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Newsagents would hire more people in weekend penalty rates were abolished

Screen Shot 2015-01-18 at 7.52.36 pmA survey of 163 newsagents last week through this blog elected a result of 85.89% of respondents indicating that they would hire more staff if weekend penalty rates were eliminated. While the sample size is small, I am confident that a more comprehensive study would reveal a similar result.

Screen Shot 2015-01-18 at 7.55.52 pm83.33% of newsagents responding to the survey said they would work less hours themselves. I am surprised at this – I expected a lower percentage, maybe half the result. If this happened,if newsagents worked less, imagine the improvement in their quality of life and that of their families. What a terrific outcome!

Screen Shot 2015-01-18 at 7.57.24 pm144 of the respondents said they had discussed the topic with their employees. This is terrific. Of those who had discussed the topic with employees, 65.97% said their employees had indicated they would be happy to continue working for the business if weekend penalty rates were cut. This is a good number.

While this is an unscientific survey, it presents results that ought to encourage politicians to seek thorough research into the economic benefits and costs of the elimination of weekend penalty rates.  While I am no economist, my sense is that such a move would be positive for the economy.

I hope that people find the survey results interesting and useful in discussing the opportunity.

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  1. Adam

    Asking a group of employers (newsagents) if they could cut their out of pocket expenses and have more time off at the cost of their employees quality of life was always going to have these biased results.
    I’d be quite surprised if 144 respondents had a discussion with their employees on hypotheticals for an online poll.
    Your always encouraging us to think outside the box for new business opportunities but i think cost cutting at the expense of valued employees isn’t a way to keep increase your bottom line.

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  2. Mark Fletcher

    Adam I have more faith in newsagents that you appear to. $40 an hour for someone to work on a Sunday is ridiculous.

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  3. Dennis Robertson

    You are on the money Mark. Ridiculous indeed.

    Because of Penalty rates on weekends I have last weekend slightly increased my own hours and reduced casual hours.

    Wages bill cut by net 7%, effective immediately with more to come shortly.

    Person impacted was the one with a separate full-time job M-F. Remaining casuals dependent upon Newsagency work are not yet affected.

    Still an unpleasant task and the opposite of handing out Christmas bonuses. Put it off 6 months longer than what I perhaps should have.

    It is what it is.

    For most that I have hired over the years, there is nothing special about the weekends, it’s just another day. Changing times; seems like penalty rates are for yester-year and not really applicable to many of todays youth. Clearly having impacts in other areas eg: some hotels not opening on Australia day.

    Ah well to finish on some good news, our sales to Subagents are up (albeit modestly) 6 months on 6 months for the last 2 half years.

    Different story for HD numbers, which following migration are almost entirely within the control of News Corp.

    I appreciate the work and effort by yourself in putting this whole Newsagency Blog site together. Whilst sometimes the numbers of people adding to your wide variety of – ideas, surveys, tips, confrontational etc posts, is small, I think its the tip of the ice-berg when it comes to being reflective of what a lot of Newsagents feel.

    This site does inject a sense of unity and a learning that would otherwise be missing.

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  4. Jon

    Adam I have a lotto kiosk separate to my main shop. After trialling Sunday for a year I am now closing the kiosk due to penalty rates making it unviable. My staff offered to work for Saturday rates and I have had to tell them no the law does not allow that so they have lost $$$ the main shop is next in my sights as I’m fed up paying for 3 staff and not making money myself on Sundays.

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  5. Jarryd Moore

    Jon,

    The problem in that situation is a result of the lottery supplier having a monopoly on the market and you as a seller not being able to control the price of the product you’re selling.

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  6. Jarryd Moore

    Its hardly surprising that people indicate they would continue to work if penalty rates are cut. This is the very reason we set minimum conditions and wages in awards – because labor pricing, left to an unbridled free market, results in people accepting sub-standard remuneration, lowers the standard of living and increases the concentration of wealth.

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  7. Mark Fletcher

    Jarryd this post is not about deregulating labour pricing. No, it is specifically about weekend penalty rates where $40 an hour is no longer appropriate in a country where the reasons the penalty rate was struck no longer exist.

    10 likes

  8. Jarryd Moore

    Mark, the vast majority of the Australian workforce are not working on any one weekend. The services available, the trading patterns of retailers and the behaviour of consumers is noticeably different on weekends. We still structure much of our society around a 5/2 week. Penalty rates recognise compensate workers who are not able to enjoy the benefits of this structure.

    I’m yet to hear an argument that addresses the issue of what would happen were penalty rates removed. Low income earners would earn even less. Total wages would fall reducing disposable income and subsequently GDP. A wide spread removal of penalty rates could even induce deflation in an economy with low inflation.

