Perhaps it’s best to channel Ross Gittins’ steel-trap mind as you confront the twin headlines today about Qantas layoffs alongside the ABS’s surprise January unemployment figures — the rate fell to the lowest level since July 2011. As he wrote in The Sydney Morning Herald yesterday:
“You’d need the steel-trap mind of an economist to say to yourself: ‘These stories I’m hearing about layoffs here and there are sad news for the individuals involved, but they don’t really prove anything. To make a balanced assessment of what’s happening in the labour market I need aggregate statistics, not anecdotes — and the last stats I saw said that, overall, employment is growing sufficiently to hold the unemployment rate steady at 5.2 per cent.'”
A lower than expected 5.1% in January, to be precise, according to unemployment figures just released.
So while we may be moved by the plight of 500 sacked workers at Qantas, or layoffs at Toyota, or a thousand-odd staff gone from ANZ, it’s best to remember, as Gittins says, just how big the economy is — “there are 11,421,300 people in the labour force, either in a job or actively seeking one. So 350 people represent 0.003 per cent of the total.”
As Glenn Dyer and Bernard Keane write in Crikey today:
“The jobs market is weak in sectors like finance, retailing and some areas of manufacturing. But it is strong in others (and sometimes it’s strong in some sub-sectors of retailing and manufacturing, too). That is constantly overlooked by the jobs alarmists who overcook the numbers or the trends in the economy.”
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That the job market is weak in finance and retail is partly due to the massive run up both those areas had over the past decade. What goes up quickly, generally comes down even quicker.
And the strength of the A$ has an awful lot to do with the rest of the weak areas. It either makes our locally manufactured goods harder to sell overseas or less competitive against equivalent imports.
And why is the A$ strong – resources boom, other currencies/economies are crap, interest rate spread etc.
It’s not rocket science, all inter-related and all pretty predictable. As is the simplistic analysis (I am being generous) behind most of the media stories.
Wrong link to The Australian instead of SMH?
Despite the clear & unequivocal facts, falling U/E, (male – ie real people below 5%) what does ABC TV lead its main 7pm news with, the hundreds & thousands of jobs lost and/or threatened!! FFS!
Yes economists. Helpful lot aren’t we?
Like the old equation: … feet in the oven + head in the fridge = average comfort.
And in WA, Queensland and the Hunter the feet are in the oven. And other, older areas – the places where people live, where they worked in factories or shops.
I live in one of the largest mining regions in the country – in the world actually. There has been a local mining boom here for 20 years.
This is what it looks like: The towns up the valley, near the mines, are alive with new things … new utes, new houses, new cars, new suburbs, new towns, new rail lines, new freeways …. the place is going gangbusters. Everyone wants to get work in the mines. They are hungry for it. There is the scent of money in the dusty air.
30 miles down the track from these new cities is the city I grew up in. It is empty. Deserted. The steel works, the dockyards, the fabrication shops, the docks … all have been dismantled. The endless main street is empty. Every second store is boarded up. Everything is for sale or lease. It looks like Detroit.
Now looking at the averages, this valley is exploding in prosperity. But at the smaller, more personal level – where averages don’t mean too much – many people feel that the boom has passed them by and taken everything with it … including a future.
The distribution of benefits from the mining industry is massively unequal. There are winners and there are losers. Some regions win. Some regions lose. And it is the role of government to ensure that these benefits are distributed fairly and that regions are helped to cope with the inevitable dislocations of a changing economy.
So while one can comfort oneself with the healthy national numbers – those oven/fridge averages – there are serious negative consequences for those older, less competitive, trade exposed industries… the ones that used to employ people in my old town.
Economics can be a damn blunt instrument.
Interesting article, good comment Peter, I am starting to think that the mining boom has produced more negatives than positives, especially for environmental and human health.
The mining boom has created the economic environment for massive job losses in unrelated industries.
On to banking job losses. I know it has been said before in the nineteen fifties, but hey, lets get these banks back into public ownership or at least one of them to keep the others honest. In my view that was the worst thing about selling the CBA, there was no check and balance in the system anymore.