Bill Shorten cherrypicking manufacturing job loss figures

Updated

Opposition Leader Bill Shorten has been on the attack about jobs in the manufacturing industry.

In an interview on the ABC's 7.30 program on February 10, Mr Shorten said: "The Abbott Government thinks manufacturing's too hard. They've given up the ghost. They won't fight - do you know there's been a thousand manufacturing jobs lost every month the Abbott Government's been in power?"

Earlier that day, Mr Shorten made a similar claim: "Tony Abbott's only been in power for five months, and we've seen 5,000 manufacturing jobs announced as gone, that is a thousand jobs a month in manufacturing lost under the Abbott Government," he said.

Is Mr Shorten right? Have 1,000 manufacturing jobs been lost - or announced as lost - every month since September last year?

The claim: Bill Shorten says a thousand manufacturing jobs have been lost every month the Abbott Government's been in power.

Bill Shorten says a thousand manufacturing jobs have been lost every month the Abbott Government's been in power. The verdict: Mr Shorten is talking about future job losses, which are not yet reflected in any official data. Moreover, ABS data clearly shows the number of people employed in manufacturing has been declining for decades, including under the former Labor government.



ABC Fact Check investigates.

Official figures

The Labour Force Survey published by the Australian Bureau of Statistics measures the number of people employed in the manufacturing industry on a quarterly basis. The most recent figures, for the three months to November 2013, show 943,700 employees, up from the recent all-time low of 921,400 employees in August 2013. The data for the three months to February 2014 will be published in March.

ABS Labour Force Survey manager Richard Arnett says it is important to note that the survey measures "people not jobs". The difference is that there are a lot more jobs than people employed, because people can have more than one job. But Mr Arnett says the Labour Force Survey is the best available data, and that there would be a close correlation between the two.

The 1,000 a month figure

Fact Check asked Mr Shorten's office for the basis of his claim. A spokesman said the number of manufacturing jobs lost since Mr Abbott had been Prime Minister was "at least that number". He cited a December 2013 announcement by Holden that 2,900 jobs will go when it closes its Port Melbourne plant in 2016 and its Adelaide plant in 2017. He also cited the recent Toyota announcement that 2,500 jobs will go from its Altona plant when it closes in 2017. The spokesman referred to two online news stories about the announcements, one from the Herald Sun and the other from WA Today.

A spokeswoman from Toyota confirmed to Fact Check that "2,500 manufacturing jobs will be impacted" by the decision to close the Altona plant. However, she said: "We are still building cars until the end of 2017 and we do not expect a drop in production as a result of our announcement. As such, we will still need this workforce until the last car rolls off our production line." The spokeswoman said since September last year 160 Toyota workers in manufacturing have left their jobs, via voluntary redundancies.

A spokesman from Holden said the number of manufacturing workers who will lose their jobs as a result of the recent announcement is 1,930, not 2,900. He said the 2,900 figure included some non-manufacturing workers. The spokesman said in manufacturing, 1,700 employees from the Adelaide plant and 230 employees from the Port Melbourne plant will be affected when the closures take place. He said 30 Holden manufacturing workers had left their jobs since September last year, as part of a voluntary separation process.

Other manufacturing job loss announcements

In federal parliament on February 11, Mr Shorten also referred to job losses at other companies, including manufacturers Electrolux, Simplot, Caterpillar and Rio Tinto subsidiary Alcan.

On October 24, Simplot Australia announced an estimated 110 permanent employees would "gradually" go from its Bathurst vegetable processing plant as some work is transferred to other factories. A spokeswoman said no jobs had been lost since September.

On November 5, mining equipment manufacturer Caterpillar announced it would cut up to 200 jobs from its Burnie plant in Tasmania.

On November 14, Electrolux announced it would close its refrigeration plant at Orange in 2016, resulting in the loss of 544 manufacturing jobs.

On November 29, Rio Tinto announced it would suspend production at Alcan's Gove alumina refinery in the Northern Territory, resulting in the loss of more than 1,100 jobs by mid-2014.

In addition, on February 18, aluminium producer Alcoa announced 980 manufacturing jobs would go when it closes its Point Henry aluminium smelter and two rolling mills by the end of 2014.

The above announcements, made since the election of the Abbott Government, relate to the future of more than 5,000 manufacturing jobs.

When the jobs are going

Mr Shorten says 1,000 manufacturing jobs have been lost every month since Mr Abbott has been in power. There is no official data to support this claim, as figures for most of the period have not been published. In any case, many of the workers Mr Shorten is referring to will not officially leave their jobs for at least another year.

