Australian manufacturing was once guarded by protectionist tariffs that ensured imported goods were so expensive that locally produced goods could easily compete on price.
In 1970, more than 25 per cent of all Australian jobs were in manufacturing. As tariff barriers were rolled back, more international competition entered the nation. By 1984 only 16.7 per cent of the workforce was employed in factories.
Today a measly 6.3 per cent of Aussies work in manufacturing.
This story of a declining manufacturing sector doesn’t surprise you, but it’s not the full story.
While the share of workers employed in manufacturing plummeted and the sector lost its prominent cultural position as the backbone of the Australian middle-class, the total job losses weren’t anywhere near as dramatic.
Sure, 188,000 manufacturing jobs were lost since 1984 (going from 1.1 million to 911,000 workers). These are not just numbers but real people who lost treasured jobs.
That said, employment in the sector only declined by 17 per cent since 1984 which is much less spectacular than the relative drop in importance (16.7 per cent down to 6.3 per cent of all jobs) would suggest.
Even that type of loss might be an over-count of sorts. Let’s not get too technical here but some of the lost manufacturing jobs weren’t actually lost.
They simply migrated out of the manufacturing category into warehousing and logistics. Manufacturers outsourced these functions as their supply chains began to operate under the just-in-time model to minimise warehousing costs.
So far, we’ve looked at employment figures. Now let’s explore the economic side of things and look at two indicators that aren’t........