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The maligned reconfiguration of penalty rates was supposed to create more jobs and more hours for workers. A new study finds that not to be the case.
According to a new study, jobs in the retail and hospitality sectors have more than halved since the announcement of Sunday penalty rates in 2017.
This flies in the face of the reasoning behind the cuts being made in the first place, as the theory behind it would mean more jobs and more hours. The reverse is clearly true. July 1 may have the day when the Sunday rates cuts came into effect for retail, hospitality and fast-food workers, but the rot started far earlier, according to the Centre of Future Work’s chief economist.
Stanford discovered that Australia’s second-largest employer of citizens, the retail market grew by under 1% a year since May 2017. Similarly, the hospitality sector grew by 1.7% in the same timeline. This is important, as the rest of the job scene grew by almost 3% over the same years.
“Therefore, both compared with other industries and compared with previous periods of time, job creation in retail and hospitality under lower penalty rates has deteriorated…The conventional belief that simply cheapening labour and further exposing workers to lower and insecure wages will somehow elicit more job opportunities are not validated by empirical reality,” Dr Stanford said.
Despite the findings, supporters of the plan are asking for patience. Peter Strong, the chief executive of the Council of Small Business believes that anything retail employers gained from the cuts has been offset by an increase of wages in the same period. Between 2017-2019, wages have been increased by 3% a year.
Strong believes that the increased running costs are the salient reason why the figures are trending downward. “No new reason to open the business on a Sunday or to employ people,” Mr Strong said in conversation with The New Daily, “This would be a similar story for cafes and restaurants.”
James Pearson who is the Chief Executive Officer of the Australian Chamber of Commerce and Industry (Australia’s largest business advocacy network) commented back in May that it would “take time” to see a positive response in the job figures.
Unsure if the average retail employee has a “wait and see” approach, James.