    If the post is not about deregulating labor then why does it seek to find out if people would accept less than that which is determined by a regulator? Saying penalty rates are no longer appropriate because people will accept less is the core argument used by those pursing deregulated labour pricing.

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  9. Mark Fletcher

    Jarryd until there is professional thorough research we will never know. I think the 5/2 week is dead. My experience is that not one of the weekend employees I’ve ever had in 20 years of retail would fit into the low income earner category.

    My commentary on this is only about weekend penalty rates.

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  10. James

    Really Jarryd, removing penalty rates would reduce GDP, are you sure because I’m struggling with this.

    Removing penalty rates could reduce prices and that’s a bad thing apparently.

    If you’ve yet to hear an argument about what would happen if penalty rates were removed, you’ve missed the elephant in the room. The answer is more people would be employed lowering unemployment, making the employment pie bigger and guess what – increasing GDP.

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  11. rick

    My employees would earn more without penalty rates

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  12. Jarryd Moore

    James,

    If pricing is reduced because real incomes are falling then yes, that is a very bad thing.

    If you reduce penalty rates then yes, unemployment may be reduced. However the effect is likely to be very small – if regulated labour pricing and penalty rates had any significant effect on unemployment in Australia then we would have seen high unemployment for many years. The facts remain that we have one of the highest minimum wages in the world and relatively low unemployment.

    If you remove penalty rates then the total amount of wages paid is reduced – hence reducing the size of the pie. You may employ more people but the total amount paid out in wages is reduced, meaning you have a smaller pie shared amongst a larger group of employees. Whatever way you cut that’s going to result in a reduction in GDP.

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  13. Jarryd Moore

    rick,

    That may be true. But that is just ONE business. While your employees may earn more (as a result of you deciding to employ people during what would otherwise be a penalty rate period), many other employees in other businesses would earn less. There would not be an increase in wages paid from newly created hours of work at a rate big enough to overcome the decrease in wages paid from existing hours of work.

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  14. Dennis Robertson

    Paying $40.00+ per hour to unload Newspaper bundles from a truck on a Sunday morning is excessive when 24 hours later the rate is $28 per hour.

    So when I have to cut someone’s hours or indeed sack them because of excessive/unrealistic and outmoded weekend Penalty Rates, then something is clearly wrong with the arrangement.

    Just like technology and need to change with the times, or, some who now have austerity measures to contend with; all things that are unsustainable will come to an end unless there is change accepted.

    The snout in the trough approach by some Union’s to penalty rates was always short-sighted (admittedly, I’m using hindsight here)

    In addition, there is not much doubt a bias is in place in respect of Penalty Rates and who has to pay for it and who doesn’t.

    Why am I paying $40+ an hour when some other Distribution Newsagents abuse employee status by calling them sub-contractors and pay $23 per hour and make them use their own vehicle for a laughable cents per K figure.

    Why am I paying $40+ an hour on Sundays when 24 hour P&C’s are paying $22 or less an hour. I am constantly pestered by P&C staff trying to get a job with me. That has to tell you something.

    So when I listen to academic and to me somewhat nebulous points about GDP being impacted, I just laugh and wonder why I’m the mug punter in this game.

    And then I think about the bloke I had to let go because of unsustainable weekend penalty rates……………………….

    8 likes

  15. rick

    How many staff do you have working on a Sunday Jarryd?

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  16. Michael

    Dennis,
    It is impossible to be compliant with the law and only pay $23 per hour for subcontractors that is no different to any retail shop paying cash in hand.I am sure the person who engages subcontractors that way would not be compliant because unless it is done properly Fair Work would deem them as employees under the current legislation. When they get caught i am sure they will realise that if the only way to make money is by not paying correct wages then it is not worth being in business. Always having the worry if staff will going to fair work is no way to operate a business.

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  17. June

    I have been watching Gina Rinehart with great interest. She is already bringing in workers from overseas, ostensibly because she cannot find the skillsets here????
    It is, IMHO, simply bringing in workers who will work for less than our Australian workers.
    If the govt. continues to avoid our pleas over shopping hours and penalty rates we will also be in the position where we won’t be able to afford employees at all.
    I can see Australians being the people working for the least amount of money (cleaning etc) in the next 20 years because our education system is failing our kids (I have a great girl who has done a double degree and hasn’t got a job yet).
    We cannot have kids getting into debt at Uni and then not having a job/career opportunity.
    Unless we redress this issue we will become the new poor in our own country,
    working for immigrants who can pay their way in.
    Some of you won’t like me saying that but I think it is the truth.
    My own children would say “mum, that is a rascist comment” but I argue that it is just a truthful one.
    Other countries have never had the protected wage structure that we have here and it is totally unsustainable here in the Asian region and in the Asian Century.
    We need to understand this huge and dramatic change which is happening right under our eyes.
    Lowering wages will result in more employment ergo more taxes paid – more people buying houses which need fridges, washing machines, lounge suites, dining suites, kitchen utensils, bedding – need I go on????
    Our economy needs more immigrants, for the above to happen so don’t hit me with the rascism thing

