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

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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

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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

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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

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500,000

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SAGE Group Holdings

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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

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7.5

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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