Is mining saving us from jobs doom? Depends who you ask
There is a real case for optimism in the way our economy is performing, but as usual you will have to have a job to enjoy the full benefits. The thing is, most of us will.
Senior Treasury official David Gruen has put some perspective to the claim that mining is a big job generator, creating three other jobs for every person it directly employs.
“If you add up all the jobs that are created by all the industries we’ve got many more jobs than there are in Australia,’’ Dr Gruen drolly told a Senate estimates committee today.
The unemployment rate reported today is good, but not that good.
The Bureau of Statistics said the jobless rate fell from 5.2 per cent in December to 5.1 per cent in January, the lowest level since July last year.
Workplace Relations Minister Bill Shorten greeted the news this way: “More Australians have a job today than ever before in Australia’s history.’‘
That doesn’t fit with recent unhappy news of big layoffs in the finance sector, by Qantas, and forthcoming in other areas of industry.
And, as the Reserve Bank of Australia warned a week ago, job growth has been sluggish. But apart from the bad news for individuals coming with those retrenchment announcements, the economic prospects are improving.
Dr Gruen, the head of Treasury’s macro economic group, continued on the claims that one industry is more important than another in job creation.
“It kind of depends on how you do these calculations,’’ he said in true economist’s fashion. “The right way to go about it I think is that, in a well functioning economy in which unemployment is close to the lowest rate that is sustainable…the idea that any given industry is creating jobs, it’s only doing that to the extent that other industries are employing less people.’‘
So we are close to what used to be called full employment in what Dr Gruen described as “a well functioning economy’‘.
In other economic testimony today, it was argued that the high value of the Australian currency, which is hurting so many industries competing internationally, is a boon for households.
Household incomes grew by around 60 per cent over the past decade and the booming Australian dollar has meant the cost of manufactured goods has basically stayed put.
``The stable prices for many goods, combined with strong disposable income growth, means there is more disposable income to be spent on services,’’ RBA Deputy Governor Phillip Lowe
told the Committee for Economic Development of Australia (CEDA) in Sydney.
But there was the downside.
“The effects of the high exchange rate are evident in the manufacturing, tourism and education sectors, as well as some parts of the agriculture sector and, more recently, in some business services sectors,’’ said Dr Lowe.
“In some cases, this is prompting renewed investment to improve firms’ international competitiveness. But in other cases, businesses are scaling back their operations in Australia and some are closing down.’‘
But overall, the economy is growing and “we have much more flexibility to deal with unfolding events than almost any other developed economy.’’
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