Day to Day Politics: What is your labour worth?
Friday 24 February 2017.
1. I wonder how you would feel if having received a consistent salary over a period of time and your employer told you that next week he was going to cut it? Devastated would be my first reaction. After all the wage and conditions I received, were what I had negotiated. It was what I depended on each week. It was what I budgeted on, week to week.
It was the wage I got. What I expected.
With this decision there is no compensation that would see the lowest paid workers no worse off. They could have done so but I guess the commissioner, Ian Ross, who earns $8000 a week probably thinks that people who make coffee on a Sunday in a café are overpaid.
“Many of these employees earn just enough to cover weekly living expenses,” Fair Work Commission president Iain Ross said.
On the contrary, it seems to me that in deciding that Sunday was no longer special it became a reason to lower a cohort of people’s wages by saying it would create more jobs. I am yet to see the evidence for this. In any case I find that arguing that weekends are just like any other working day is a spurious one. To my mind everything still happens on a Sunday.
I am more inclined to the view this decision as the first step in a process to abolish the minimum wage and the Industrial Relations act? I can’t see it will lead to more jobs.
The Fair Work Commission have taken a long time to consider its decision and the issue has been complex however, the economy is experiencing a 75 year low growth in wages. Hundreds of thousands of Australia’s lowest paid workers will now get less for doing the same work.
Employment Minister Michaelia Cash said without the slightest concern for those taking a pay cut. The decision would help unemployed people find work. What, at the expense of low paid workers taking a pay cut.
“This will have a positive impact on many of the employers who will now be able to open on a Sunday and offer more employment, in particular to those who are unemployed or underemployed,”
Those taking the pay cuts may very well become the underemployed or indeed, the overworked.
This decision comes at an inopportune time.
And it comes at a time when the Government wants some good news. They cannot blame this independent decision on Labor. It’s another attack on the lowest paid workers. While this decision was made by an independent umpire it is a conservative government that has been campaigning for years to have them lowered.
To quote Brendan O’Conner.
For Malcolm Turnbull, supporting cuts to penalty rates is just his way of doing business. For Labor, supporting workers is personal.
These workers don’t deserve it.
I agree with Bill Shorten.
“I have never seen an argument which would justify wholesale pay cuts for the lowest paid workers in Australia.”
I reckon it’s only the start. They will chip away incrementally. Nurses next?
In the meantime the PM will receive a pay rise of $6740 in July. Inequality runs rampart.
2. The latest report by the Climate Council of Australia lays it on the line regarding the progress of Renewable Energy.
Under the headline ‘’State of Solar 2016: Globally and in Australia’’ it says that:
Solar power is surging in Australia and around the world, on the back of scaled-up production and continually falling costs.
Our new report finds that the solar rollout will continue to go gangbusters this year, with more than 20 industrial-scale installations set to go ahead across the country, and another 3700 megawatts in the pipeline.
I haven’t expanded on this but I recommend you read the piece to counter the propaganda of the conservative Turnbull Government.
My thought for the day.
”To what degree do we actually control the course our lives take?”
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Kyran
Return to home pageAnother nail in the governments coffin. The sooner the funeral happens the better.
Justice Ross explained, in handing down the decision of the FWC, that the reason that the lowest paid workers should get a pay cut is because evidence provided by the employers apparently supports the proposition that these pay cuts will increase Jobs and growth.
So – if cutting the wages of employees will increase jobs and growth then every employee should take a 13% cut, yes CEOs, Politicians, government appointes, board members and public servants.
Then the jobs n growth will realy ratchet up!
I left out the import fact that the Government did not make a submission to the commisssion.
Betty
I would like to see all the workers effected by these cuts resign from their positions and no one step forward to take their places. Where would the employers be then. This government has the poorest people in its sight and it only wants to make them poorer.
It seems that Tony Abbott is making his pitch to topple Turnbull : he believes in the resurrection so perhaps we can expect something over Easter.
At a book launch he has laid out the IPA strategies to create a fascist Australia under his leadership :
Abbott says: “In short, why not say to the people of Australia: we’ll cut the Renewable Energy Target, to help with your power bills; we’ll cut immigration to make housing more affordable; we’ll scrap the Human Rights Commission to stop official bullying; we’ll stop all new spending to end ripping off our grandkids; and we’ll reform the Senate to have government, not gridlock.”
