End of the age of award entitlements

Issue 
Eric Abetz (left) said job losses are occurring 'because of penalty rates'.

In its written submission to the four-yearly review of the award system, the federal government has called on the Fair Work Commission to introduce comprehensive changes that will include cuts to minimum award rates of pay and conditions.

As major employer groups prepare to argue for cuts to penalty rates, the employment minister, Eric Abetz, has refused to rule out formal government intervention in support of their position. His ominous statement to the press alleged that “the anecdotal evidence is clear that there are a lot of job losses occurring in the retail and hospitality sectors because of penalty rates”.

If the government and employers are successful in their submissions, the age of award entitlements will soon be over.

Yet the rate of wage increases is actually falling. Last year they averaged just 2.7% compared to 3.6% in 2012 and 3.7% in 2011.

Last year’s figures are the first time the Wage Price Index has fallen below 3% since 1997 — the year the series was first published by the Australian Bureau of Statistics.

With inflation running at just over 3% for the last six months, and predicted by the Reserve Bank of Australia’s (RBA) forecast of February 7 to rise to 3.25% later this year, living standards are going backwards while unemployment is rising.

The RBA’s latest quarterly statement expects the official jobless rate to climb past 6% this year and keep rising next year. Little wonder that one in three Australian households fear for their job security, a rise of 5 percentage points over the last six months.

The official jobless rate is, of course, masked by an increase in underemployment as more and more Australians are limited to casual and part-time jobs. This trend is no more evident than in the tertiary education sector. Last year, casual employment rose 17.4% to 22,948 full-time-equivalent jobs, the largest increase since 2010.

As National Tertiary Education Union assistant secretary Matt McGowan said, student-staff ratios have doubled over a generation. Casuals now carry out more than half of all undergraduate teaching. Eight out of 10 researchers are employed on short-term contracts and seven out of 10 new positions are now casual.

As workers' wages contract in real terms, the share of national income going to profits has beenrising since the “Accord” years of the early 1990s when wages' share fell from 69% to 65.6% while profits correspondingly rose from 31% to 34.4%.

The wages' share has been on a downward spiral since. In 2012, it stood at 59.7%, the lowest level for 50 years, while the profit share was 40.3%. Abolishing penalty rates will widen this gap even further.

As for the inspired policy pursued by the previous Labor government of shifting 100,000 (mostly women) sole parents off the Parenting Payment and onto the Newstart Allowance, reducing their payments by between $60 and $160 a week, the benefits of Labor being “tough on welfare” are now clear for all to see.

A survey released last week found 67% of those affected reported their children had suffered social or emotional distress and 73% said their own mental health had declined.

Just under half said their child’s nutritional levels declined and two-thirds reported they were forced to skip meals. More than half were struggling to meet basic travel costs and rent, 75% were struggling to meet education costs, and 51% had incurred credit card or bank debts.

But where misery prevails there is always a quid to be made. A Melbourne-based company, Sherpa Systems, has developed a cloud-based integrated web platform, known as “The Hub”, which allows the 40% of the workforce who are casuals or contractors to access information on shift availability via mobile phone.

Its revenue has grown at a compound rate of more than 130% over the past three years. Nice work if you can get it.