LABOUR RATES: COOKING A BIGGER PIE

In In My Opinion by Clyde Mooney

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Unlike many of the bureaucrats that make the rules, small business operators have typically known the life associated with entry-level positions in their establishments and aside from enjoying a better understanding of living on base wages actually empathise with many of the workers they are so often accused of exploiting.

This week’s breakthrough agreement between Business SA and the Shop Distributive and Allied Employees’ Association (SDA) heralds what could be a changing tide for the argument over penalty rates and employee conditions.

Smiling waitress serving hot coffee in the coffee shopWhile no-one would argue that young workers love the fact that they get generous multiples of their relevant award rate, the modern reality is that many of these workers would prefer any work – including on Saturdays and Sundays – than go without because the business cannot afford to open when paying such rates.

The establishment of minimum wages in Australia came about with the help of the Harvester judgement of 1907 in an effort to create minimum income support at a time when almost all employment was held by men and there was little in the way of social security and no income tax.

It would certainly be folly to suggest today’s sophisticated social support network and tax system is not a far more effective and flexible method of striving for societal equality, and yet the reality for many businesses, perhaps in hospitality more than any other, is that a century-old mandate is crushingly out of date.

Business website Smart Company makes the point that the moral dilemma when analysing the situation is that the losers – those that will make less per hour – are far more tangible than the potential winners, which it suggests are the unemployed who gain employment and options for consumers.

Flow-on benefits of these include experience gained by the newly employed, speeding their progression to higher-paid work, and lower prices and greater availability in products and services heavily relying on low skill and penalty rate labour. Such products and services tend to be subject to strong competition and cost reductions tend to be passed on to consumers, meaning the lower hourly rates benefit a broad spectrum of people.

Surely when so much of the world and Australian in particular is trumpeting a need for service and tourism-based assets to bolster the economy, a bigger sweeter pie must be better than the small sweet one.

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