Inequality and unemployment ‘a choice’ governments make, says jobs dept boss


As technology changes the economy, it’s up to government to ensure life doesn’t get worse for the already disadvantaged, argues Richard Bolt.

In this era of automation and declining manufacturing, many worry that a large chunk of the working population will be left jobless.

It’s often presented as regrettable but unavoidable — the cost of progress.

But inequality and structural unemployment only occur if the government allows them to happen, the head of Victoria’s jobs department has warned.

While changes in the economy offer many upsides for consumers and those in the professional class, “equally however it offers that possibility of people being left behind,” argues Richard Bolt, secretary of the Department of Economic Development, Jobs, Transport and Resources.

“And as an adviser to a government I can see increasingly that the people who lose are so frequently very different from the people who win.

“There are people towards the end of their career, people with low education levels, people living in the wrong place, there are people in Broadmeadows, where the unemployment rate is 24% … those concentrations of disadvantage are being magnified not just by technology, they’re being magnified by global trade,” he said.

Technology itself is not inherently good or bad, Bolt thinks. It depends on what we choose to do with it.

“We have to ensure that technology is not just seen as a destiny that will drive us,” he argued at last week’s Creative Innovation conference in Melbourne.

“Government, in its role as a regulator, as a service provider and as an employer — that’s a very important element of it — and indeed as a taxer, has to ask itself what kind of preconditions it will set for technology to meet the public good, and for the private good to serve the public good.”

Some companies, such as Australia Post, are making a conscious effort to avoid laying off employees where possible, despite a changing market, Bolt noted.

“I think that is a challenge for business as well — [prioritising] returns to capital really after returns to community and returns to social capital.

“I say that because there is no organisation of the complexity of my own — or indeed or Australia Post, or the energy companies or anyone — nowadays that can really honestly say that those who get the largest share of the spoils of the wealth that is created are necessarily so closely driving the creation of that wealth. This is a product of all of us.

“And I think there is a growing sentiment worldwide that those uneven returns between the haves and the have-nots need to compress. That society needs to be focused on these returns being to society, and less to the individual, and less to the privileged class.”

Efficiency gains can be made ethically

He hoped that while increasing the use of technology in things like back office processes was necessary and brought benefits, organisations should “no longer see those affected negatively as expendable.”

“The implementation of technology is the business of everyone. It’s got to be humane, it’s got to be supportive. It’s best done, rather than resisted, but it’s best done in a way that meets the social [needs].

“And that’s a choice, that’s a policy, and that’s a way we conduct ourselves. It’s not some inevitable thing about technology .”

One of the key ways governments can tackle the problem is by investing in human capital, Bolt said. Teachers should be paid better, we need more of them and they should be afforded a social status that reflects their importance in helping prepare the next generation for work, he argues.

Governments also need to develop their role providing the “newest type of public private partnership” — support after businesses go bust. This has now become core business for Bolt’s own department, with government and business teaming up to help young people improve their employability and allow older people to stay in the workforce for longer.

Flexibility is important in making government-business collaboration work, he added.

“Taking that perspective between government and business — where businesses can afford to, not all can — that this is a joint project. This is something we will do in our own way, rather than it being some highly prescribed and formulaic set of obligations.

“Take the objective and work out what it means for you. Form the partnerships, form the plans, innovate, keep getting new products and services — whether it’s carbon fibre or advanced manufacturing.

“But also think about that other side of life, so that your workforce and indeed your customer base are taken on a journey in a way they can benefit from. … It has to become a mindset.”

  • Marcus L’Estrange

    If you use the REAL unemployment figures (21% unemloyed & underemloyed) you would come to a totally different article and solutions to that published above.