Published on Mar 7, 2017

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With the February announcement of penalty rates being cut for hospitality, fast food, retail, registered club and pharmacy workers, there will be many businesses and workers impacted in the Cessnock region.

 

The announcement could well be a win for businesses who have long argued they could not open on a Sunday due to the high cost of wages.

 

Further benefits for businesses, and in particular small businesses, aside from the immediate cost savings may include:

  • Being able to employ more people on Sundays and Public Holidays
  • Increased opening hours and trading days
  • More Sunday activation of entertainment, retail, and hospitality centres and events
  • Enhanced windows for generating profit
  • Price reductions for goods and services – encouraging more spending

 

Aussie Workers might be doing it tough

We have to ask: how many employees would agree to cut their wages by up to $6,000 per year? It is estimated that nearly one million workers will be affected by the rate cuts.

To make things worse for workers, the latest statistics report the lowest wage price index increase on record, of only 1.9% for the year to December 2016 (ABS).

Low wage growth and reductions in penalty rates could have lasting effects on local spending and economic growth.

Unfortunately many of the awards affected, including hospitality, fast food and retail are amongst the lowest paid workers. The hit to penalty rates will affect those who can least afford it.

Sunday penalty rates have traditionally been reasoned by a ‘disutility’ or compensational element for missing family events, and not working traditional hours.

 

 

Benefit for unemployed or underemployed

The shift in penalty rates may open up job vacancies in these industries, creating new jobs.

There is also speculation that the changes could catalyse a shift away from workforce casualisation towards making more workers permanent. Unfortunately, it may also close doors for casual workers to earn Sunday and Public Holiday shifts.

Full time or part time workers with concrete working arrangements could have greater confidence in the marketplace, increasing the consumption effect through spending in the local economy.

 

What do you think?

  • Will this be a win for small businesses?
  • Will more businesses open on Sundays and Public Holidays?
  • Will the loss to workers be detrimental?