In a recent meeting with a person who is pretty senior in the automotive industry he was telling me that certain things close to his heart (which had something to do with the government subsidising his business!) would be ‘good for jobs’. He’s a bright sensible guy and, unlike lots of them acknowledges that he knows that, in the absence of unusual circumstances, if the government had a billion dollars with which to promote industrial development, it could do a fair bit better than give it to the automotive industry.
When he said something would be ‘good for jobs’, I said “why do you want to create jobs. Haven’t we already got more than we can handle?” He immediately got what I was saying. The RBA have already said as much. Trying to slowly push down unemployment – already well below the figures that people had previously estimated the NAIRU or Non-Accelerating Inflation Rate of Unemployment at – the RBA reckons we need to ease up on all that job creation. It’s specifically concerned that job growth is fuelling wage inflation. So if you hear that something will be good for jobs, just pay a bit closer attention. Jobs on their own are no longer a blessing.
That doesn’t mean we shouldn’t keep trying to increase employment – there’s still lots to be done – to increase the employment of those that could benefit from being in the workforce, to get those who’s marginal productivity is below the current basic wage into the workforce and to move up the skill chain. To grow high skill jobs. But creating jobs for the sake of it? No.
It reminds me of the politics of the late Menzies period – when there was genuine full employment, meaning that pretty much anyone could get a job if they wanted one. And yet we kept coming up with new and ingenious ways of expanding protection – for instance in the car industry.
There’s a passage in Hansard where (I think) the Deputy Leader of the Opposition the Hon Edward Gough Whitlam asks Menzies about the automotive industry. Whitlam was one of the few people who was critical of the industry for not exporting more. Meanwhile protection was rising alarmingly in the industry as a result of the agitation for local content plans of Sir Charles McGrath, Chairman of Repco and also of the Victorian branch of the Liberal Party – from memory. Menzies said words to the effect “Well I keep being invited to the opening of factories and if the Deputy Opposition Leader has a problem with that, I don’t”. And so the merry go round of protection all round went round faster and faster. As people took protected jobs – and so became unavailable for more productive jobs for employers in other industries who didn’t have access to the cancerous local content plans.