Finance Work Penalty rates expose the plight of Australia’s underclass

Penalty rates expose the plight of Australia’s underclass

female worker
Female workers are still earning far less than men. Photo: Getty
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The Fair Work Commission’s slashing of penalty rates exposes the powerlessness of Australia’s underclass: its casualised workforce.

This growing group, especially vulnerable to poverty, is often forgotten in key economic debates, including the current one raging over weekend wages.

Ask any casual worker: it’s a precarious and powerless existence. Increasingly, many of us will find ourselves there.

Casual workers (defined as those without paid leave entitlements) now make up almost a quarter of the Australian workforce.

Temporary, part-time and self-employed workers account for one-third of all employment in OECD countries, according to a 2015 OECD report. This is a key factor in the rise in wealth inequality across many OECD countries including Australia, the report found.

Casual workers are vulnerable because they are concentrated in less skilled, lower paying industries that suffer from high unemployment. They lack income security if they fall ill, and face stigma from employers if they try for full-time work.

To make matters worse, they are concentrated in the same sectors where penalty rates will be cut: hospitality, retail and fast food.

Twenty-one per cent of Australian casuals work in the sales and labouring occupations. Another 19 per cent are employed in the retail, food services industry and accommodation sector, according to 2010 figures reported by The Australia Institute.

By comparison, only 11 per cent of professionals are employed in casual work. Labourers, who are less likely than any other occupational group to secure a full-time job, have casual rates of 48 per cent.

As someone who lives outside the city centre, I have many friends in casual work and know it locks them out of many of life’s possibilities. A home loan isn’t an option. Having children is frightening. They have little, if any, superannuation. None of them can afford health insurance.

penalty rates
Malcolm Turnbull says the government supports penalty rate cuts. Photo: AAP

For 10 years, these friends have been telling me their plans to earn more, including drastic re-training. Sadly, there are very few full-time jobs for them, and competition is fierce.

A survey by the ACTU in 1999 found 38 per cent of all casual employees preferred more work, 25 per cent believed they could not get enough work to support themselves and their families, and 59 per cent wanted permanent work.

Like the unemployed, the underemployed also suffer from the stigma that they don’t want to work.

New research from The University of Melbourne found Australian men with a history of casual work after the age of 35 earned 10 per cent less later in life, and suffer stunted career progression, compared to men in permanent employment.

While women don’t seem to suffer this stigma, they do make up 69.4 per cent of all part-time employees in Australia, according to the Workplace Gender Equality Agency. This is probably because, for many women with children, casual work is the only option.

Largely voiceless and unrecognised, these casual workers are left out of economic debates, which focus instead on welfare recipients, the middle-class and mega-rich corporations. Outside the social security safety net, this group of working poor receive little government assistance.

Because of all these pre-existing inequities, cutting penalty rates is especially cruel.

Penalty rates lift the wages of casual workers. They also symbolise fairness: compensation for someone’s sacrifice to keep a shop or café open for our convenience on a day they would rather spend with family and friends.

It’s common for people who work in the retail and hospitality sector to say they depend on penalty rates to get by. One wonders what will happen to them now. And who will care.

Linda Moon is a freelance writer and trained social worker and naturopath.

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