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Penalty Rates And Basic Economics…

There used to be such a thing as slavery…

Well, actually there still is such a thing but – like all good civilised people – I tend to ignore something that isn’t actually happening in my country… Well, not legally.

Anyway, there were a number of ways that one might become a slave: Being made prisoner as a result of a war, being born a slave or when you or your parent got into too much debt and you were obliged to become a slave until it was all paid off.

At times I suspect that the only reason that the Liberal Party hasn’t tried to adopt the last one as policy (because of “Labor’s debt”) is the prospect that then employers would be obliged to pay for the board and keep of their slaves.

However, I can picture Eric Abetz – in between weekly press conferences to call for Tony Abbott to be restored to his rightful place in Cabinet – arguing that if we’d all just work for nothing then there’d be plenty of jobs for all. That it’s the cost of paying a wage that stop firms from working 24/7 providing plenty of work for everybody.

Some Keynesians may argue that – with nobody being paid – demand may slump to such a point that there’d be no need to have people working any more. But that overlooks the idea that work and production is good in itself. Like cleanliness, it’s next to godliness.

Or something like that.

While many Christians on the Liberal side of polics use the Bible to argue for all sorts of things, they mostly agree that God got it wrong when he wrote the Ten Commandments. That bit about making the Sabbath a day of rest didn’t allow for the sort of switched on world that we need if Australian cafes are going to be able to compete with China for the Sunday dining dollar. You see, unless we do something about penalty rates, most of us will pack up and go overseas every weekend, just so we can get a cheap meal.

I think that’s how the logic goes.

Of course, when I use the word logic when talking about Liberal philosophy, I am bordering on an oxymoron.

Ok, let’s look at the argument for reducing penalty rates. I’m going to take it out of the theoretic and use the shopping strip where I sometimes have my Sunday latte.

There are some seven cafes within walking distance of each other. All of them shut early on a Sunday. Two of them don’t open at all. Presuming that the reason this is the excessive penalty rates and not some strange desire that the owners have for time off, let alone time with their family, reducing penalty rates would enable them to open. And this would provide more jobs.

Or so the argument goes.

However, there’s only one cafe that has people lining up to get in. The rest are all relatively quiet. If the other two cafes were open, then there’d be less business for the ones that are open. Lower penalty rates would reduce costs but it’s also likely to lead to a reduction in turnover.

I mean there’s a limited number of lattes that we chardonnay socialists can drink. Has anyone done an analysis of whether the reduction in penalty rates would make up for the increased competition from all the businesses now able to open on a Sunday?

This is before one takes into account that – with more people working on a Sunday – there’s even less people out to eat and drink and shop because, well, some of them are now working.

Economics – it’s pretty simple. But not as simple as the Liberal Government!

 

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21 comments

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  1. townsvilleblog

    Wage slaves are usually poorly paid, and put pressure on to work unpaid overtime. Employees contributed $128 Billion in unpaid overtime this year just gone. Slavery, I would call it. These poor people are serving you at your supermarket or petrol station, or in your local shop, retail workers are the lowest paid and taken the most advantage of. Slavery was when an employer kept the slaves at his home, feed them in return for their work. This arrangement forces the employee to try to afford a home of their own or to rent and provide their own food on starvation wages. It may not be slavery in the technical sense, but yo me it’s pretty bloody close.

  2. Wally

    I saw Doyle (mayor of Melbourne) on TV last week comment that Melbourne would become a 24 hour shopping precinct, I thought what a great idea. Instead of sleeping when it is dark I could drive into the city and buy all the stuff I need without fighting the crowds. Then I realised that when I go shopping locally on a Monday morning I have most of the shops to myself anyhow. Maybe the shops and restaurants should stay closed between 9am and 5pm while we are at work and stay open for the rest of the day.

    It would save retail staff needing sick days to visit the doctor, see a solicitor or an accountant. All the under employed housewives could spend the day looking after the kids, cooking and cleaning then go to work when hubby walks in the door from work. Imagine how much money could be saved in child care rebates.

    We really need 24/7 trading, places that are open late have queues on their door steps. (NOT)

  3. Rossleigh

    I’ll support a reduction in penalty rates when politicians open their electorate offices seven days a week!

  4. Wally

    Rossleigh

    “I’ll support a reduction in penalty rates when politicians open their electorate offices seven days a week!”

