How Many Jobs is 23,510, Really?
AbstractIt is commonplace in Australian policy debate for groups presumed to be adversely affected by proposed policies to provide estimates of the undesirable consequences of change. A fashionable form relates to predictions of job losses for the group affected, usually accompanied by counter-claims made by the government of the day or other groups in favour of the policy. A highly public example of the above is the claim by the Minerals Council of Australia (MCA), based on work done in 2009 by Concept Economics (2009) that the then-planned Emissions Trading Scheme (ETS) would result in 23,510 fewer jobs in Australian mining than would otherwise be the case. A major background issue is that most economists would argue that any changes in the relative price of carbon-producing output must also be associated with offsetting increases in employment as a result of the higher level of activity in, for example, alternative energy production, and this is perhaps the critical point in the jobs debate concerning the consequences of policy reform. While we acknowledge this fact, the very large "job loss" figure might be a frighteningly large number for many observers, so we address the question: how many jobs is 23,510, really? Our research reports on findings using three different data series and methods to put into context the supposed jobs loss figure. The paper presents analyses of different data sets aimed at improving the understanding of, and putting into an aggregate economy context, the projected mining sector "job losses" as a result of the 2009 planned ETS. While the focus is on the ETS and mining, the illustrations apply to almost all public and political debate concerning the meaning of job loss projections from anticipated policy reform in an aggregate labour market context. It matters, for example, for the Murray Darling Basin Plan. We recognise that there are some weaknesses with respect to the data and methods used. Even so, a very clear and consistent message has come through. It is that the projected job losses from the ETS, particularly when considered over a 10 year time horizon, are in a statistical sense close to invisible with respect to employment and unemployment stocks, and trivial with respect to aggregate flows in the labour market. Also, it is apparently the case that with respect to mining sector employment the projected losses are a very small proportion of overall inflows to and outflows from mining. Further, it seems to be the case that those leaving mining periods of growth are not then entering a protracted period, and more likely any period at all, of unemployment. Our results should not be taken to mean that economic policy reform is costless to all employees who might be affected by sectoral changes in the labour market, and there remain clear roles for government to minimise the personal costs for those so disadvantaged. As well, the details of this research cannot be translated into precise analyses of the employment effects of the carbon price policy being developed by the current government. But the essential points concerning the size and meaning of mining sector employment effects should not be in dispute; the alleged "jobs losses" aspect of the climate change policy debate is not in any sense important to the overall discourse.
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Bibliographic InfoPaper provided by Crawford School of Public Policy, The Australian National University in its series Crawford School Research Papers with number 1104.
Length: 19 pages
Date of creation: May 2011
Date of revision:
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Web page: https://crawford.anu.edu.au/research/crwf_ssrn/
More information through EDIRC
Mining employment; job flows; carbon pricing policies; unemployment;
Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E27 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-01 (All new papers)
- NEP-ENE-2011-10-01 (Energy Economics)
- NEP-LAB-2011-10-01 (Labour Economics)
- NEP-LMA-2011-10-01 (Labor Markets - Supply, Demand, & Wages)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Borland, Jeff, 1996. "Job Creation and Job Destruction in Manufacturing Industry in Australia," The Economic Record, The Economic Society of Australia, vol. 72(216), pages 46-62, March.
- Natalia Ponomareva & Jeffrey Sheen, 2010. "Cyclical Flows in Australian Labour Markets," The Economic Record, The Economic Society of Australia, vol. 86(s1), pages 35-48, 09.
- Robert Dixon & John Freebairn & Guay Lim, 2005. "An Examination of Net Flows in the Australian Labour Market," Australian Journal of Labour Economics (AJLE), The Centre for Labour Market Research (CLMR), Curtin Business School, vol. 8(1), pages 25-42, March.
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