Huge wages paid by the coal industry are making it harder for other Hunter businesses to survive.
Federal Labor MP Joel Fitzgibbon and new state Labor MP Clayton Barr have both spoken out about the situation, which Mr Barr described recently in state parliament as ‘‘bordering on unsustainable’’.
Employers say they are lifting their wage levels as much as possible but the coalmines are paying $100,000 to $130,000 to entrance-level workers who were previously earning $50,000 or less in their old jobs.
Hunter Valley Research Foundation principal research fellow Simon Deeming said last week that while the Hunter’s unemployment rate had eased from last year’s record low levels, a similar shortage of skilled workers remained.
Mr Deeming said the rise in the unemployment rate could be directly linked to the rise in official interest rates.
‘‘The Reserve Bank moved to take some of the heat out of the economy [and] that’s the practical result – that employment comes back a bit,’’ Mr Deeming said.
‘‘Last year we were incredibly strong, we were too strong, in terms of employment growth. The Hunter region topped out at 330,000 workers.
After the global financial crisis there was a surge of about 40,000 jobs but we have come back down to about 317,000 now.’’
Mr Deeming said the two-speed economy was clearly evident in the Hunter.
‘‘We are the closest regional benchmark, our employment is closer to the national average than any other region because we have that mixture of higher order services, mining and other industrial as well as rural and agricultural,’’ Mr Deeming said.
Member for Hunter Joel Fitzgibbon described the chronic labour shortage as the ‘‘biggest issue facing the region in the next decade’’.
‘‘As we get more labour and skills being sucked into the mining sector, it is going to cause real problems in the local economy as a whole,’’ he said.
High youth unemployment in such areas as Cessnock and Great Lakes could be used to the region’s advantage.
‘‘Youth unemployment is still very high in some areas and employers can’t get unskilled labour,’’ Mr Fitzgibbon said.
‘‘We need to get these people who are lying idle trained up and into the workforce.’’
Singleton Chamber of Commerce and Industry president John Abrams said near full employment in the region had pushed prices for goods and services to a premium and given employees greater bargaining power in terms of salaries and incentive packages.
‘‘This then has a flow-on effect to the smaller business that cannot afford to pay the higher wages,’’ he said.
However, Mr Abrams said there were also plenty of positives with many business opportunities being created in the region.
‘‘We need to diversify our industry base with increases in the manufacturing and service industries.’’
Singleton Mayor Sue Moore said it was almost an ‘‘everyday occurrence’’ for businesses to train staff only to lose them within weeks or months.
‘‘If you are in an industry that is not associated with the mines, it can be very tough going and disheartening when it happens time and time again, it’s a very big challenge,’’ Cr Moore said.
Muswellbrook mayor Martin Rush said real unemployment in Muswellbrook was probably as low as 1per cent and mining continued to soak up almost all of the available workforce.
Cr Rush, an industrial barrister, said the financial benefits to the region of coalmining tended to be overstated because the ‘‘input-output’’ modelling that they used to calculate their wealth creation did not take the limited workforce into account.
He said Muswellbrook had the highest proportion of public housing tenants in the Hunter Valley on one hand and the biggest rises in property prices on the other.
‘‘Economic assessment impacts have historically measured impact by job creation,’’ Cr Rush said
‘‘Those figures have disguised the underlying deterioration in wellbeing.’’
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