Sounds more and more like the One Nation manifesto.
He probably already has most of the small business owner votes already but I wonder how many extra votes Turnbull expects to get by cutting the incomes of low-paid workers.
When it comes to cutting costs, business typically determines the price of their products by including the cost of raw materials, overheads and wages and wage costs should already worked out by including penalty rates.
If a hospitality business can’t make a profit on a weekend – likely their busiest time – perhaps they shouldn’t be open on those days.
If you can’t afford to pay three people at 200% now it makes no sense that you would now pay four people at 150% for the same cost so the excuse that this decision will lead to more employment is somewhat dodgey.
If the decision was fair, the Saturday rate would have been increased to be closer to a reduced Sunday rate but this is little more than an easy grab for increased profit and will ultimately result in a decline in business due to a reduction in the disposable income of their customers.
Some large companies argue that their employees are protected by Enterprise Agreements but when they expire, rates are likely to be reduced to “be in line with community expectations” so there is more pain yet to come.
This decision has set the political and social agenda for the rest of the electoral cycle and Abbott’s reappearance is just the icing on the cake.
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When it comes to cutting costs, business typically determines the price of their products by including the cost of raw materials, overheads and wages and wage costs should already worked out by including penalty rates.
Zathras. That’s it in a nutshell. Its the totality not just penalty rates.
The downward spiral of this country continues.All the reasons given for these cuts in penalty rates is NOT backed up by ANY PROOF? Where’s the PROOF?
It’s now lowering the spending power of some of the lowest paid workers in the country.Increasing the working poor.
It’s GREED of short sightened business unions.
This happening at the time we have record low in wages growth for workers.And in the increase of underemployment and unemployment.
Also the BIGGEST ENEMY of small business is NOT penalty rates,NOT workers pay and conditions in general,and NOT unions.THE biggest enemy of small business is BIG BUSINESS – Those small business supermarkets,hardware stores,stationery stores,….. Are going well,oh wait……. BIG BUSINESS can afford to pay hikes in rent,buy in bulk and sell products for less (even with biggest mark up %’s),and have access to governments (To change and/or maintain policies to their advantage.) that small businesses don’t.
The old Aussie dictum “fair crack of the whip” has been forgotten by our Liberal government: Mal and Michaelia like to flog the most vulnerable the hardest, not for crimes, but for wanting to work and earn a living…
before the last two elections those of us who were awake warned that electing a lieberal government would lead to the introduction of workchoices. The ill-informed preferred to listen to BS. Now we are reaping the result. Will australians continue to live in groundhog day….?
Another juicy morsel for the Labor Party to slap around the faces of the reactionary rabble, all sitting pretty on nicely padded, very cushy salaries. And then we have Tony Abbott whacking them over the head with more of his delusional nonsense. The WA State election is going to be interesting, very interesting.
It makes things very murky when wages, their growth, and yesterday their cuts, are talked about in percentages.
To a lot of people, who mostly don’t work weekends, %150 for Saturday, and %200 for Sunday looks like masses. Woohoo, they must be rolling in it. Put it into numbers though, and $15ish + $7.50 or $15 isnt quite so grand.
I did understand the cafe owner who said that it made the difference between him opening on Sunday and not, therefore giving his workers an extra shift. Life is tough at the bottom for the people who have to hire staff as well, like the cafe owners. Rent is one of the biggest killers, then electricity. THEN staffing. A mate of my son is a mechanic, and at the moment he works 12 hours a day, 7 days a week on his own just to make sure he has the factory rent and then his mortgage, and then his costs covered. He’ll get to wages soon.
The stupid thing is, if trumbles and moronscum and the rest of the muppets in the Canberra econolab had any kind of brain at all, a $50B business tax cut could work wonders. Just apply it to SMALL BUSINESSES, who employ fewer than say 20, including the owner, and restrict what it can be applied to. Rent, wages, new equipment, advertising etc. NOT the owners new pool.
That way, the lowest paid, who serve the bright and shiny their morning chai lattes, won’t be doing so while wondering how to pay for childcare because they have had to take the early shift as well, might still have a chance at their own house instead of renting, and might be able to get their ’97 dunnydore repaired properly, and on a more global scale let’s see what happens to Jobsen Groeth.
He might be a real boy after all.
