Without jobs we're Scrooged

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Auto assembly line

In both the United States and Australia, General Motors has been portrayed by cynical commentators as a government-sponsored employment agency and not a proper business. They miss the point that subsidised companies and their government patrons are investors in human capital, and that it's human capital — rather than money — that makes a society work. 

Human capital is the combination of competencies and creativity that enable a person to perform a task that produces both personal fulfilment and economic value. The idea is that the subsidies will contribute to both the wellbeing of the workers and financial profits of the company in a manner that brings mutual benefit without exploitation on either side. In the case of car manufacturing around the world, the alternative is workers without jobs and companies without profits.

Pope Francis says that workers without jobs adds up to workers without dignity. 'Work means dignity, work means taking food home, work means loving!' A society where 'money is in command' inevitably lays waste its workers, and the young and old people who depend upon them. 'We must say: "We don't want this globalised economic system which does us so much harm!"'

A successful nation doesn't need a car industry, but it must have its working age citizens employed, or they and their families will suffer the depression and economic hardship that are characteristic of a society where money comes before love. If a government kills a car industry by withdrawing subsidies, it must have in place a secure plan that will ensure those who lose their jobs retain their dignity. The best way to do this is to make sure they have jobs to go to. The government is effectively an employment agency, with employment so fundamental to the wellbeing of the citizens that make up the nation.

Because a government must avoid taking its workers for granted, decisions that have consequences for employment are among the most serious it needs to take. The reporting of the current government's actions with regard to Holden suggest it may have been cavalier in the way it dealt with the parent company General Motors when so much human capital was at stake. Moreover it has no obvious plan for dealing with the total fallout for employment, including the likely flow on for Toyota workers. 

The loss of jobs in the automotive industry has occurred against a background of rising unemployment, according to figures announced on Thursday. But the trend is even bleaker, with NSW treasurer Mike Baird gloomily predicting an extra 20,000 unemployed workers in the next financial year. He says 'this is not the time to be complacent'. 

While it seems he might be playing the role of Scrooge at Christmas time, Baird has the right attitude and a lesson for his Federal Liberal colleagues. In the end, peace on earth and goodwill to all men and women will not be a reality for those out of work.


Michael MullinsMichael Mullins is editor of Eureka Street. 

Auto assembly line image by Shutterstock.

Topic tags: Michael Mullins, employment, Joe Hockey, Holden, Toyota, Pope Francis, work, Mike Baird

 

 

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In this article Michael Mullins shows the leftist attachment to big government ever so clearly. The workers who will lose their jobs are NOT the government's workers, nor were they taken for granted by the government. They were employed by a private company. They lost their jobs because the consumers would not buy Holden's products at the prices Holden was asking. Full stop. Consumers were exercising their free choice. The best way to encourage employment is not rely on government as a large employment agency. (How leftists remain attached to the delusion that there is no problem government cannot solve with enough money is beyond me.) It is to allow those with the nous, energy and insight into what the market wants to go to it, and to provide it. They then negotiate with people to supply their services. Many posters here talk of accepting same sex marriage because the majority want it and it's a free choice. Why can I not buy products I want at the price set by the producers? If people value money before love, so what? No government can make greed illegal. Not that hard core leftists will ever be disabused of this fallacy.
marg | 13 December 2013


Two thoughts: 1. I think the focus on "having a job" is off. It's not just having a job that counts: it's creating wealth whether by a job or other means (including, say, being a homemaker or a contemplative monk or nun). Digging holes and filling them in, and being paid for it by the government, is a "job". It's also meaningless, depressing, and undignified, because it's not creating real wealth. So too is making cars that don't sell in open competition, but have to be protected from it by huge tariffs walls, to the detriment of the poor. 2. But that being said, what about this: "Because a government must avoid taking its workers for granted, decisions that have consequences for employment are among the most serious it needs to take." How serious are we talking here? Why is abolishing the minimum wage a no-go area for all the major parties, when it's uncontroversial that minimum wages above market rates price marginal workers out of a job? And what about the state creating a highly regulated and coercive, union-centred wage regime which prevents individuals from negotiating deals with their employer which might enhance their job security? If Pope Francis is right, then abolishing the minimum wage and scrapping our coercive, centralized wage fixing regime should be back on the table. But of course, we're not THAT serious about having a job after all, are we?
HH | 13 December 2013


