Unlucky Australians: Economic reform has failed the once-working classes

August 5, 2015

By Dennis Glover

1 August 2015

Suburbs like Doveton occasionally make the news. It’s usually when some new report comes out telling us that they’re still poor, and still have the same issues of unemployment, substance abuse and high imprisonment rates that they had a generation ago. These reports make us angry, indignant and sometimes determined to try to make a difference to the poor souls trapped within the boundaries of these forgotten postcodes.

But few people know that Doveton, like many other down-at-heel former manufacturing communities, was once highly successful and its people relatively prosperous. You see, our economy once subsidised and nurtured places like Doveton, the way it now subsidises and nurtures property investment, and it’s only when you understand this long forgotten fact that you can really grasp what has gone wrong and what must be done to turn things around again.

Doveton is where I grew up. Located in Melbourne’s outer suburbs, it was created by the Victorian Housing Commission between 1955 and 1966. Its 2500 houses were built for the employees of what were known as ‘the Big Three’ – the factories of GMH, International Harvester and H. J. Heinz.

At their height in the 1970s those three factories alone employed almost 7500 people – three unionised, well-paying jobs for every home. I know this because my father, my mother, my sister and I all once worked in them. We may have been working class, but we were far from poor. Our houses were nice, we drove good cars, our classmates went on to university and entered business and the professions. We were secure, we had upward mobility, we thought of ourselves as average.


Today, after 25 years of uninterrupted economic growth and 30 years of economic reform that we were promised would make us all wealthier, only around 500 of those 7500 jobs remain – just one job for every five families, and unemployment stands at 21.1 per cent.

There are similar stories right across Australia. In Norlane in Geelong, Broadmeadows-Campbellfield in Melbourne’s North and Elizabeth outside Adelaide, factory closures have turned sustained working class prosperity of the type my friends and I enjoyed into lives of endless struggle. Think of it as a mini tornado of recession that knocked out the odd unlucky suburb but left yours standing.

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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 thirty years have been liberating. We’ve coined a name for these people – ‘aspirationals’ – and their success is something to celebrate. 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 economy was pulled out from under them.

So who are these unlucky Australians? I don’t like the term ‘underclass’, with its condescending connotations of depravity and crime. ‘Housos’ is another insulting and degrading epithet best left to comedians. 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 those of us who have benefited from economic change bear a collective moral responsibility to remove the ‘non’ and the ‘once’ from its names.

The economic reformers who began all this change in the 1980s and ’90s 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 so long. But here it is in the year 2015: Australia rich, Doveton and other places like it poor. Why?

A wise person might consider the possibility that the two results might be linked, and that the way we have pursued economic growth has prevented many people in places like Doveton from sharing in the rewards. In fact this is the only serious explanation.

The last 30 years have seen more than just a quantitative change in our economy – they have witnessed the creation of a new economy without a heart or conscience. It wasn’t ‘an economic reform’ but rather ‘an economic revolution’ that the little people lost. We used to create wealth by including places like Doveton; now we create wealth by excluding them. That’s why the Dovetons of Australia are poor: not because its people are lazy or unworthy, or because the unions have let them down in some undefined way, but because we ripped the economy out from under them.

So what can we do to lift such places up?

It’s not as if we don’t occasionally try to help places like Doveton get back on their feet. A battling school has been opened with substantial government and philanthropic support to give its youngsters a chance. Numerous regeneration projects are underway, like the revitalisation now going on in central Dandenong to create local retail activity and jobs. Manufacturing too is returning to the area, although one fears the jobs being created are too high-tech and require far higher qualifications than many of the unemployed in Doveton are ever likely to possess. There’s another problem of course: much of the unskilled work being created is being given to robots, which you can now buy for around $25,000, which is well below the annual minimum wage of $33,326.

Looking at Doveton makes you realise that one day we’re all going to pay for our unwillingness to think through what eliminating millions of low-skilled jobs will do to our society. Places like Doveton already know of course, but when the computers and robots eventually come for middle-class jobs – something already underway – every suburb is going to get a taste of what it feels like to live in my old home town. Think of what a robot lawyer might do to the streets of Fitzroy!

It’s not difficult to reel off a long list of things that might help solve Doveton’s problems if we really cared enough about them, which we don’t. We could, for instance, get the government to subsidise a company to build a big factory and demand that it gives unskilled and semi-skilled jobs to the unemployed people and school leavers from Doveton; spend millions repainting houses, replacing gutters, planting trees and resealing the footpaths to brighten the place up as part of a comprehensive neighbourhood regeneration project; offer young families with jobs incentives to move in and add some energy and affluence to the place; perhaps even bus the teenagers to schools like Melbourne Grammar in return for all the money it got from the Gonski process which Doveton’s own schools were cruelly denied.

The answers could be pretty simple if we could think simply instead of thinking like confused management consultants. If people are jobless, give them jobs; if their houses are eyesores, beautify them and remove the stigma; if new blood is needed, bring it in; if an education will solve their kids’ problems, give them the best education money can buy.

Small steps have been taken in these directions by committed local activists, but perhaps nowhere near enough. Keeping this going will cost, and plenty, but how much have we spent in the last thirty years, through our welfare system and our mental health system and our prison system, paying for failure?

These are the sorts of things we used to do: attract low-skilled jobs and keep people in them. It’s how Doveton was created in the first place, and how it gave me and my friends happy childhoods and a decent start in life, and our parents a standard of living they could get nowhere else. And it’s when we stopped doing these things and put our misplaced faith in the hands of the economic reformers with their philosophy of creative destruction that it all began to fall apart.

But really solving the problems of Doveton and Norlane and Broadmeadows and Elizabeth involves much more than a few discrete policies, no matter how well-designed.

To really help them we have to give them back what we took away: an economy that was willing when necessary to shield the little people from the full winds of the market in the name of a better and fairer society, rather than exposing them to the full hurricane as we have now done.

If we are to give new life to places like Doveton, we must first change the way we think – and this goes especially for the Labor Party, whose heartlands suburbs like Doveton once were. We need to lift our minds beyond the narrowing philosophy of economic reform, with its enervating cult of managerialism and its monomaniacal pursuit of productivity. We need to think wider and deeper, and see things in moral terms once again. We need to build on the affluence of the past, not wipe it out. We need to recapture the imagination that once led us to try to create a country ruled by the idea of decency, and which gave people in places like Doveton things almost impossible to conceive of today: affluence, success, happiness and a job.

Most of all, we need once again to care about places like Doveton – to really care, the way we once did – because if we don’t, nothing will ever change.

So ask yourself: do you care? Really care?