All right for some
How statistics hide the victims of economic reform

I’m generally against statistics, not because of what they tell us, which can sometimes be useful, but because they make it too easy to ignore what is going on in front of our very eyes. It’s tempting to sit in front of a screen in a warm office, look at lines of averages on graphs edging upwards and believe that, for everyone, life is getting better. The big-picture studies so beloved of the managerialists, like those by the National Centre for Social and Economic Modelling (NATSEM), suggest that over the last decade and a half, every section of the population has got wealthier, even if some have got far wealthier than others.

According to NATSEM, the lowest 20% of income earners have seen their standard of living increase by 27.1% since 1985, and even welfare recipients are 11.9% better off (although those who get their income largely from capital saw a rise of 64.8%). It’s abstractions and nationwide averages like this that make us complacent about what’s really happening in the places we don’t really want to know about. So what do non-averaged statistics, ones about places like Doveton, tell us?

Doveton, a suburb in outer south-east Melbourne, was created by the Victorian Housing Commission in 1955 with the specific goal of providing housing for employees of the Big Three factories of GMH, International Harvester and H J Heinz. By its completion in 1966, around 2500 homes had been built. There were certainly plenty of jobs for the families living in them. In 1970 those three factories alone employed the following numbers of people in permanent, full-time jobs: GMH 4500, Heinz 1200, and International Harvester 1750 – a total of 7450. By 1995, this had been reduced to GMH 300, Heinz 350, International Harvester (now the truck manufacturer IVECO) 600, for a total of 1250. In 2015, the totals are GMH (now HSPO) 250, Heinz 0, IVECO 290 – a total of 540. That’s a net loss of 6910 permanent, full-time jobs.

To put it another way, in 1970 there were three jobs in these factories for every Doveton family; by 1995 there was one job for every two families; today there is just one job for every five families. Remember, this is for a community that was created with the specific purpose of housing employees for these three factories. If you take those jobs away but keep the houses there, and if you continue to fill them with the sorts of people who need low-skilled factory jobs, an interesting social experiment begins.

The net result? Consider this: in 1966 the unemployment rate in Doveton was less than 1% (below the national average of just under 2%); by 1991, at the height of the “recession we had to have”, it was 19% (the national average then being around 10%); and in 2015, after no fewer that 23 years of uninterrupted economic growth, it stands at 21.1% (the national average being 6.1%). Twenty years after the factories began closing down, the unemployment rate in Doveton is actually higher than during one of the most destructive recessions since the Great Depression.

During those dark recession years when the economic reform revolution reached its terrible apogee, my father, my mother, my youngest sister and her husband were all made redundant, meaning that four out of eight working adults in my family, all of whom lived in suburbs adjoining Doveton, lost their jobs. (My brother-in-law, who back then was a unionised auto worker, has only once voted Labor since.) And this does not take into account the fact that the definition of “unemployment” has changed, making the comparison even worse. In recent years, other jobs have been created in the warehousing and small-scale manufacturing hinterland to the suburb’s south, but clearly these jobs have not gone to the people of my old suburb. For places like Doveton, the recovery has been a largely jobless one. That is the problem.

The effect of this on the material quality of life of Doveton’s residents has been dramatic. In 1966, 10% were in the lowest income category, by 1991 that had risen to 37%, and in the 2011 Census 34.9% of residents were still classed as “low-income households” – which means they earned less than $600 per week, or roughly the minimum wage of one working parent. According to the Australian Bureau of Statistics’ standard measure of advantage and disadvantage – Socio-Economic Indexes for Areas, or SEIFA – Doveton is now the fourth-most disadvantaged suburb in Victoria.

Perhaps the saddest thing to contemplate is that there are many places like Doveton – many once-affluent public-housing suburbs that were built to support thriving industries, but that have been left behind by the revolution. Doveton itself is probably not even the poorest of them. In Dandenong, immediately next door to Doveton, unemployment is 21.7%. Norlane, a Victorian Housing Commission estate built around the Ford factory in Geelong, has an unemployment rate of 20.7%. Broadmeadows, in Melbourne’s north, another Victorian Housing Commission site, which is highly dependent on the Ford factory in nearby Campbellfield, has an unemployment rate of 25.7%. Elizabeth, in Adelaide’s north, is a South Australian Housing Trust site, developed in large part for workers in the nearby Holden factory, and it now has a frightening unemployment rate of 32.6%. Remember, all these car factories will be gone before the end of 2017, when all Australian car manufacturing will cease, and these unemployment rates, which are already as high as or higher than Doveton’s, will be far higher still. These places are potentially heading towards a social catastrophe.

What we have done in places like Doveton is create a new economic class. It’s true that, for many working-class people, the changes of the past 30 years have been liberating. We’ve coined a name for these people – “aspirationals” – and their success is something to celebrate. Much has been written about this aspirational class, which has many fair-weather champions, so I won’t detail its considerable success here, except to say that there are suburbs full of people like this not far from Doveton, and obviously many individual examples in Doveton itself. But while we lavish attention on the aspirationals’ success, we’ve turned our backs on their former workmates and neighbours who didn’t succeed when the economic rug was pulled out from under them. We didn’t do enough to help them succeed, but we should have.

So who are they? I don’t like the term “underclass”, with its condescending connotations of depravity and crime, and its assumption that the victims are themselves to blame for their misfortune. This is not a law-and-order issue but an economic and social issue. “Housos” is another insulting and degrading epithet – and anyway, this isn’t about housing, it’s about people. Above all, this is an employment issue. So let’s call this class what it really is: the “non-working class”, or perhaps more accurately the “once-working class”. Our economic revolution has created it, and we collectively bear a moral responsibility to remove the “non” or the “once” from its name.

The economic reformers led us to believe – in fact, promised would probably not be too strong a word – that greater productivity, by leading to higher economic growth, would make the existence of this sort of class unlikely: that all boats would float as the tide rose and everyone could aspire to something better. Even they couldn’t have dreamed that their high tide would last for 23 years. But here it is: Australia rich, Doveton and other places like it poor.

A wise person might consider the possibility that the two results might be linked, and that the way we have pursued growth has prevented many people in places like Doveton from sharing in the rewards. In the past, people in these places were shielded from the full winds of the market to help us create a fairer and better society, but now the shield has been ripped away and such places have been exposed to a hurricane. This is more than just a quantitative change in our economy – it is a new economy without a heart or conscience. We used to create wealth by including places like Doveton; now we create wealth by excluding them. And in doing so, could it be that we’ve changed our economy in some fundamental way, without fully realising the import of what we are doing, removing not just the goal of equality from our calculations but removing moral considerations more generally? And could it be that in doing so, we’ve changed ourselves as a people? This is what the aggregated national statistics don’t tell us.

Doveton is the suburb that was murdered. And it is not alone. Its continuing existence is an embarrassment to the economic reformers because it proves that their theories were either wrong or heartless. When the suburb’s factories shut, Doveton suffered a mini depression that, like a runaway steamroller, smashed everything in its path. That steamroller is still on the loose across the land. Other places got the creation, but Doveton and places like it got the destruction.

 

This is an edited extract from An Economy Is Not A Society (Redback) by Dennis Glover

Dennis Glover
Dennis Glover grew up in Doveton before studying at Monash University and King’s College, Cambridge, where he was awarded a PhD in history. He has worked for two decades as an academic, newspaper columnist, political adviser and speechwriter to Labor leaders and senior ministers.

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