    3 likes

  18. Stacey

    Yes June the media made an absolute mockery by completely twisting the words of Rinehart when she initially made that statement. The interview in full is very good.
    I believe Sunday penalty rates where implemented in 1919….kind of says it all. Seven day retail trading is accepted around the world as the norm so I do not believe Sunday is now considered an unsociable hour. My first job was as a cinema attendant never paid Sunday rates as falls under the Broadcasting and Recorded Entertainment Award. Sunday was a normal workday.
    As far as the removal of penalty rates resulting in a significantly lowered GDP well I strongly doubt that given the number of small businesses that currently don’t open or don’t employ staff on Sundays. If anything I believe it would potentially increase. I’d say Australia has far greater concerns in the mining industry regarding their GDP.

    1 likes

  19. david@anglevalenews

    Jarryd is correct, the rest of you don’t seem to be able to see beyond a few dollars more in your own wallets.

    Reducing wages may lead to more employment, although that is yet to be demonstrated. Some US states recently increased the minimum wage and saw an increase in employment.

    If reducing wages leads to more people employed, that is simply spreading the existing wages thinner.

    It will not lead to greater consumer spending. It will not lead to more people buying houses, furniture, etc (sorry June). It will lead to more people having less disposable income. Less disposable income leads to fewer sales on luxuries, such as magazines, gifts, etc.

    Lower wages will NOT lead to lower prices. Or will you sell Woman’s Day cheaper? No, lower wages simply remove purchasing power from the workers.

    But sure. Let’s go the American way and pay waiters $1.45 an hour because they get tips. Let’s provide “food Stamps”. Walmart, owned by one of America’s wealthiest families, refuses to pay its workers a decent wage, thus costing US Taxpayers $300 million in food stamps. Is this what we want – the taxpayer subsidising employers who are too cheap to pay a decent wage?

    Let’s stop trying to win the race to the bottom, and instead lead the way to the top.

    Instead of looking at low wage economies, let’s look at economies with high wages, more holidays, fewer working hours and robust economies. They ARE out there, no matter what cigar smoke Joe Hockey is blowing up your arse!

    This country is full of willing workers, let’s not fill it with slaves.

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  20. Jeff

    Analogies with America are useless, ignorant. The post is about weekend rates. $40 an hour is ridiculous and not justified.

    6 likes

  21. Peter B

    OK, a business takes 3 people to run on a weekend, 2 owners and an employee. The one employee gets $40 an hour including a big pie all to themselves.(greedy employee)
    Jarryd and Davids argument seems to be if you reduce rates and pay 2 employees at $20 an hour for the same period, you are still paying $40 an hour but the pie is then shared between 2 so one might still be hungry!(obviously the lazy one who needs a whipping to get moving)
    The ideal scenario is then that 3 people are employed, getting a total of $60 an hour.
    We could then have the day off, take the pie home and eat it ourselves, and let the employees do the work which they are paid to do without whinging who got more pie.
    We all win!! Hmmmm I like pie.

    1 likes

  22. rick

    So David you don’t work Sundays i take it, your staff do that.?. I don’t have a problem paying my staff a fair wage, or even overtime so long as that overtime kicks in after 38 Hrs regardless of what day it is. I don’t think this discussion is about cutting out penalty rates, more about when they apply.

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  23. Dennis Robertson

    Michael@post16.

    Yes, I agree with your views.

    I have been lead to believe that for the people who are prepared to abuse the status of employees and hire them as Sub-contractors, there is a loophole that, under certain conditions, allows them to get away it, thus reducing standard hour wage rates.

    Strictly speaking, I probably shouldn’t have mentioned it in the context of this post because that is about deliberately reducing peoples wages, rather than being to do with Weekend Penalty rates as this post clearly is.

    In doing so I might have confused the issue at hand for David@post19. I’m sure he didn’t mean to obfuscate the situation any more than I did.

    I doubt that most of the good people who have commented here have a desire to see their employees in a worse off situation regarding their standard weekly wage rates.

    I certainly don’t.

    To again add to a number of comments already, (Jeff@post20 makes it crystal clear) it’s all to do with the payment of unsustainable Weekend Penalty Rates, rather than the standard rate of pay for employees.

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  24. Dean S

    Is there any statistic that tells us how many small business owners work on Sundays and/or the weekend in general?

    I don’t believe decreasing penalty rates will mean “spreading the existing wages thinner”. I believe it will mean spreading the owners hours of work thinner.

    I have three young children that have never known me to be home from work on a Sunday. Saturday is our family day, usually spent at the local playing fields participating in Hockey, T-ball, football etc, depending on the season. Wouldn’t it be great to have the option to have two days at home with the family?