    Along with all of the professionals who get over paid (beyond penalty rates) working normal business hours.

    Would be nice if politicians got paid by the hour for the work they do, when you cut out the time they waste talking bullshit each week tax payers would save squillions.

  5. Susan

    Bludgers. That’s the word that comes to mind when I hear that businesses want to increase their profits at the expense of our lowest paid workers. It also applies to people who want to shop/eat/drink coffee on a Sunday but are too tight to pay a surcharge.

  6. Wally

    Susan

    I agree, if you want to eat out or drink latte outside of traditional trading hours be prepared to pay for the privilege.

  7. Glenn K

    it has very little to do with cafes and everything to do with the likes of coles, woolies, bunnings, etc. i mean really, if the penalty rate you are paying a couple of servers in a cafe is the difference between a daily profit or loss, then you shouldnt be running a cafe. now, the 40 people Coles employs in one shop….. hey, lets make them work roster shifts 24/7 for 365 days a year for barely above minimum wage. let’s really screw up the lives of the working poor. after all, they’re nothing more than disposable work units. F*ck the LNP and the Business Council – pack of thieving feudal overloads

  8. Arthur Baker

    Should never have called them penalty rates in the first place – gives the LNP a target to whack. Should have called them compensation rates.

  9. diannaart

    If employers can make more money, then they can afford to pay a reasonable wage to employees….. no, that’s not how it goes, if employers make more money, they can pay employees a liveable income… no that never happens… employers can open more retail outlets for the exponentially increasing well paid population who don’t work on weekends…. no that’s doesn’t seem to be working either, if employers can make more money, they are free to do whatever they want…. good that we live in the free world where everyone can make choices – unless you’re a waitron of course – some people are freer than others after all.

  10. keerti

    things to note here. Coffee shops that open on weekends do so because that is when most of their business happens which means that employees are enabling proprietors to make their maximum profit. why should they be so mean as to deny their workers a reasonable share? Often on weekends and holidays these workers are flat out and don’t get a break. Secondly, on the question of wage slaves… that would be those on work for the dole.

  11. Wally

    Glenn K

    Supermarkets (100% certain) and I think all retailers were given a reduction in penalty rates when work (NO) choices was introduced.

    They pay the same rate Monday to Saturday between 7.30am and 10.30pm – not certain outside of these hours.
    Sunday they only pay time and a half.
    Public holidays they pay double time and a half – this is the only penalty rate that has remained unchanged.
    Staff must work 4 hours before they are entitled to a break.
    Staff provide (purchase) their own uniforms, even the top with the stores logo.

    By comparison union awards are:
    Overtime on any day more than 8 hours is worked.
    Overtime before 7am and after 5pm regardless of hours worked.
    Overtime on Saturday and Sunday.
    Double time and a half on public holidays.
    Overtime is at time and a half for the first 2 (or 3) hours and then it is double time.
    Sunday is double time all day.

    Straight off supermarkets are saving 33% out of normal hours and Saturday then 25% on Sunday.
    They also save 1o minutes tea break in every 2 hour work period.
    Slavery is not dead in Australia, we are served by slaves in supermarkets everyday.
    They even insist on staff signing contracts to work extra shifts on a temporary basis to save 20% loading.

    If you are only filling in what good is sick pay or holiday pay – casual loading should be paid.
    Of course a large percentage of workers affected by this are students who have no knowledge they are being ripped off.
    They also cannot say no or take the matter further for risk of losing the part time job they rely on the income from.

  12. Sen Nearly Ile

    you must be labor rossleigh and just follow the liberal line. Backpacker barrista’s will lose labor the penalty rates debate.
    Go visit Sunshine plaza colworths and see the sunday workers(sunday 9am-6pm). These are the people who will put millions into the chain stores pockets.
    Indeed look at the lowest paid workers in this lendlease complex and see the individuals who pay more tax on their sunday penalty rates than the lendlease company does for the whole year.
    Shame little billy shame torpid tanya shame labor.

  13. Geoff Andrews

    Senile,
    Huh?
    (Scratches head, re-reads for the sixth time trying various punctuation possibilities and missing capitals.)
    Conclusions: Rossleigh is Labor because he follows the Liberal line (gasp!).
    Sunday workers are being exploited by companies with big pockets.
    It’s all Labor’s fault. (Presumably because it’s following the
    Liberal line?)

