When the pandemic hit, our local economies collapsed. In my own Victorian neighbourhood of Brunswick East, hundreds of hospitality and retail businesses have shut their doors, thousands of workers have been thrown out of work, and everyone in our community has had their livelihoods affected. While this in itself is a tragedy, it’s important to remember the coronavirus didn’t create the crisis; it just exposed the cracks in our economy.
The latest forecasting suggests that overall employment will top out at 10%, and won't reach pre-crisis levels until 2023, but the bitter reality for many in our society is that the pre-crisis levels of employment weren’t providing for secure lives. Precarity is the defining experience of work for an entire generation of Australians. Far too many of us have never known a life without insecure work, wage theft and underemployment. We were promised that if we went to university, our employment opportunities would improve - they didn’t. We were promised that if we worked hard, it would all pay off - it hasn’t.
We need a plan to greatly increase economic activity coming out of the lockdown, but we need to do more than that. We need to make sure that we are not just creating more jobs, but we’re creating work that is secure, safe and sustainable. We need good quality, meaningful work that increases community wealth, and some exciting international evidence show that local governments can plan a key role in building an economy that works for all of us.
Community wealth building is a strategic agenda that aims to use the existing levers of local government to reprioritise local economic development and reverse the flow of money going outside of local economies. Its aims are keeping the money spent in local communities in the local economy, and maximises community benefit. Rather than advocating for a simple increase in government spending, the community wealth building model advocates for coordinating the spending activities of local governments and so-called ‘anchor institutions’ to prioritise local procurement, developing local supply chains and encouraging democratic ownership.
By coordinating and utilising the purchasing power of these anchor institutions, which are any large enterprises that are unlikely to leave communities (examples include hospitals, community health centres, public service providers or educational institutions), local governments can work to maximise the procurement of local content, as well as leveraging locally owned land or fixed assets to be mobilised towards community needs.
Under this model, the economy is seen as a complex ecosystem, which seeks to maintain circular flows of investment rather than traditional extractive model of economic development which sees local economies fund external shareholders.
While municipal governments around the world, from North Ayrshire in Scotland to New York City in the United States, are investigating the benefits of this model, the city of Preston in England has led the way in embracing this new approach to economic development.
By applying the learnings from these diverse examples, there are four key steps that we can take to make sure that we’re building a local economy that works for everyone in municipalities like Moreland City Council, where I am proud to be standing as a progressive Labor candidate.
First, we can make sure that local government is a leader in secure employment. For most LGAs around Australia, local government is one of the largest employers in the area, and Labor councillors should seek to use that economic advantage to create a virtuous cycle of employment in our community. That requires us as Labor councillors to oppose any and all future outsourcing of essential community services, and engage with council workers and their union to ensure that we are implementing best practice employment contracts, consultative process and wages.
Second, we can use the purchasing power of local government, and prioritise hiring locally, buying locally and procuring locally. We should be looking to maximise local content requirements, and the use of local firms and services to address council’s material needs. This should also include mandatory ratios for local content and entry level jobs in the downstream supply chain, to ensure that young workers, recently arrived migrants and other new entrants to the labour market can get local jobs that they can count on.
Third, we can use local government’s ability to develop local infrastructure to encourage activity. Working with traders and local businesses we can identify opportunities to value add to their trade, through building footpaths, common areas, parking garages, green spaces and other facilities that encourage incoming consumers to spend more time and money in the area. We can set up social infrastructure as well, such as business mentoring, networking and support groups to encourage local knowledge sharing and coordinated marketing strategies to maximise community benefit.
Finally, we should play a coordinating role in bringing together the other large employers and so-called “anchor institutions”, which are the larger businesses and organisations that are unlikely to leave the area, like Merri Community Health, John Fawkner and Brunswick Private hospital, Brunswick IGA, and community childcare centres like Moreland Community Childcare centres for example, working with them to identify common needs, and common areas of spending and procurement. Most importantly, we should prioritise support for the establishment and development of local worker cooperatives to fill the gaps we identify in these local supply chains, and offer grants and additional support through specialised initiatives (like the Brunswick Business Incubator here in Moreland) that are dedicated to building democratically owned enterprises within our local communities. If we start to see our local economy not as a spreadsheet, but as an interconnected ecology where local government is able to play a positive role in directly stimulating economic growth we can actively build fairer, more prosperous and resilient local economies.
We don’t need to ‘snap back’ - we need to move forwards. We need to redesign local governments as active players in local economies, not just passive participants, and that will only happen with when Labor councillors work together.
Shirley Jackson is the Senior Economist at Per Capita and the progressive Labor candidate for Moreland South Ward in the upcoming Victorian council elections.