Remember those massive cuts to penalty rates we copped three years ago? You know, the ones we were promised would boost the economy at the expense of the extra money in our individual pockets? Well, I hate to break it to you but it turns out those cuts did precisely fuck all to create jobs.
According to the Sydney Morning Herald, a recent analysis by the Labor party has found that there has been no significant increase in jobs in the retail and hospitality sectors since the cuts came into effect.
Basically, when the Fair Work Commission announced the cuts back in 2017, the idea was that employers would use the extra money saved from wages to higher more staff or increase hours, which sounded like a good thing. But there was no legislation put in place to actually hold employers to this, we just had to hope our bosses would chuck extra money into payroll rather than pocketing it.
To refresh your memory, penalty rates across the board were cut by 25-50%, with Sunday rates for retail workers dropping from 200% to 150% (aka from “double time” to “time and a half”), while public holiday rates in hospitality plummeted from 250% to 225%, according to FYA. Other changes included cuts to penalty rates for early morning or late night work, also known as the god-awful shifts we worked because that extra 10-15% was life-changing.
At the time, millions of young people who depended on these penalty rates to support themselves while studying (or just trying to live) were outraged by the cuts. The Australian Council of Trade Unions calculated that nearly half a million employees would lose up to $6,000 per year, which is a lot when you’re a broke millennial/Gen Z.
When the cuts came into effect, we were basically told that we had to make a bit of a personal sacrifice for the good of the entire Australian workforce and economy. It sucked, but if it resulted in more jobs for everyone, it was worth it.
But like many things that sound good in theory, the cuts didn’t actually go to plan, according to findings from the Labor party. By analysing data from the Australian Bureau of Statistics, Labor is now calling bullshit on the claims.
“Wages were cut for no economic benefit. And the government stood back and did absolutely nothing,” Labor innovation spokeswoman Clare O’Neil told SMH.
“While jobs and hours worked across the economy grew significantly over the relevant period, the number of jobs and hours affected by the penalty rate cuts actually fell or were flat.”
The numbers really speak for themselves here, with 732,000 sales assistants employed in Australia in May 2017 (prior to the cuts), but only 694,000 employed last November (just before the world *checks notes* turned to shit). So, not only did we not see the significant increase in jobs that we were assured, we’ve actually seen more than 30,000 jobs lost.
It’s important to note that the numbers crept back up to 710,000 prior to the mass unemployment caused by the coronavirus pandemic. But this number is still far below the number of Australians in jobs when we were getting those beloved penalty rates.
The decline was a little less obvious in other areas, with 700 jobs lost in fast food and 4,000 managerial staff members across hospitality and retail services. Those numbers may seem small, but when you’re talking about individual employees out of work, even 100 job losses can be devastating.
A separate analysis performed by Macquarie University also found that the penalty rate cuts didn’t lead to an increase in staff numbers on weekends or public holidays.
“For those already working Sundays or public holidays, [there was] no increase in their hours on those particular days. There were no increase in average hours worked [altogether],” Dr O’Brien said.
I know what you’re thinking, this all sounds pretty garbage. But thankfully, this dull, grey cloud has somewhat of a silver lining because the Labor party plans to use these findings to push for a “decent wage” for millions of people working in hospitality and retail services across the country post-COVID.
“Parts of the country are racked with under-employment, and insecure work is like a cancer, eating away at the dignity of Australians,” O’Neil said. “We can and should seek to do better by our workers on the other side of this crisis.”
It’s probably not worth getting your hopes up for reintroduced penalty rates just yet, but at least we’ve got some pretty solid statistics to back up the theory that penalty rate cuts didn’t help. We’ll be sure to update you with more information when the Labor party uses their findings to fight for decent wages.