean that they don’t want to work, and it doesn’t mean that they are incapable of working. It means that they have arrived at the stage where there seems to be no point in even trying to find a job. The most common reason for this is that employers consider them to be too old, and the next most common reason is that there are no jobs in their locality, or in their line of work.

In all, there are almost 5.7 million people aged 15 or over who are not in the workforce. That’s one third of the total population in that demographic. Thankfully, most of them do not want to work either because they are retired, voluntarily inactive, or devoted to “home duties”. But those who are officially categorized as “discouraged workers” have increased in number from 73 900 in 2008 to 111 800 last year. That’s an increase of almost 40 000, or more than 50%. That’s an extra 111 800 people that you can add to the unemployment statistics, along with the much greater number of underemployed, if you want to get a complete picture of how people are managing.

It’s bad enough that so many people have found it so hard to get work that they have given up, but the real problem is that it is only going to get worse. We have a combination of an ageing population, a workplace culture that favours younger workers, and ongoing structural change in the economy as more and more jobs are exported to cheap labour in places like China, Malaysia, and India. The latest example is the closure of the Bonds factory yesterday at Wollongong. 200 staff left the factory for last time and the gates were closed behind them. Some of them will find other work, and some of them will be retrained, but some of them might never find a job again.

This is the cost of allowing entire industries to wither away because workers in China are paid a fraction of the wages paid to Australians. There are all sorts of reasons for encouraging free trade and allowing cheap imports, but there are also great risks, including the dislocation of workers who have spent a lifetime acquiring skills which are no longer required. This leads to other effects including the wider social dislocation of increasing numbers of disenfranchised people, right through to the loss of the capacity, the ability and the knowledge to actually manufacture anything for ourselves should it once again become necessary.

We can all relate to the impact of the personal cost for every individual who is made redundant in this way, but there is also a greater cost to the entire community which should also be recognized.

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