In a post last Thursday in response to the announced Ford plant closures, Mark Beath at Loose Change (Car crash!) wondered whether job losses in Victoria could lead to a revival of interstate migration to Queensland from Victoria, which is currently at low levels (see chart below).
My recollection of the 1991 recession which hit hardest in Victoria, and particularly Geelong, was that it induced interstate migration to Queensland. Could it happen again?
It certainly could, but I think we’d only see the massive interstate movements we saw in the 1990s if there was a downturn in Victoria that drove its unemployment rate 1-2 percentage points above Queensland’s, as occurred in the early 1990s (see chart below). Otherwise I don’t think the relative economic advantage of Queensland over Victoria would be enough to induce large numbers of people to move. Given Victoria has a labour force of around 3 million people, the possible 2,000 to 3,000 job losses associated with the Ford plant closures (and impacts on parts suppliers) would increase the Victorian unemployment rate by no more than 0.1 percentage points. Hence we may not see a revival in interstate migration to Queensland from Victoria just yet. But, as I observed in a post earlier this year (When will interstate migration to Qld recover?), I expect we will see a revival of interstate migration in the medium-term.