Today Qantas announced that 500 of it's heavy maintenance technicians will go from it's Melbourne Heavy maintenance facility.http://www.news.com.au/business/companies/qantas-axes-500-heavy-maintenance-jobs/story-fnda1bsz-1226362229977 Naturally, the relevant unions protested saying that Australia would be losing vital skills essential to it's natural security and so on. Moving beyond the merits of arguments both parties this decision is an excellent example of broader changes in western economies that have led to greater inequity.
For most of the post-war period getting a job at a unionised company like Qantas was hitting the jackpot for working class young men. Getting into such roles usually required both luck and nepotism. However, the workers who worked for such companies were a sort of aristocracy of the working class. Well trained and highly skilled by the standard of high school leavers such workers and the public servants were an income class between the common labourer and the university education professional.
Economists have long known that a major predictor of income is a 'college degree'. The difference in income between people who have a university education and a high school education is called the college premium. Despite the fact that the percent of the population with a university education has been rising this premium has been increasing. http://gregmankiw.blogspot.com.au/2007/04/college-premium.html
The high paid blue collar worker has been hit over the last 30 years with a triple whammy of microeconomic deregulation opening up competition in industries wiping out economic rents that paid for high wages, global trade that lead to outsourcing of many industries and technological change. Qantas and it's workers has been victim to all three of these changes, this time the culprit is technological change.
As Qantas retires many of its older jets it is replacing them with newer models that require far less heavy maintenance. According to one report on ABC radio many of the components are plug and play, indicating that the level of skill need for this maintenance is decreased and requires less labour hours. However, the design and development of these new components requires a class of high educated engineers with skills that are expensive to obtain. So while the demand for mechanical technicians decreases the demand for university educated engineers has likely increased. The outcome at Qantas and companies throughout the world has been, hundreds of well paid workers roles have been made redundant and replaced with a few extremely well paid university educated professional.
As roles such as the technician roles at Qantas disappear they are replaced with less secure, less well paid roles in the service sector. Australian's mining boom and housing boom in the 2000s has shielded many blue collar workers from the worst of a trend that has occurred throughout the western world but the question remains for how long?
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