It’s get a bit tiring playing whack-a-mole with rentseeker p-rn, those reports, surveys and modelling designed to validate the claims of industries that have adopted the seemingly natural posture of many Australian business, that of hand stuck out towards government in demand.
Trouble is, once these claims circulate, they take on a life of their own, repeated by journalists, reappearing in media releases, rehearsed by industry spokespeople, zombie factoids that roam public debate, sometimes for years afterward.
Gary Black and the National Retail Association this morning got a good run, particularly in News Ltd titles, from an “industry survey” that purported to show that the internet would cost retail 50,000 jobs in the next five years. 2000 jobs had already been lost, Black conservatively estimated.
Now, unlike some alleged “retail associations”, at least Black and the NRA are a legitimate industry peak body. But the “2000” lost jobs appear to include “1000” lost jobs from the closure of Borders earlier this year. Estimates at the time of jobs lost from REDGroup going into receivership were about 300-400, including 100 permanent jobs.
And as was demonstrated at the time, the RedGroup receivership had little to do with competition from online booksellers. Kwanghui Lim, of University of Melbourne, showed that the problems around Borders and Angus & Robertson in fact related to good old-fashioned poor management, not the threat of the online retailing.
And where does the 50,000 lost jobs figure come from?
Retail employs 1.25 million people, with a high proportion of part-time positions. 50,000 is about 4%, a not insignificant chunk. According to ABS data, since the end of 2009, when the industry was propped up by two rounds of stimulus payments from the Rudd government, it has grown strongly in terms of employment — in fact more strongly than its recovery from the slowdown in 2000 and much more strongly than its recovery from the 1990s recession. Despite cautious consumers, heavy discounting and, of course, the alleged threat of the internet, in the 12 months to February, retail put on 50,000 jobs.
One of the characteristics of rentseeker p-rn is a tendency to gloss over the inconvenient fact that revenue lost from one sector will simply go elsewhere in the economy. It’s the reverse of the magic pudding: an increase in taxes on mining would destroy thousands of jobs, but somehow not create any additional jobs from business paying lower taxes, or additional infrastructure spending; pre-commitment limits on poker machines will destroy thousands of jobs in the gaming industry, but the lost revenue would be directed anywhere else; revenue lost from pirated movies won’t be spent elsewhere in the economy but simply vanish.
The retailers of course insist that jobs lost in Australia will follow the money overseas, so they really will be lost from Australia.
But there’s a context for that claim, in a report put out by eBay in March, another industry survey, but one that examined what problems Australia’s online retailers encountered. Over a third of Australia’s online retailers said that manufacturers or wholesalers had tried to prevent them from selling products online, citing the desire not to upset local bricks-and-mortar retailers. One company expressly said purchasing its products online automatically voided the warranty.
In short, even if you take Gary Black at his word and accept retail will turn from job-creating to job-shedding, many manufacturers are negating the potential of local online retailers to create jobs themselves — seemingly because they want to preserve their relationships with larger, traditional retailers.
The malice towards online retailing among Australian companies doesn’t just lack an evidentiary base, it is downright counterproductive to job creation.