Analysis from The Australia Institute’s Centre for Future Work has shown that proposals for phasing in lower penalty rates for work on Sundays and holidays will not “protect” the workers affected by those cuts, and in some cases would make things worse.
Simulations of various proposals for deferring lower penalty rates, making offsetting adjustments in base wages, and/or “grandfathering” the wages of people already employed in the sector, suggest that none are capable of truly avoiding the resulting hardship.
At current rates of wage growth, it would take 17 years until higher base wages for retail workers fully offset the effect of lower penalty rates on nominal incomes. Ongoing inflation during those 17 years would reduce real purchasing power by 22 percent — almost equal to the reduction in Sunday pay proposed.
“The reduction in penalty rates for retail and hospitality workers will have a significant, negative impact on hundreds of thousands of employees, who are already among Australia’s most low-paid, insecure workers,” said Jim Stanford, Economist and Director of The Centre for Future Work.