The Australian Manufacturing Workers' Union says the job loss announcements should still be counted as job losses. "I would... challenge any person to tell these workers that their job loss 'isn't yet real'. You only need to visit Toyota to feel that these job losses are real and the effect is immediate," national secretary Paul Bastian told Fact Check. "It is a certainty these jobs are gone, even if they have a short period of time left to serve out."

But Professor Phil Lewis, director of the Centre for Labour Market Research at the University of Canberra, says Mr Shorten's claim is "absolute nonsense".

"In any year hundreds and thousands of jobs are lost and created," he said. "You can't count these announced job losses as current job losses. The only jobs you can count as jobs lost are people who were in employment and are no longer in employment. You can't start counting people losing jobs in future. Imagine if in the next year all of these people get another job, then there would be no job loss."

In terms of ABS statistics we don't yet know what jobs have been lost in that time period. Associate Professor John Spoehr

Associate Professor John Spoehr, executive director of the Australian Workplace Innovation and Social Research Centre at the University of Adelaide, says "there have been considerable manufacturing job loss announcements in Australia within a relatively small timeframe". He says he expects future ABS data to show an accelerated decline.

Associate Professor Spoehr was less harsh on Mr Shorten's claim than Professor Lewis, but still says it needs clarification.

"In terms of ABS statistics we don't yet know what jobs have been lost in that time period. As a statement about announced jobs Bill Shorten is correct, but it should not be considered as actual jobs lost over those months. Many will be lost between 2015 and 2017. Some of them will show up in the ABS figures down the track, but not yet," he said.

The manufacturing industry's decline

The Australian Industry Group, an industry association which represents a range of sectors including manufacturing, provided Fact Check with the chart below.

AIG chief economist Julie Toth says it shows that between February 2008 and August 2013, manufacturing lost around 141,400 employees, or 13 per cent of its 2008 workforce. "This is a larger loss of employment - in absolute number terms and in percentage terms - than the last big drop in manufacturing employment in the 1990s," she said.

Ms Toth says the slight increase in manufacturing employment from August 2013 to November 2013 indicates "stabilisation at best".

Ms Toth says the decline since 2008 can partly be explained by the global financial crisis, when global trade was significantly disrupted and business investment froze.

"The slow recovery in global trade and the restructuring in global growth patterns since the GFC is part of the reason for ongoing malaise in manufacturing since then, coupled with many other factors," she said.

Jobs in manufacturing have been declining for decades. Professor Phil Lewis

Professor Lewis says the recent announcements cannot be blamed on the Abbott Government.

"Jobs in manufacturing have been declining for decades now," he said. "These announcements are not going to be due to Tony Abbott. There may be specific things you can point to, like his lack of support for Toyota, but the main reason employers go out of business is not because of something Tony Abbott's done in the last five months, it's part of a long-term downward trend in manufacturing and a short-term problem for manufacturers having to compete given the high Australian dollar. Long-run problems have been exacerbated by the rise in our exchange rate."

The chart clearly shows the number of people employed in the manufacturing industry in Australia has been in decline for years, well before the current Government was elected. In fact, based on ABS quarterly data from December 2007 to August 2013 when Labor was in government, an average of 1,874 fewer people were employed in the manufacturing industry each month.

Economic advisory panel This piece was reviewed by two members of Fact Check's economic advisory panel, Dr Chris Caton and Chris Richardson.

Meet the panel here.

A spokesman for Employment Minister Eric Abetz says "whilst we don't necessarily agree with Mr Shorten's statement, recent job losses are concerning and we are doing everything possible to create jobs".

"According to the ABS Labour Force Survey, from November 2007 to August 2013, employment in manufacturing fell by 127,600 or by 12.1 per cent, in trend terms, the largest fall of any of the 19 broad industries. Over the same period, total employment grew by 946,200 or by 8.8 per cent," he said.

Ms Toth also provided Fact Check with this table, based on the ABS data for November 2013, which shows how manufacturing is comparing to other industries.

In an August 2013 statement commissioned by then Labor ministers, the federal Treasury forecast that overall unemployment in Australia would rise from 5.8 per cent at that time to 6.25 per cent by June 2014.

The verdict

The Abbott Government has been in power for five months - from September, when it was sworn in, to February. Since then, there have been a series of job loss announcements in the manufacturing industry.

However, these are future job losses, which are not yet reflected in official ABS employment data.

Job losses in the manufacturing industry are also part of a wider trend. ABS data clearly shows that employment in the industry has been declining for decades, including under the former Labor government.

Mr Shorten's claim is cherrypicking.

Sources

Topics: work, business-economics-and-finance, bill-shorten, alp, manufacturing, industry, australia

First posted