Workers who lose their jobs when coal-fired power stations shut down face a massive pay cut when they find alternative employment, highlighting the impact the clean energy transition may have on many regional communities.
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A study of the experiences of workers at power stations that have closed in the past decade found their earnings fell almost 70 per cent in the year after they were made redundant and were still 51 per cent lower after four years. The e61 Institute used de-identified tax data to look at what happens to workers when coal-fired power stations shut between 2010 and 2020 and see how their earnings evolve.
It found that pay losses were far greater than those experienced by workers made redundant in other industries, and were particularly large for those in low-skilled occupations at power plants. Research director at e61 Institute Dan Andrews said the findings underlined the need for governments to pay significant attention to how power plant closures are managed as part of the shift to renewable energy.
Seven coal-fired power plants are due to close in the coming decade and 11 more are slated for closure between 2034 and 2051. These include three in the Hunter - Eraring, Vales Point and Bayswater, in addition to last year's closure of Liddell.
Mr Andrews said while the number of workers directly affected was "very small" in the context of the national labour market, power plants were often major employers in the communities in which they were situated.
Mr Andrews said many of these communities were in marginal seats, making the impact of what happens there "politically salient".
"[The transition] is costly for those workers. They are losing their jobs because of government action and they are bearing the cost. It is classic political economy - the benefits are diffuse but the costs are concentrated," he said.
He warned that if the transition was not managed well, it could undermine public support for climate change policies.
University of NSW Business School economist Richard Holden said the experience of globalisation, in which the costs of change were concentrated and many of the benefits poorly shared, should be cautionary.
"We did a really lousy job of compensating those who lost from globalisation," Professor Holden said. "We thought that it didn't matter."
Hunter Jobs Alliance coordinator Justin Page, formerly of the Electrical Trades Union, said there were at least a couple of hundred workers at each of the Hunter power stations who would be directly impacted.
Mr Page highlighted the fact, borne out in the study, that power stations are typically regionally based, not in major cities where it's easier to transition workers. Further, it was clear that lower-skilled workers were more at risk, given the growing demand for higher skilled workers such as electricians, according to the latest skills Priority List report from Jobs and Skills Australia (formerly the National Skills Commission) released this month.
"We need proper transition authorities to look at these aspects," Mr Page said. "Governments at a federal and a state level both have committed to authorities, but to date there's been no proper funding to set them up."
So far there had been enough funding for one employee, a car and a laptop per authority, he said.
"You look at the Hunter, and we're attracting investment in clean energy, with offshore wind, ammonia, hydrogen, those types of things, and it's imperative that government gets the right policies and framework settings in place so we can ensure local jobs, local supply chains, apprenticeships, and community benefits," Mr Page said.