    In my business no one is employed on a Sunday, it’s just me. Reduce penalty rates and two people would be employed as Sunday’s are just a bit too busy for one person to handle – I come home exhausted. I’d be happy to pay two people a total of, say $56.00 per hour. However, $80 to $90 per hour would make the day unprofitable.

    I have uni students doing a casual shift or two a week and would love extra hours. If they worked on a Sunday at $28 per hour they would not be out of pocket as they are not currently earning $40 per hour.

    So I guess what I am saying is exactly what Rick (Post 11) took just one line to say.

    Jarryd – Rick’s is one business, mine is another and there will be many many many more businesses just like ours that would see our staff earn more with reduced penalty rates. Not to mention how much our family life would improve.

    6 likes

  25. Mark Fletcher

    Dean S – as the survey shows. It frustrates me that on this issue the hardliners on both sides immediately retreat to their corners and don’t leave. What I’d prefer is a conversation involving those sitting closer to the middle.

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  26. Eric

    Mark, might I suggest an additional question for the survey?
    “Have you spoken to your customers about the issue of penalty rates and how a reduction/abolition of same would affect them and their spending patterns?”
    I have and it is surprising, from the conversations I have had with regulars over the last few weeks, there wouldn’t be any point opening at all on weekends and public holidays, no one I spoke to would have any discretionary spending power. Their money would be going on essentials -mortgage/rent,power,food,school fees, debt reduction etc and things like daily coffees, newspapers,movies,getting the car detailed,eating out,going away for holidays etc are gone…not reduced,gone.
    So my thoughts on the issue are now bending- my customers are someone elses employees.

    2 likes

  27. Peter B

    Rick post 22. Good point. Logically penalty rates in this 24/7 lifestyle should kick in after 38 hour worked per week, no matter what day it is.
    Yes I can hear the arguments coming that the poor workers who did work on the weekend will then miss out, if we close on weekends they also miss out, ever the consumer.

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  28. Australian Family Tree Connections

    Peter B @27
    Logically penalty rates in this 24/7 lifestyle should kick in after 38 hour worked per week, no matter what day it is.

    Isn’t that called overtime?

    1 likes

  29. Peter B

    True AFTC for full time employees. We only pay casuals, so no overtime, but we pay higher weekend rates.

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  30. rick

    How about legislation that force retailers to lift all prices by 2.5 times on a Sunday to compensate retailers having to give up valuable family time to open they business. This is the same argument unions use to defend workers rights, let’s expand those rights over every business that operates outside mon-fri 8am to 5pm, surely that will give the GDP a massive boost if everyone is spending more than double or triple what they would normally spend on a weekend, or maybe people would not spend anything as they could not afford to, sound familiar?

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  31. Australian Family Tree Connections

    Peter B @ 28
    If the working week was deemed to be 38 hours over 7 days, there would be no penalty rates. Overtime would commence after 38 hours worked regardless of which days employee was rosted on.

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  32. Australian Family Tree Connections

    Not “rosted” – rostered.

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  33. Peter B

    AFTC, in this simplified “increase rates system” weather it be full time work or casual work, we could call it overtime, or penalty rates or whatever we want, it would just be an increased rate for those who exceed 38 hours.
    The rates for casual would be higher than full time because there is no leave loading.

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  34. Australian Family Tree Connections

    Aaah “leave loading”. What possible reason is there to retain Annual Leave Loading? It makes no sense to have to pay employees more to take a holiday than for doing their job.

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  35. Brendan

    My first job was with NAB and they paid on a 38 hour (or maybe 40 back then) with no overtime paid as a result for as sure as you worked ad extra 15-30 minutes one day, the next you left early and it balanced out. I also worked as a postie and they get meal allowances and overtime one day and took four hours to complete their round on those busy day but funny enough some of those same posties could do their round in an hour and a half if no mealies were on the table. No wonder our pay systems are such a basket case. 5 days work on any day required over each 7 day week with OT after 38 hours is fair on every one. Only shift workers should be on penalty rates and even then these rates could reasonably apply to any one who started or finished work between the hours of say between say 10pm and 6am.

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  36. James

    Can someone convince me that Friday night and Sunday trading are of any value to anyone bar the majors anyway who all have EBAs that mitigate off penalty rates. Im in a shopping centre and bar about 3 Sundays a year, the traffic just isnt there and its accompanied by penalty labour rates – its of minimal to no value.

    4 likes

  37. Jeff

    Stacy commented that the Broadcasting and Recorded Entertainment Award does not pay Sunday rates, the fact is that for Cinema workers under that award they are paid an additional 8% above the award rate every shift worked to compensate for this.

    Terrible deal that IMO should not be allowed however they are compensated for Sunday penalty rates.

    0 likes

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