Gangey – totally agree. Having ran a small retail business for 10 years, the main reasons I ended up selling it were…
1) decrease in consumer demand. Bad in the GFC, then equally awful starting two months before the 2014 budget. You scare people about the economy, they shut their wallets. Talking down the economy is a stupid, stupid thing to do. Says so much about this government and its previous leaders.
2) The cost of overheads. Despite the downturn, rent continued to increase (the bastards even tried to put up the rent by 18% in 2008). This attributed nearly 35% of my monthly cost. Banking charges (fees and interest) – another 15%. Insurance – about 10% (I kid you not!). Wages were about 35% too, but my employees did stuff actually that made the business money. Unlike the rent, the insurance, the bank fees, the staff were productive assets that generated income (though unfortunately not enough).
Small business in Australia is no longer a viable option, unless your cost base is tiny. If you have no office, no shop, no workshop, and all the associated costs (or unless you own yourself) then you will never make any money. Your role as a small business person is simply to keep all the other hangers on (the bankers, the accountants, the insurance brokers and most importantly the landlords, large or small) in the manner to which they are accustomed. The cost of employees is never the problem unless you are such a shit useless boss that you are unable to manage them properly. BTW – giving small business a reduction in company tax will have very little difference because most don’t make enough money to pay company tax anyway. If it was so wonderful, we should be seeing the benefits of the tax cut that started two years ago – have neither seen much evidence of that one worming its way through the economy, a fact that seems to have been conveniently ignored by the government that enacted it and the MSM who run their cover. The only small businesses that would have benefitted would have been accountants and lawyers, I suspect, who have high margins and relatively low costs.
Contrary to increasing employment – I reckon it will cut employment , and far from encouraging more businesses to open, more may close. Those working on Sundays will now have less to spend and earning less there will be less tax collected.
The stupid argument that we live in a 24/7 world makes me so angry ! Is Centrelink open on Sunday? You have to get in to Centrelink before 4.45 or they will tell you there’s no time left for you to join the queue as they shut at 5. Are banks ? Many are not even open Saturday. Government offices ? Not even going there.
If anyone who works Sunday could afford it it would be great if they all pulled out (not going to happen when you need the cash to pay rent and buy food). I want a list of businesses that will open now,a list of businesses that are putting on extra staff.
It is indeed the beginning of a targeted attack on minimum wages, and hard fought conditions.
How dare they sit in their ivory towers sipping champagne from crystal glasses telling the beggars in the street that they deserve less.
I am sick to my stomach.
John,
Christopher Pine this morning on Today, already blamed it on Bill Shorten. After all, he initiated the review in 2012.
if cutting the wages of employees will increase jobs and growth then every employee should take a 13% cut, yes CEOs, Politicians, government appointees, board members and public servants.
Then the jobs n growth will really ratchet up! Start with the politicians and those who sanction the cuts
Both Pyne and Cash tried to hang it on the ALP but strangely neither explained why the Government never bothered to make a submission.
They could have argued that a cut in wages could potentially result in a downturn in economic activity and affect us all.
I assume it’s only because they really wanted to see the rates cut and eventually take perverse credit in somehow helping small business.
Historically the biggest growth in our economy came after WW2 when incoming migrants aided in the creation of new infrastructure in particular. The main reason for that economic growth was because workers were paid penalty rates and spent that money locally. They didn’t hoard it or blow it on overseas trips. Cash moving through the bottom end of the economy is the reason we survived the GFC, not by forced austerity measures via wage cuts.
Zathras – totally. And this isn’t just anecdotal. I had a customer who was a builder. The school halls scheme stopped his business from closing down, and indeed through it was able to take on more staff. Plus the schools got a resource that most had wanted for some time. The only people who carped were the Liberals, and their five or six examples of school halls getting built when perhaps they shouldn’t have.
Like the pink batts, and the cash to all, it was a very timely intervention that stopped the economy collapsing. The Liberals would have done nothing and we would possibly still be in recession because of it.
Maybe there will be some relief in the transition period for these workers. Penalty rates would have been part salary package when the award was set. At he very least one would expect FWC to readjust the weekly rates so workers are not taking big wage cut.
Getting rid penalty rates is one thing. Cutting their wages another.
I wonder now are employers going to inform the landlord, insurance company, power and transport they need them to cut to grow their business?
