Last week, when the Fair Work Commission handed down its decision to reduce Sunday penalty rates by up to 25%, the headline response from the ACTU (Ged Kearney) and the ALP (Mark Dreyfus) was that this would result in a loss of up to $6,000 per annum for affected workers.
This claim should not go unchallenged. Intuitively one can tell immediately that it is an exaggeration.
For a 25% reduction in Sunday pay to result in a $6,000 loss, the worker’s pay would need to have been reduced from $24,000 to $18,000. A person working 8 hour shifts, and working for 45 weeks of the year would work a total of 360 hours.
At the reduced pay of $18,000 this equates to $50 per hour. Workers affected by the FWC decision are not paid anywhere near this rate.
One would have expected that the journalists interviewing Kearney and Dreyfus would have challenged this assertion and not taken the $6,000 claim at face value.
The question that they failed to address is whether the reductions to penalty rates will be sufficient to generate new jobs in these low margin businesses.
Or are further reductions necessary if we wish to create job opportunities for the unemployed and the under-employed?