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Low-paid work: Exploitation or Opportunity?

September 4, 2019

 

The other day I met my old friends Marcia and Ann for lunch at Babka in Brunswick Street. It was good to catch up again.

 

Babka is just a couple of blocks away from where Jack Irish’s mates reminisce about the Fitzroy Football Club. When Sasha Lewis and her partner Frieda sold Fitzsimons in Lonsdale Street in the late 80s, they paused briefly and then set up Babka.  Frieda has now retired, and Sasha runs it on her own. It has a cult following.

 

The menu has a Russian theme and the best bread in Melbourne is baked on the premises by Sasha’s son. There are no bookings and patrons wait in line for a table. Mostly people behave patiently, conversing amiably in the queue. Occasionally someone will give a Julie Bishop stare to diners they believe are staying overly long.

 

 

Loretta:               

How have you been?

 

Ann:                     

I have just finished the best novel I have read in years. A Gentleman in Moscow by Amor Towles.

 

Loretta:               

Yes. I loved it too. So well-written.

A lovely story about a life well-lived in what would seem to be an impossible setting.

 

Marcia:               

What is it all about?

 

Ann:                     

It begins in Moscow in 1922. Count Rostow is sentenced to be confined in the Metropol Hotel

for life for a student poem criticising the regime. It is the story of how he copes and how

he does it with wit and charm for the next thirty years. It is set in the background of the

Bolshevik revolution. Rostow learns to cope with life confined in the hotel whilst

a turbulent Russian history unfolds outside.

 

Marcia:               

It does not sound like my sort of book.

 

Loretta:               

What are you going to eat?

 

Ann:                     

I am going to have the Borscht with the multi-grain bread.

 

Marcia:               

How is your daughter getting on?

 

Ann:                     

Jane now has a job at McDonalds.

 

Loretta:               

I thought she was still at school.

 

Ann:                     

She is. She works after school and weekends.

 

Marcia:               

I have heard they exploit the kids.

 

Ann:                     

Not her. Jane is loving it. She is learning so much.

 

Marcia:               

The Siberian lamb dumplings in silver beet and soy sauce sounds interesting. I think I will have that.

                              

Doesn’t McDonalds fire the kids when they turn eighteen,

so they don’t have to pay them a living wage?

 

Ann:                     

I think that is true. There is quite a lot of churn. But by then they have learned

lots of work skills that they can apply elsewhere – not only in hospitality.

 

Loretta:               

The staff here are always pleasant and efficient.

 

Sasha walking by overhears this and joins in.

 

Sasha:                  

There is not a lot to it. You just have to teach them to be reliable

and to turn up on time – and to smile.

 

Loretta:               

I guess a lot of fifteen-year olds are not all that employable or reliable.

 

Sasha grins and walks on.

 

Loretta:               

I think I will have a pie. Their pies are always good. Are you going to have some wine?

 

Marcia:               

Yes. A glass of the Squitchy Lane Chardonnay.

 

Loretta:               

For me, a glass of the Ian Leamon Riesling.

 

Ann:      

I will have that too.

 

I am so grateful that McDonalds are giving Jane the opportunity and the chance

to earn some money of her own. It is all part of growing up and becoming a responsible adult.

 

Marcia:               

It is not the same at Seven-Eleven.

They employ foreign students, work them a forty-hour week and pay them for only twenty.

 

Ann:                     

Is that so? That is dreadful.

It is not right that foreign students should be exploited in that way.

 

Marcia:               

True. Moreover, under their student Visa restrictions, they are allowed to work only

twenty hours a week. They fear that if they complain they will have their Visa revoked

and will be sent home.

 

Ann:                     

If they are here to study how can they also work a forty-hour week?

I can’t imagine our kids doing that.

 

Loretta:               

It makes you wonder if they are really here to study at all.

Perhaps it is just a ruse to allow them to spend time experiencing Melbourne.

 

Marcia:               

The minimum wage is too low anyway, even when the employers are paying as they should.

 

Ann:                     

How much is it?

 

Loretta:               

It is nearly $20 per hour, about $780 per week.

 

Marcia:               

It is just too low for anyone to live on. It is time the government increased it.

 

Loretta:               

But what if the employer cannot afford to pay more?

 

Marcia:               

They can always afford to pay more.  You just have to put people ahead of profits.

 

Loretta:               

We know that if you put the price of anything up you sell less.

Why should wages be different?

Higher wages, fewer jobs.

 

Marcia:               

Well how do you expect people to live on wages that are below the poverty line?

 

Ann:                     

Jane is quite happy with the wage she gets at McDonalds.

 

Loretta:               

The problem is that if wages are set above their productive value then

jobs will disappear.

