Finance Work Women to suffer the most from penalty rate cuts: economist

Women to suffer the most from penalty rate cuts: economist

penalty rates women
Female workers are in for a "double-barrelled" effect, economist warns. Photo: The New Daily
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Female workers will suffer the most from the Fair Work Commission’s decision to cut weekend penalty rates, according to new analysis.

Economist Dr Jim Stanford, director of The Australia Institute’s Centre for Future Work, used recent data published by Australia’s statistics bureau to conclude that 60 per cent of Sunday workers in retail, and 54 per cent in hospitality, are women.

Supporting this conclusion was the fact that women account for 55 per cent of all retail workers and 53 per cent of all food and beverage service workers, Dr Stanford found, using official statistics.

Women were also much more likely to be working part-time than men. Seventy per cent of women in food and beverage services, and 60 per cent in retail, worked part-time, compared to only 52 and 35 per cent, respectively, for men, the economist found.

“It’s a double-barrelled effect. Women are more likely to be employed in those low-wage sectors, and then even within those sectors they’re more likely to be in a part-time jobs,” Dr Stanford told The New Daily.

“Both of those factors contribute to the gap in earnings between men and women in the sector, and they confirm that the cut in penalty rates would have a focused impact on women’s earnings.”

The Australian Chamber of Commerce and Industry triggered outrage this week when it claimed on International Women’s Day that penalty rate cuts would in fact benefit women by lessening the problem of underemployment.

chamber commerce women twitter
Dr Stanford said this argument was “so far-fetched” because of the mathematics involved, and the fact that, as confirmed by the ABS, the retail industry had created zero net jobs in the past three years.

“For this to work out as a net benefit would require an extraordinary surge of job creation. If you think of it in retail, the Sunday wage is going to fall by a quarter — from 200 per cent of the base to 150 per cent. That’s $10 an hour or more of a wage cut,” he said.

“For that to translate into actual increased income, you would have to have an astounding 33 per cent increase in hours worked for it to be a net gain. Even then, I wouldn’t call it a net gain because you end up with the same income for more hours.”

The Fair Work Commission handed down a decision on February 23 to cut penalty rates for Sunday work in the retail, hospitality, fast food and pharmacy industries, where workers do not have an enterprise bargaining agreement (EBA).

The Fair Work Commission made a point of saying its decision would not affect workers in other industries.

“There is no case for common penalty rates across all industries. The Commission is not recommending a reduction in the Sunday penalty rates beyond [hospitality, entertainment, retail, restaurants and cafes],” the FWC ruled.

“Regulated penalty rates as currently constructed for essential services and many other industries are justifiable. The original justifications have not altered materially: they align with working arrangements that often involve rotating shifts across the whole week, are not likely to reduce service availability meaningfully, are commensurate with the skills of the employees, and are unlikely to lead to job losses.”

But law firm Maurice Blackburn has provided legal advice to the Australian Council of Trade Unions claiming the FWC’s decision “leaves the door wide open” to penalty rate cuts in other sectors that also work weekends and public holidays — including nurses, cleaners, construction workers and clerical workers.

The law firm’s advice hinges on the Commission’s finding, according to Maurice Blackburn, that “consumers now expect services to be available outside of ‘normal hours'”.

Any further cuts would likely be deeply unpopular.

An Essential poll released this week found 56 per cent of voters disapproved of the Commission’s decision, and 51 per cent said the government should legislate to protect penalty rates.

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