Thank you Michael. In a similar vein see "A Hong Kong Christmas Carol" at http://oneminuteenglish.com/mp/2013/2013-11-26a-HK-Christmas-carol.htm
John Wotherspoon | 13 December 2013


"If a government kills a car industry by withdrawing subsidies, it must... "

Really? Must a government follow this "Mullins' Law" unconditionally? Is there any limit on the subsidies the government "must" pay the American shareholders of GM? According to Malcolm Maiden (The Age 11/12/13 p.34) "Holden's share [of annual subsidies] amounts to about $50,000 per manufacturing worker". Perhaps some of these workers would prefer to cut out the 'middle-man' of dirty and dangerous shift work and just be paid the $50,000 p.a. directly. Some might choose to employ their new leisure in visiting the sick and elderly, helping the homeless or even tapping out opinion pieces for the internet.
John Vernau | 15 December 2013


Does Michael's article imply that Socialism is the only political system that is compatible with the gospel? I ask this not as a hypothetical question but seeking a genuine response, I am inclined to think the answer is "yes." If so, we Christians better start trying to get the ALP to be a party our consciences can safely lead us to support. At present a significant number of us can't even though we would like to. Perhaps the Greens are in the same boat.
grebo | 16 December 2013


Michael, this is very silly stuff. We cannot and should`t put huge amounts of tax-payer money into jobs that are not needed and not viable in Australia. Indeed that is in fact an indirect insult to the workers involved and the rest of us. But money should be spent on making the country competitive for real jobs and to train us up to be able to do the jobs that will be competitive in advanced countries like Australia in the twenty-first century. You are talking about last-century jobs that will not be done in Australia any more; they should be used to help the world`s really poor become very much less so.
Eugene | 16 December 2013


“A successful nation doesn't need a car industry …” is easy to say. But ignores the need of our physically isolated country to have a sophisticated manufacturing capacity for defence. And stories of two friends here in Melbourne suggest that it is also necessary for the economy. One, who commenced one of those modern high-tech niche companies of the type that free-trade commentators never tire of insisting is ‘the future’, advises that manufacturing their cutting-edge products (they export to the US, Europe, China and the Middle East) depended on expertise from the unfashionable car industry. The other, a component supplier to vehicle manufacturers, has also been developing other products for international export (including to Germany) for years, but depends on the auto industry for bread & butter viability. These companies haven’t depended on the government, but on the car industry. Some of the free-market ideologues who comment above are true to their leader Thatcher’s reported statement that there is no such thing as ‘society’. And are either selective or uninformed. For example, an advocate for medical research, insensitively making a bid for the $400-500 million the government is now expected to save – casually informs that his industry is already receiving some $750 million pa of government funding.
David Moloney | 16 December 2013


Of course Michael is right in stressing government's role in the creation of "jobs for all". In 1861, one-third of the world's total wool production, came from Victoria. By the early twentieth century Australia had the highest living standard (regarding nutrition), of any country in the world. In contrast our levels of industrial production as a percentage of our economy have fallen drastically in the last forty years; I think to around 10% of our total GDP. Ironically it's not true that wages in the Australian motor vehicle industry are a major cause of our lack of competition in international car making, it's productivity. World-wide (and including Australia), wages represent only 5% of production costs. Our Asian competitors, Japan for example, produce cars in half the time that we do. Maybe addressing climate change by Direct Action, and enlisting enlisting thousands of workers into the Australian Green Army (stressing high productivity levels) would be a good way to start redressing our employment shortfall.
Claude Rigney | 16 December 2013


The curse of resource rich nations is complacency and laziness. Australia needs to reject the advice of economists. They have not delivered us policy settings for jobs, let alone good jobs. who have not delivered jobs.

We need modern day Rex Xavier Connors and King O'Malley's to legislate for government ownership either in whole but more often in part, within toll roads, airports, a nationally owned bank once again, and control over all mining. Setting the Australian dollar as low as 75 cents to the US dollar along with spot quotas on imports and mild tariffs midway between McEwen and Keating levels will give us all jobs- full time , permanent and with good pay and conditions of service.
Michael Webb | 19 December 2013


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