” reckon it’s only the start. They will chip away incrementally. Nurses next?”
No nurses won’t be next. Nor will police, fireman and ambulance workers. They will be last on the list.
There are plenty low paid workers still in the system to attack. Welfare workers, carers, cleaners, transport, factory workers etc.
Turnbull meddled in trucking transport safety dispute and the CFA they created in Victoria, Refuses to take interest in workers wages being cut in changes to penalty rates.
I have seen no evidence that weekend penalty rate lead to these workers being highly or overpaid.
“I am more inclined to the view this decision as the first step in a process to abolish the minimum wage ……?”
“FWC is an independent body with the power and authority to regulate and enforce provisions relating to minimum wages and employment conditions, ……”
That’s from the FWC Wiki page. It seems to me there are two fundamentally different views of what the ‘independent umpire’ is intended to do. The first is that it is meant to define and protect minimum standards in terms of wages and conditions. Which suggests that, once a minimum is set, it becomes a permanent minimum standard. The second is that it is meant to review those standards regularly with a view to reassess the standard at which the minimum can be set.
It seems fair, therefore, to have a look at the ‘independent umpire’ and the standards to which the umpire is beholden.
In its previous incarnations, it was The Australian Industrial Relations Commission, then Fair work Australia, then the Fair Work Commission.
When it was FWA, back in 2002, the Howard government appointed Michael Lawler as a Commissioner. I’ll get back to that.
In 2009, Shorten morphed it into the Fair Work Commission. It is worth noting that all of the previous appointees were retained throughout the transition.
In 2013, Shorten made 8 appointments to the FWC, some of whom were alleged to be ‘overly sympathetic’ to workers and unions. Most of the commentary suggests it was, by and large, a balanced list of appointees, reflective of the needs of both employers and employees. In 2015, just before being dumped from his tenure, Abetz appointed 3 more people. Shortly after, Abetz’s replacement, Cash, appointed a further 4 people to the FWC. Reviews of these appointments suggest they were fairly partisan, none of which have been subject to any accusation of being ‘overly sympathetic’ to workers or unions.
Senior Deputy President Peter Richards departed his position in September, 2016 and Vice President Graeme Watson departed in January, 2017. Both of them left after delivering resignation letters that suggested, at best, the FWC was dysfunctional.
It also seems fair to look at the ramifications of this judgement which are profound, in many ways.
Notwithstanding that the government did not make a submission, the commission has accepted the submissions of some employers that ‘The Sabbath’ is no longer a religious practice of the majority of Australians and is therefore not worth undue consideration in terms of the compensation paid for it.
If that is the argument accepted for those predominantly in the hospitality and ‘unskilled’ areas, how can it not apply to everyone else? Does that mean that those areas contain more Christians than other areas of ‘weekend employee’s’ and less of them are practising?
Here was me thinking that weekend rates weren’t to compensate for religious beliefs but to compensate for the loss of your weekend. Whilst consumers may want a 24/7 economy, the fact remains that our workforce is still employed predominantly Monday to Friday. Religion, as a factor, has been on a downward trajectory since the 70’s and is being further impacted by different religions having different ‘Sabbath’s’.
We have a serious gender gap in terms of income. The majority of those employees who will be effected by this decision will be female. By any rational argument, that gap has been exacerbated.
We have a judgement based on a preposterous proposition that, by paying less in wages, we will create more jobs. Seriously? Any employer worth their salt will only employ people if there is demand. If your business model says you need one employee for every hundred customers, cutting the pay of your employee is not going to increase the number of your customers. The issue of discretionary disposable income, as raised by many commenters, would suggest the far greater likelihood that the number of customers will decrease.
These are just the issues that are blatantly obvious. It was a bad decision with no more benefit than advancing an ideology. The reality is what we will pay a hefty price for it.
As for the ‘independent umpire’, what standards do they have for themselves? Like it or not, they are political appointees. Does this mean they are beholden to those who appoint them? That Lawler bloke, on a salary of $400k, had unlimited sick leave. He could not be sacked, unless such action were approved by both Houses of Parliament. He could, of course, resign. Which he did. The day before a report was to be released as to his capacity and behaviour. Go figure! The president earns over $500k and has similar conditions. What would happen to the economy if those were the standards afforded all employee’s?
Thank you, Mr Lord, and commenters. Take care