This perceptive short remark, made by a steel worker in Blue Scope’s Port Kembla plant and as reported in today’s edition of The Australian, sums up for me a key reason why specific government job creation schemes, especially popular during episodes of Keynesian fiscal stimulus, turn out to be largely futile exercises in terms of facilitating mass employment creation.
The comment was made in the context of the Gillard‑Brown government’s announcement yesterday that the modern equivalent of the nineteenth‑century Australian
railroad bubble – the National Broadband Network (read: porn; games; faster!) – will be rolled out into the Illawarra region of New South Wales.
The Prime Minister indicated that approximately 500 jobs would be ‘created’ at the peak of laying out the fibre optic cables in the area, and it is hoped that this would partially stem the loss of up to 1,000 jobs from the Port Kembla steel processing factories.
When saying that ‘the majority of steelworkers haven’t got the qualifications; (building the NBN) is a totally different trade,’ steelworker Mr Fernando da Rocha expresses an important, common sense proposition that somehow often eludes most politicians and policymakers: labour is heterogeneous.
This proposition implies that it does not automatically follow that labourers made idle, for whatever reason (ranging from a generic economic downturn to firm‑specific operational factors), can automatically be engaged in another line of work.
And this applies even in the case of manual work, where the seen exertions of physical labour on a given project, that to the naked eye any fit, able‑bodied person could perform,
do not necessarily reveal the unseen application of idiosyncratic technical skills drawn from many years of knowledge and expertise drawn from specific courses and on‑job training.
Most critics of the Rudd‑Gillard 2008‑09 fiscal stimulus will recall that the Building the Education Revolution (BER) program was identified as being one ridden with numerous flaws, including the charging for supplies and construction work at two (and in some reported cases) or even three times the going market rate for these inputs.
As the dust starts to settle on this infamous program, a reasonable conclusion to draw is that BER could only be counted as effectively a massive kickback to the construction unions for their generous financial and logistical support of former Prime Minister Kevin Rudd’s election leading up to November 2007.
But the former Education Minister, and now PM, Julia Gillard did rhetorically predicate the BER not only on the basis that it would ‘protect’ jobs in the heavily unionised construction sector but would create some, too.
The trouble with the ‘BER as jobs creator’ idea was that, as I scanned through sector‑level employment data during 2009 and 2010, I noted that many sector specific job losses occurred within the financial sector (also remember, this sector was one laced with governmental deposit guarantees and the like).
It’s difficult to sustain the idea that the BER, the ‘Canberra iPod docking station’ local community grants program and other Rudd‑Gillard stimulus capital works initiatives, incidentally all put on the public sector ‘Bankcard’ for future workers to repay, led to an army of white‑collar, office‑inhabiting financiers receiving their bank redundancy cheque, then grabbing shovels and picks and shouting out repeatedly ‘hi ho, hi ho, it’s off to work we go’ as they marched towards construction sites.
In fact, I’ll even go further and wager that the stimulus works possibly didn’t draw in any financial sector workers for manual work whatsoever.
While it seems many laypeople do subscribe to varied anti‑market biases and other economic fallacies, I’m more than happy to accept the common sense logic of labour heterogeneity held by Mr da Rocha over Prime Minister Gillard’s government‑as‑jobs‑creator fallacy any day of the week.