Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

Why such an over-reaction to the 3% wage increase?

Mark Fletcher
June 9th, 2014 · 6 Comments

The decision last week by the Fairwork Commission to lift the minimum wages by 3% is reasonable in my view. When considered against the annual 5% increase in rent and increases in many business costs, a 3% increase in the base cost of labour is not the bad news some are saying.

Sure no business owners wants costs to increase, especially in a business like a newsagency where a decent chunk of what you sell is sold at prices over which you have no control. However, 3% is within the band of what I’d expect a well run newsagency to be growing each year.

I don’t understand commentators, business group spokespeople and Treasurer Joe Hockey who say the 3% increase will cost jobs. Shopping centre landlords increase rent 5% a year, more than Fairwork increases, yet they don’t face the same attention. It feels like business looking after business and them ganging up on the weakest – the employees.

Good employees are valuable in any retail business. Quibbling over less than $20 a week is nuts since a good employee could easily make that much extra each week.

Our challenge as retailers has to be to partner with our employees to ensure we get the best value and can therefor pay them better value.

21 likes

Category: Newsagency management

6 responses so far ↓

  • 1 Ben // Jun 9, 2014 at 9:42 PM

    Mark 3% is not unreasonable, paying 100% loading on a Sunday and 150% on a public holiday is. Retail is a 7 day a week business, the same people that expect the convenience of 7 day a week shopping are also often the ones the oppose abolition of penalty rates.

    And YES great staff are key to our business and always will be, it is often what differentiates us from the ‘big boys’.

    2 likes

  • 2 Mark Fletcher // Jun 9, 2014 at 11:36 PM

    Ben, two very different issues. My post is about the minimum wage.

    0 likes

  • 3 Hamish // Jun 10, 2014 at 12:23 AM

    With you on this Mark, 3% is not unreasonable. I don’t even have a big problem with penalty rates Ben, what is wrong is the tilt on the playing field. All retailers regardless of size should be paying the same base rates of pay – this is not the case.
    Back to the post though… “I don’t understand commentators, business group spokespeople and Treasurer Joe Hockey who say the 3% increase will cost jobs”.
    Mark I think this says more about how ineffectual the people who represent small business are than how important employees are to business. They are not able to articulate or simply don’t grasp the real problem. Fairwork is a fantastic name but its not fair, and that is the problem. Everyone deserves a good days pay for a good days work, bizarrely an employee is more entitled to it in a small business. We can’t individually negotiate with employee representative groups like the big end do.
    A 16 year old for example should receive the same base rate of pay (including penalty rates when applicable) regardless of where or when they work. This is the real problem and I think the real challenge is to find a way of making these commentators, spokespeople and politicians talk about it.

    6 likes

  • 4 Gary // Jun 10, 2014 at 9:38 AM

    I certainly am not going to get a pay rise out of this. Seems odd. I take all the risk in my business and as a reward for providing employment I have to take a pay cut to finance a pay rise for my employees. Are my they suddenly becoming 3 % more productive?
    Have a look at page 9 of the FR today. I get the feeling that this pay rise issue in the retail sector is far from over.

    6 likes

  • 5 Leon Tonna // Jun 10, 2014 at 11:08 AM

    Fully agree with you Mark, this is not unreasonable. Hopefully any pay rises will mean more disposable income and result in more sales. Poor shoppers don’t spent

    1 likes

  • 6 Mark Fletcher // Jun 10, 2014 at 11:46 AM

    Leon you make an excellent point about disposable income and the circular nature of the economy.

    1 likes

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