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Collateral Damage of Australia’s Coal-Fired Power Plant Closures: A Deep Dive into Workers’ Income Loss

by Anna

In 2017, Australia witnessed the closure of one of its dirtiest coal-fired power plants, Hazelwood in Victoria, as part of efforts to reduce greenhouse gas emissions. While this move promised to lower emissions, its impact on the displaced workers was unknown. A recent study conducted for the e61 Institute, along with colleague Lachlan Vass, has delved into tax records to provide systematic insights into the income trajectories of workers in the coal-fired power plant industry following plant closures.

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The research reveals that, on average across all industries, workers who received redundancy payments experienced a significant income reduction of approximately 43% in the year following their job loss. However, employees made redundant in coal-fired power plants fared much worse, experiencing a staggering 69% income reduction, earning just one-third of their previous income.

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The study notes that several factors contribute to the substantial income loss experienced by coal-fired power plant workers. These include job-specific skills that are often not transferable, high wages due to strong union representation, limited opportunities in regions with plant closures, and the relatively older age of many workers in this industry. Employees aged 40 and over, especially those from coal-fired power plants, tend to experience more significant income declines following redundancy.

As Australia prepares for the closure of an additional 18 coal-fired power plants in the coming years to combat global warming, the study raises concerns about the foreseeable and enduring financial hardships faced by these workers. The authors suggest that a national conversation is needed to determine whether targeted support should be provided to the individuals affected by the shift to a net-zero emissions economy. This support may include retraining opportunities and financial assistance for displaced workers to ease the transition and mitigate the adverse economic consequences of government-led decisions.

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