  14. Sen Nearly Ile

    good line geoff ‘presumably’? Is his post following turnball’s mob down the latte trail’ and little billy’s mob follows turnball down the uni students and overseas visitor visa workers weekend work
    Rossleigh’s posts don’t suggest he is a turnball and therefore I guessed labor.
    yes. mea culpa, I don’t know what I meant the barista to own but labor sticks to the ABC but seems frightened to go on the commercial media, is frightened to go for colesworth and is frightened to go with the union bus driver, union nurse, what is rossleigh’s excuse?
    ps a bit of tense trouble??? if you or anyone went to the super market on sundays now these workers get penalty rates when turnball and little billy get together they won’t.

  15. win jeavons

    When will we see the politicians discuss the (far too numerous ) employers who offer jobs for $10 per hour, no worksafe protection, no sick leave or super deductions ? These are as corrupt as any union men ( who , I suspect merely copy their political leaders, with their gold-plated entitlements ). This apart from the unpaid hours to clean up, or do paper work after hours.

  16. xiaoecho

    Zero hour contracts are slavery aren’t they?? You sign a contract where you agree not to look for work with any other employer by are available at all times and at immediate notice. In return for this the entity you signed with (read: slavemaster) has no obligations towards you whatsoever. They are not obliged to feed or house you or provide you with any paid employment (zero hour contract) You are owned by the empoyer and can be sued if you try and feed and house yourself by looking for work. If I have got it wrong please let me know.

  17. CommonA

    I would agree the modern forms of slavery are only a little better than the previous ones… at least now we have the illusion of choice.

    As for why any day is special, I once asked someone why Sunday was special to them, and they said, it was “family day”… without the Biblical “day of rest”, in a secular society why should it be special at all? I mean Muslims might prefer Friday to be their day off (for prayers), Jewish and Seventh Day Adventists might prefer Saturday, and those who are into mythology might like Thor’s day (Thursday) for their respite.

    If people were given a choice of which days of the week or year were special to them, and on those days, they would need to be paid more to work, as the employer is wanting them to work more than they want to… then wouldn’t that make everyone happy? Why are we trying to shoe-horn everyone into your model of which days and times are preferable to work?

  18. Wayne Turner

    Work Choices 2 is what they Libs want – It’s in their DNA. Of course they won’t call it Work Choices. Everytime this rip off dodgy change is discussed Labor MUST label it,what it truly is: “Work Choices” – Labels matter.

    It’s class warfare Liberal party style. Exploit and steal from the lowest paid workers to give to the greedy selfish bosses.

  19. David Ho

    All this talk about doing away with overtime rates or lost revenue from corporations not paying taxes the real maths is lost. Also lost is what it really means: it is a transfer of wealth from the poor masses to the wealthy few.
    For example I read that there is over a million workers who earn overtime rates. For easy maths and the fact I don’t have the proper numbers, say a million workers are losing, say, 100 dollars a week from any proposed reduction in overtime rates, this amounts to a transfer of wealth of $100,000,000 each week from the many to the few (for one year this is a big transfer of wealth). This also represents a loss of taxpayer revenue and it must be assumed that the wealthy few won’t be paying the lost worker income tax as income/corporation tax. The overtime issue is always presented as the suffering of some poor coffee shop owner having to pay for labour on Sunday.

  20. neecelovespurple

    Your argument that lower penalty rates would lead to a reduction in turnover is incorrect. The cost of wages are a supply cost, and the sales (turnover) are demand related.

    I do see what you’re trying to say, but it’s simply not right.

    Demand will be unaffected by the cost of wages – as it is on any other day of the week.

  21. Wally

    CommonA

    We have established over many decades what society consider to be as you call it a “Special day”. We have welcomed people from other countries within our society, we have become multi cultural and we have to the best of our ability within what is deemed fair to change our society so everyone can coexist. Why should we change well established fundamentals that under pin our society?

    Do not forget that our predecessors fought hard to establish and win workers entitlements in the workplace.

    If accepting that we are all destined to become slaves to the capitalists is a requirement of becoming multi cultural it is no wonder so many aussies are so anti immigration. Putting forward arguments that people from different ethnic groups have different values than Australians so we must all change is acceptable on some levels BUT when you suggest that it can be used to eliminate penalty rates and/or reduce wages and conditions of workers you are waving a red flag in front of a bull.

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