STUART KENNEDY
June 21, 2017

Manufacturing is not lost: Carr

Industry 4.0

Manufacturing is not lost: Carr

Kim Carr: Automation does not spell the end of manufacturing. Ask the Europeans

Veteran Labor industry spokesman Kim Carr went full polemic on the advantages of Australia retaining its manufacturing capability in a speech this week, hitting out at the free market commentariat and warning of the advent of hi-tech sweatshops.

Senator Carr, who is Federal Labor’s Shadow Minister for Innovation, Industry, Science and Research, was addressing the National Manufacturing Summit at Parliament House in Canberra.

“It is my contention that without a strong manufacturing sector we cannot be a prosperous, egalitarian, culturally diverse and technologically advanced society,” he said.

The Victorian senator has seen swathes of manufacturing jobs lost throughout his state such as Ford's closure of its Broadmeadows and Geelong plants. In October Toyota will close its Altona vehicle plant in Melbourne’s west with more than 2,500 jobs expected to go.

In most western countries like Australia and the US, manufacturing became heavily unionised in the 20th century, and workers could extract relatively good pay and conditions during the post WW2 boom times.

With much of its funding coming from unions, the Labor side of politics became a natural promoter of manufacturing and supportive industry policy.

The other side of politics was more grudging about policies it saw as corporate welfare culminating in former Prime Minister Tony Abbott rejecting pleas for further assistance from the multinational car makers, and the subsequent exit of their local car plants from Australia.

At the time, many free market enthusiasts, especially in the Murdoch press, cheered Mr Abbott’s decision and Senator Carr took a shot at the roster of right wing commentators.

“Too often media commentary about manufacturing is negative,” he said.

“It is portrayed, sometimes gleefully, as a sector in inevitable decline. That is partly a matter of ideology.

“The commentators of whom I speak are enthusiasts for the free market.

“They don’t like manufacturing because they reject the role government plays in the sector through innovation programs and co-investment measures,” Senator Carr said.

Senator Carr took umbrage over the often-repeated claim that 40 per cent of manufacturing jobs would be gone by 2030.

This was a figure that went viral after a paper published in 2013 by Oxford University researchers Carl Frey and Michael Osborne said about 47 percent of jobs were at risk because of computerisation.

“But citing a bald figure, whether 40 per cent, 47 per cent or 50 per cent, can be seriously misleading,” he said.

He notes MIT economics professor David Autor’s argument that while automation may reduce the number of jobs per unit of output produced, it does not necessarily reduce the total number of jobs.

Autor sees robotics and digitisation taking over codified, repetitive work and increasing the value of human input.

“Tasks involving problem-solving, adaptability and creativity,” said Senator Carr.

There is some evidence Autor could be right, with the Centre of European Economic Research reporting that between 1999 and 2010 technology taking over routine work led to a rise in labour demand across the 27 EU economies of almost two million jobs.

The EU is somewhat bullish on more manufacturing and has set a 2020 target of lifting economic value coming from manufacturing by 25 per cent on present levels, while the Germans believe there can be a six per cent increase in manufacturing jobs over the next decade.

Senator Carr sounded a warning that as reforms initiated by the labour movement were undone and job security evaporated under increased casualisation, we could be headed back to the 19th century world of sweatshops.

He described people dependant on precarious casual employment as a new class of worker known as the ‘precariat.’

“In this precarious, increasingly unequal world, there is a danger that the liberating potential of new technology may give way to new forms of servitude.

“The sweatshop has returned, in hi-tech form.”

While the lash may have disappeared as a productivity enhancer, Senator Carr cautioned about onerous technology being used to oversee and coerce workers.

“Electronic wrist tags allow supervisors to track the speed at which the workers move stock, and indeed their every move, including toilet breaks.

“This is a destruction of human dignity and personal autonomy.

“It is the kind of workplace created when the stripping away of legal protections for workers’ rights comes up against the possibilities of the new era of automation.

“The era which has variously been called “internet of things” or “industry 4.0”

While Senator Carr’s hi-tech sweatshops may be the future, there have been some glimmers of hope locally that unions and the gig economy can get on.

Earlier this year labour market platform Airtasker and Unions NSW agreed on a range of workplace measures such as introducing an independent disputes resolution process overseen by the Fair Work Commission.

Airtasker workers will also be offered an insurance product that mimics workers' compensation to give cover for workplace injuries and illness.

While Senator Carr’s called for an expansion of investment in Australia’s advance manufacturing base his speech was more headland than prescriptive. Labor is in policy brewing mode this year and unlikely to commit to much until we are much closer to the next election.

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