For the last few years, on average, around 145,000 people have been retrenched every quarter, or around 1.25% of the workforce. Normally, not a lot of fuss is made about those lost jobs, despite the dislocation caused to workers. Around half are back in the workforce again in the same quarter, the ABS data show.
An awful lot of fuss is being made about the closure today of Holden’s Elizabeth plant, the last car-manufacturing facility in Australia. That will be highly dislocative for 950-odd staff who will lose their jobs, as it has been for the 800-odd who’ve lost their jobs since the closure was announced in 2013. Stories have been written about the “iconic” Holden brand, about how car manufacturing supported families, many of them migrant families, about couples who met at the manufacturing plants, about how important manufacturing is.
All of this is true, of course. But it’s no more true than of any other sector. Australia continues to draw large numbers of immigrants, who find work in other sectors of the economy — mainly in the services sector, often in health and social care, which for years now has been our biggest employer. Families and communities are sustained by all sorts of industries. Couples meet in workplaces across the country every day. Everything written about the closure of Holden could be written about any other industry.
But car manufacturing always placed a spell on us, especially on policymakers. For decades, we forced consumers to pay punitive tariffs if they wanted to buy an imported car. We spent tens of billions of taxpayer dollars as, effectively, bribes to American and Japanese multinationals to continue to build vehicles here, even as car manufacturing became a highly automated and lower-skilled task that could be much more cheaply performed in developing countries.
In 2008, the Productivity Commission calculated we were spending over $23,000 a year subsidising each car worker’s job, although that figure fell in ensuing years as subsidy programs wound up. We even justified protectionism by arguing that other countries were also punishing consumers and handing taxpayer money to multinationals, so we should as well.
Nor did the usual politics apply to this industry. Both Labor and the Coalition, until 2013, backed continued protection for the automotive sector (even now, despite the closure of the remaining local production facility, you can’t import a second-hand vehicle without punitive tariffs, because there’s bipartisan protection for the automotive retailing sector). And unions — from both left (the AMWU) and the right (the AWU) — and employer groups were happy to put aside their traditional antipathies and be as one in supporting this policy.
Other manufacturing industries didn’t fare so well, because the unions and businesses involved were less powerful. And the workers were more invisible. We dumped most tariff protection and any budget support for the one manufacturing industry with a strong female presence, textiles and clothing, back in the 1990s. The steady closure of textiles and clothing manufacturers rarely attracted attention either from the media or policymakers, even as the number of Australians working in textiles, clothing and footwear manufacturing fell from over 100,000 in the 1990s to, at last count, around 34,000. The stories of those workers who lost their jobs rarely made the news.
There’s one way in which we should regret the end of car manufacturing in Australia, however. As it turns out, automotive protectionism was a relatively efficient means of subsidising jobs. In the post-neoliberalism era, we’ve now embraced defence protectionism, in which taxpayers will spend up to 30% more to build large naval vessels here than buy cheaper, better versions from countries with greater economies of scale and comparative advantage. Defence protectionism come with a much higher price tag per job than making cars — in the hundreds of thousands of dollars per job. And the billions of dollars that we will spend on less than 3000 mainly South Australian jobs to build new warships will translate into millions per job in total, before the inevitable cost blowouts of projects like the new submarine fleet.
From a taxpayer and economic efficiency point of view, it would have been better to stick with propping up multinational car manufacturers.