After laying a decades-long siege to the labour fortress of Sunday penalty rates, employers have finally loosened a few bricks, allowing some to clamber over the wall.
The Fair Work Commission has partially validated their claims that exorbitant Sunday rates had been a handbrake on investment, jobs, growth, and on choice for consumers.
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Penalty rates: leaders allocate blame
Opposition Leader Bill Shorten and Minister for Employment Michaelia Cash trade barbs on who is responsible for the penalty rate change announced Thursday. (Vision courtesy ABC News 24)
The decision is a victory for capital's revised tactical demand for incremental reductions.
Even so, the micro-economic benefits remain contested, the individual effect of the cuts harsh, and the politics therefore, dangerous. How much? For Malcolm Turnbull, think WorkChoices-dangerous.
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Hospitality and retail outlets currently not trading seven days due to labour costs could well open on Sundays as a result of this decision. But let's say they do. How much of their new trade will come from other cafes and shops?Â
Even among new weekend consumers, some will have merely switched their purchasing from a weekday to a weekend.
For the workers currently employed on Sundays, however, this inherently "retrospective" decision could be severe. The ACTU predicts individual losses up to $6000 annually.
Lower-paid workers tend to spend everything they earn. Reduced spending power for these workers will come straight off demand in other businesses.
This is important. Flat wages growth is now a bigger drag on the economy than the cost of capital or even labour, making this a particularly inopportune moment for a pay cut.Â
As for a claimed jobs bonanza, those hardest-hit, will probably seek more hours to make up for their depleted incomes.
If the economic impacts are varied and obscure, not so the politics.
Labor immediately wheeled out workers purportedly from the sectors directly affected, with one claiming an immediate $109-a-week pay cut and another at $80 less. It was powerful retail campaigning, although doubts quickly emerged about the first of those claims, reminding us that truth will be an earlier casualty in this new war.
Turnbull has repeatedly pledged to ensure that Australia "remains a high-wage, first-world economy". Yet his government pointedly declined to make any submission to the Fair Work case despite the risk of a pay cut for the lowest paid.
That has made him own the result.
So, to his already difficult task of selling a company tax cut as good for employee pay packets, has been added an even tougher proposition: that lower pay for casuals will lead to higher living standards.
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