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Structural Adjustment:Definitions, Opportunities and Lessons
Professor Andrew BeerCentre for Housing, Urban and Regional
PlanningUniversity of Adelaide
What Do We Know, What Don’t We Know?
• Structural adjustment in the Illawarra• A Tale of Two Cities
– Personal and regional adjustment • The Riverland Experience • Lessons to be Learned
The Illawarra
Two Cities: Birmingham and Adelaide
• MMAL Lonsdale April 2004, MG Rover May 2005• Adelaide
– Structural Adjustment Fund for SA (SAFSA)– Redundancy payments from MMAL – Worker assistance via JobsNetwork
• Birmingham – Minimal redundancy payments – Range of government actions via MG Rover Taskforce & Advantage West Midlands
Site of MG Rover, mid 2008
0
5
10
15
20
25
30
35
40
Sel
fE
mpl
oyed
Em
ploy
edF
ull T
ime
Em
ploy
edP
art
Tim
e
Em
ploy
edC
asua
lly
Wor
king
With
out
Pay
Une
mpl
oyed
Ret
ired
Oth
erw
ise
Not
in L
abou
rF
orce
Employment Status
Per
Cen
t
Wave 3
Wave 2
Labour Market Status, Southern Adelaide, Wave 2 and Wave 3
Labour Market Outcomes:
Change in Income Since Leaving Mitsubishi
0
10
20
30
40
50
60
70
80
less than you earned atMitsubishi
the same as you earned atMitsubishi
more than you earned atMitsubishi
Per Cent
Wave 3
Wave 2
Labour Market Outcomes
Industry of Most Recent Job, Wave 2
0
5
10
15
20
25
30
35
40
Agriculture
Mining
Manufacturing
Electricity and
Water S
upply
Construction
Wholesale and
Retail T
rade
Accom
modation,
Cafes &
Rest
Transport and
Storage
Construction
Finance andInsurance
Governm
ent Adm
in&
Defence
Health, E
d. &C
omm
unityS
ervices
Personal S
ervices
AusComposites
Redarc Electronics
Alloy Technologies
Cubic Pacific
Ingham's Enterprises
Fibrelogic Pty LtdResource Co.
PBR Australia
ScreenCheck Aust.
True Life Creations
Origin Energy Solar Pty Ltd
Jumbo Vision InternationalIntercast & Forge
Inpak Foods
Seeley International
BD Farms Paris Creek
Normanville Export Meatworks
Peats Soil & Garden Supp.(Willunga)
Peats Soil and Garden Supp.(Dublin)
Gulf
St. Vincent
GulfSt. Vincent
0 5 10 Km
"
500,000
1,000,000
2,000,000
4,000,000
6,000,000
Dollars (AU)
Suburb
0 50 Km
SAGE Group Holdings
®
Datum: GDA94Projection: Lambert Conformal ConicData Source: School of Geography, Flinders University 2007.Australian Bureau of Statistics 2007.
Created by Nicole MahoneyDate: 26th July 2007.
0 4 8 12 162Kilometres
Legend
Number of Workers
1
2.5
5
7.5
10
25
50
75
Local Government Area
Lonsdale
Dealing with Labour Market Immobility: West Midlands
Riverland Futures Taskforce
• Riverland Futures Taskforce – $20m structural adjustment fund established by SA Government (Riverland Sustainable Futures Fund)
• Now administered through RDA Committee
– Limited take up, slow take up • And does it address the region’s fundamental needs in an era of capital mobility?
Opportunities and Lessons
• Labour market adjustment – Haynes notes labour assistance packages more effective in buoyant economic conditions
– Redundancy payments can have perverse (?) impacts
– Labour mobility is a critical issue – the Oswald thesis
– Acquisition of formal qualifications key
Opportunities and Lessons
• Structural adjustment – Packages tied to the region where it impact is felt, limit the
spillover – Tension between supporting industries that will grow and
the industries workers will move to– Time frame
• Bailey et al note the importance of slowing the adjustment process
– Significant action in advance of Rover collapse in Birmingham, on-going company support in SA
• Public sector leadership in planning for and managing adjustment