The consequence is that  the government will bear the burden of the

unemployment benefits created by their own policy.

 

Marcia:               

I don’t believe that raising minimum wages creates unemployment.

 

Loretta:               

Those most affected are the young. They are the least employable because they

do not have the job skills that come from work experience.

 

Ann:                     

That is why the McDonalds job is so useful for Jane.

It is the foot in the door, the chance to learn job skills that will lead to higher paid work.

 

Loretta:               

You are right. I saw a report the other day that 64% of low-paid workers transition to higher

paid work within two years. So most people are not stuck in low paid jobs forever. 

 

All around the world, youth unemployment is about twice the overall average. When the unemployment rate is 5%, youth unemployment is about 10%.

 

That reflects the fact that youth wages are being set above the value that unskilled kids can deliver.

 

Marcia:               

Oh. Where do you get those figures?

 

Loretta:               

Various places. It is just something I know. But if you wanted to verify them you could Google

them. One good source for economic facts is Max Roser’s “Our World in Data.”

 

Marcia:               

I am sure I could find other sources that contradict that. What authority does this Max Roser have?

 

Loretta:               

He is part of a collaborative effort with Oxford University.

But I guess I am not going to change your mind on this one.

 

Marcia:               

No. It is a matter of fairness.

Does Jane get penalty rates for out-of-hours and weekend work?

 

Ann:                     

I don’t think so.

 

Loretta:               

No. The Union did a deal with the major employers – Coles, Woolworths, McDonalds etc.

– that bundled all pay into one simple rate regardless of when you worked. It simplified

their payroll. In return it gave the Union a lot of extra members and the businesses

collect the union fees for them.

 

Marcia:               

That sounds like a good deal all around.

 

Loretta:               

Well it’s not such a good deal for the workers who only work nights and weekends.

And it’s not such a good deal for the local chicken shop who must pay higher wages

and cannot compete with the big chains. They tend to be left with family doing

the work and not employing outsiders at all. Or closing shop.

 

The Union’s interests are served by looking after their members. They are not interested

in the kids who work for Joe’s Fish and Chip shop and they are not interested in the

unemployed. Only in union members. If getting higher wages for their members means

fewer jobs for others that is not their concern.

 

Ann:                     

Isn’t there supposed to be a “no disadvantage” test.

No worker is supposed to be worse off because of a new agreement.

Perhaps the Fair Work Commission were asleep at the wheel.

 

Loretta:               

Or just did not care.

 

Ann:                     

I think there was a woman in Queensland who took legal action. I never heard

how that turned out. Perhaps the case is still queued in the court system.

 

Loretta:               

Or someone quietly paid her to go away.

 

Ann:                     

Loretta! You can be so cynical at times. As if that would happen!

 

 

For dessert, we all ordered the lemon tart with a large dollop of cream.

 

 

Loretta:               

I suppose at fifteen Jane is starting to show an interest in boys.

 

Ann:                     

It is the other way around. They are starting to show an interest in her!

 

Loretta:               

We had a serious discussion with Kate last week about sexual harassment.

Frank thinks the only practical solution is to deal with it forcefully and immediately.

He has been showing her how to deal with uninvited attention.

 

Ann:                     

Really?

 

Marcia:               

Tricky.

 

Loretta:               

Well it was the other day.

 

Kate was loudly shouting “Get your hands out of my knickers, you creep” and kneeing Frank in the groin, when my mother walked in!

 

[smiles and laughter all around]

 

There was Frank doubled up with his eyes watering and Kate with her arms around his shoulders, grinning and saying, “Is that how you meant?”

 

Ann:                     

Did you mother understand?

 

Loretta:               

Well she did after we explained what it was all about. But I think she was still a bit nonplussed.

Her generation don’t appreciate how much things have changed.

 

Ann:                     

I think Jane could learn from Frank too.

 

Loretta:               

I don’t think he is planning classes.

I don’t think he wants other people’s daughters kneeing him in the …

 

Ann:                     

Well that is understandable.

 

It has been great catching up. Time to go.

I am going to get a Casalinga to take home.

 

Loretta:               

I am going to get a loaf of the rye.

Frank loves it toasted with butter and vegemite under his scrambled eggs.

 

Marcia:               

That’s an acquired taste I do not intend to copy!

 

Ann:                     

Give him my love. I hope his eyes have stopped watering.

 

 

 

___________________________________________________________________________________________________

This is part of the series, The Lockesmith Dialogues, social commentary by Loretta Lockesmith talking with her husband Frank, her daughter Kate, and her friends Ann and Marcia.

 

Loretta Lockesmith is a Melbourne Writer.

 

 

For more on the impact of minimum wages on youth employment,   read this earlier blog.

 

 

 

 

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