Fairfield in Sydney’s west claims to be Australia’s most cosmopolitan city with some 133 nationalities represented. It also has suffered the country’s sharpest rise in unemployment just as the value of local housing crashes.
The reality of Australia’s two-speed economy hits the wall in Sydney’s manufacturing suburbs. Fairfield’s unemployment rate has roughly doubled in the last year to 11% while housing prices are down by 25%.
Adding to Fairfield’s problems is that it is in the very safe labor seat of Prospect, which means Canberra isn’t exactly rushing to offer assistance. The local member, Chris Bowen, has tried to stir the area’s case along but he looks like having all the success of an opposition MP in a safe seat.
Which leads one to add another line to Pascoe’s Law of Disaster Compensation which formerly stated: If your house burns down, quickly set fire to every other house in your street. The idea was that if you suffer alone, you’ll suffer alone, but if you take a swag of voters with you money will be sent. Now I’ll have to tack on the qualifier “if you live in a marginal seat”.
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Bowen quite reasonably points to the $30 million federal handout for workers hit by the closure of Electrolux’s Adelaide vacuum cleaner plant, while Fairfield workers are told to move to WA. South Australia has several marginal seats.
The rational solution is of course greater labor mobility – it’s what is meant to happen and effectively it is what the RBA has told the unemployed to practise. It gets a bit hard though for a blue collar worker who might have bought a unit three years ago on a 100% loan, then loses his job and finds the place is only worth three-quarters of what he paid for it.
Economic necessity should force them to move. If they’re smart, they’ll look for a place in a marginal seat.