Comment

Penalty rates are part of the Australian values of giving workers a fair go

Employers' arguments that compensating workers for unsociable hours is a brake on the economy don't hold water.

As you open your Easter eggs this Sunday, spare a thought for the thousands of people missing out on spending that valuable time with friends and family because they are working.

Penalty rates have been a part of Australia's social and economic fabric for more than 100 years. As a nation, we've said that working outside regular hours, employers must compensate workers for unsociable hours. 

Public holidays like Easter are when we forge our shared sense of community and strengthen our relationships with friends, family and neighbours. The majority of workers who regularly receive penalty rates are financially reliant on them. They have a household income of $60,000 or less. The people who would be most impacted by reducing or scrapping penalty rates are the least paid in our community.

The business lobby has recently ramped up an unprecedented campaign calling for the scrapping or reduction of penalty rates and weekend rates. The hospitality industry has claimed that paying penalty rates over Easter will "cripple" businesses and that "it's going to cost jobs".

In the real world, this is nonsense. The case made by the business lobby to reduce penalty rates is based on anecdotes rather than facts and evidence.

Despite all the technological change, the arrival of the internet and globalisation, most work today is still done during regular hours of 9am to 5pm Monday to Friday. About 62 per cent of the workforce does not work on the weekend or evenings, and that number has been steady since the 1990s. 

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As a community, we still look at weekends, Sundays and public holidays like Easter as important days of rest. Church attendance may be declining, but most Australians consider Sundays and public holidays as essential to rest, relax and spend time with loved ones before the work week begins.

It is simply voodoo economics for the retail and hospitality industry and Liberal politicians to claim that paying penalty rates costs jobs. The reverse is true: if wages are cut, then consumer demand falls. If you increase wages, then consumer demand also increases as workers have more disposable income to spend. 

Even neo-classical economists of the type favoured by conservative business interests agree that aggregate demand drives job growth, not wages. The OECD, hardly a bastion of left-wing radicalism, has said that "the level of minimum wage has no significant direct impact on unemployment". Business needs to move beyond anecdote. 

Business lobby leaders like Kate Carnell from ACCI love to use examples of hotels or bookshops not opening on Sundays as reasons to slash penalty rates. If a shop not opening is a reason to cut penalty rates then, by that logic, all the shops, cafes and restaurants that are open on Sunday are a reason to keep penalty rates as they are.

Another unfounded assertion that business groups make to oppose penalty rates is youth unemployment. If only, they say, we could pay young people less money, then we could employ more young people. This just doesn't stack up.

In the retail and hospitality industry, employers can already access youth rates and pay a school-leaver about half the adult minimum wage.

Yet in Canberra, cafes and retail stores prefer to employ older university students on higher wages than younger people on youth rates. Clearly wages and penalty rates is not the barrier to employing young people. 

Business lobbyists, like Peter Strong from the small business association, also use anecdotal examples of employees who say they "want" to work on weekends or for lower rates of pay. Yet countless inquiries, cases and reports have proven that workers, especially from disadvantaged or vulnerable backgrounds, are routinely pressured into working unsociable hours. 

Even when there is no other pressure, the presence of penalty rates is often the primary motivator for someone wanting to work on a Sunday or public holiday.

While business groups use Easter to run a scare campaign about penalty rates, they are ignoring their members' genuine concerns. 

The most recent ACCI small business survey showed that wages and penalty rates rated 10th out of 10 on the list of concerns. Investment in plant and equipment, insufficient demand, rent, access to finance and import competition rated most important.

The most recent survey by the small business council found similar concerns. Wages and penalty rates didn't register as an issue.

If the business lobby was genuine about making life easier for small business, it would spend itstime criticising the excessive salaries of the Westfield chief executivess who paid themselves $28 million in 2013. Those excessive corporate salaries and predatory business practices by commercial landlords are causing far more impact than the penalty rates paid to low-paid workers. The "burden" rhetoric from the business lobby just doesn't add up. 

The truth is that eight in 10 Australians support penalty rates for working evenings, weekends and public holidays. Penalty rates are a part of the century-old social compact in Australia, and are an essential part of our collective values of a fair go. 

This Easter, ask yourselves why the least paid workers must give up penalty rates when that means they will either need to work even more hours to make up the pay, or just cop less take-home pay.

  • Alex White is the secretary of Unions ACT.
  • Edited address given to Australian Labour and Employment Relations Association ACT on April 1.